Last month, Western pharmaceutical giants’ worst nightmare became a reality when an Indian firm announced it would be slashing the cost of cancer drugs by 75%.Yusuf Hamied, the Lithuanian-born chairman of Cipla, announced his firm would drastically cut prices of his firm’s kidney, lung, and brain cancer medicines in an effort to make the drugs and their life-saving effects more accessible to the poor, AFP reports.
The cancer drugs, now around four times cheaper than the competition, were instantly hailed as a humanitarian move by Doctors Without Borders.
The law that allowed Hamied to lower his prices, compulsory licensing, was instantly under legal attack by drug giants including Bayer.
India’s patent laws make this all possible. Up until 2005, the only patentable part of drugs in India was the process, not the final product, allowing companies to “reverse-engineer” many drugs.
Seven years ago, India brought its laws into accordance with the World Trade organisation (WTO), allowing for 20 year patents and in effect, sharply increasing the prices of new drugs like the AIDS and cancer treatments.
However, there was a loophole. In certain cases, compulsory licensing allowed companies to produce a patented product or process without the patent holders consent (they still have to pay them though). Hamied is now using this loophole for cancer drugs, arguing it is for the benefit of the country.
By now, the mere mention of Hamied’s name probably causes chills down the spines of western drug companies —11 years ago he did a similar thing with his company’s life-saving AIDS prescription, offering it at 1/30th the price of his competitors.
His critics label him an intellectual property thief, but Hamied is adamant his policy is right. Speaking to Forbes last week, he said that India couldn’t afford monopoly prices charged by other companies. “Our mission statement says that the company should be judged not by profits alone but by its contribution to healthcare in society.”
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