From: jkp@cs.HUT.FI (Jyrki Kuoppala)
Subject: [soc.culture.usa et al] Drug Production
Reply-To: jkp@cs.HUT.FI (Jyrki Kuoppala)
Organization: Helsinki University of Technology, Finland
Date: Thu, 1 Oct 1992 23:41:06 GMT

A repost from soc.culture.usa,soc.culture.asian.american:

From: hassan@cup.portal.com (hassan monu alam)
Subject: Drug Production
Date: Wed, 30 Sep 92 15:18:57 PDT
Organization: The Portal System (TM)

India's Drug Challenge
An Indian firm is about to drastically undercut the cost of US-produced 
Aids drug AZT. But its coup may re-ignite a US-Indian dispute over 
copyright protection of pharmaceutical products.
-----------------
By Hamish McDonald in Bangalore
-----------------
Indian drug maker Cipla is about to spring a nasty surprise on US 
pharmaceutical firms Burroughs Wellcome, maker of the Aids-
treatment drug AZT. Cipla, based in the southern city of Bangalore, has 
perfected product of AZT and plans to launch its version on the Indian 
market in early November at a quarter of the price of Burroughs 
Welcome's imports.

Cipla's coup will not only undercut the US producer in a potentially 
huge market or Aids treatment, but also may give another twist to an 
US-India dispute over patent protection of pharmaceutical products.

Cipla has neither sought nor gained any clearance from Burroughs 
Wellcome to produce AZT and will be paying no royalty to it. Because 
Cipla produced the drug under a different process to that used by the 
US firm, its actions are entirely legal under Indian law, which 
copyrights processes rather than products. A government chemical 
laboratory even helped Cipla find out how to make AZT.

Burroughs Wellcome is the US subsidiary of the London-based 
Wellcome Foundation. If it is sufficiently outraged to complain to 
Washington, another painful chapter could be opened in US-Indian 
economic relations. New Delhi's lack of protection for drug and 
biotech farm products has become the single biggest irritant to it foreign 
trade partners, now that other elements of its old industrial-protection 
regime are being reformed.

The Welcome Foundation admits that AZT is not covered by patents in 
India. "The protection is so little that it's hardly worth applying for," 
says London spokesman Lousia Kelley. But she says the company 
would seek enforcement of its trademark rights without exceptions. 
Kelly says Welcome factors in the possibility of competition from 
generic brands before deciding to enter an unprotected market like 
India's.

Roger Brooks of the US Pharmaceutical Associations says Wellcome 
"in essence says that the product will not be of the same quality. They 
must be banking on selling a higher quality and more effective product 
and hoping that doctors will prescribe it."

AZT was developed as an anti-cancer drug by the US National Cancer 
Institute in Bethesda, Maryland, and licensed to Burroughs Wellcome. 
Clinical test found it to be effective in delaying the onset of Aids in 
people who have contracted the HIV virus and in improving their 
quality of life - though some patients suffer unpleasant side-effects. The 
cost of developing the drug is assumed to be high, though the US firm 
has kept it a closely guarded secret.

The drug, which is marketed under the name Rerovir, is expensive. In 
the US, a capsule containing 100 milligrams costs about US$2.75, and 
large doses are required. The cost of AZT treatment can amount to 
US$10,000 a year, throwing huge burden on health-insurance schemes 
in the US.

"Our price will be one fourth of what Burroughs Wellcome will charge 
in India," says Cipla director R. K. Bammi. The Indian firm plans to 
charge Rs. 15 (58 US cents ) for a capsule of 100 milligrams. Bammi's 
information is that Burroughs Wellcome will be charging Rs 55a 
capsule for its imported products. D. K. Bose, managing director of 
Burroughs Wellcome India, declined to comment "because our 
company does not make AZT in India."

AZT may end up as a drug available only to India's comparatively rich. 
Even at  Cipla's price, extended AZT treatment would cost Rs 4,500, 
(US$175), the equivalent of a month's income for a professional worker.

Indian health authorities are still debating whether to introduce AZT in 
to regular treatment for HIV patients. "This is partly because of its high 
cost, and partly because we are yet to be convinced of its efficacy, " 
says P. R. Das Gupta, project director of Health Ministry's National 
Aids Programme.

The World Health Organization and the Indian Health Ministry 
estimates that there are already 1 million people in India who are HIV 
positive, and that the epidemic is following the African pattern of 
infection through heterosexual contact.

The potential cost of wholesale treatment is prohibitive for a country 
that has to battle not just other serious diseases like malaria, kala azar 
and leprosy but also improve basic sanitary protection against 
respiratory infections and illnesses such as gastro-enteritis.

For Cipla, the challenge in launching AZT lay in devising a new 
method of processing a known product. Under the 1970 Indian Patents 
Act, no protection is afforded to original producers of health drugs and 
foodstuffs if substitute products are manufactured through different 
processes.

The Indian firms had no trouble tracking the development of AZT, the 
contraction for the key molecule (azidothymadine) in the drug. The US 
pioneers published details for the molecular structure of AZT and the 
method used to synthesise it. "If you give the chemist a final molecule, 
he know how to get there," says Bammi.

In theory, the discoverer of a drug can take out Indian patents on all 
conceivable processes. Some have attempted to do this, though not 
Burroughs Wellcome in this instance. "Your smartness is how to 
overcome that," Bammi says. "That is the game you have to play."

Three years ago, Cipla commissioned A. v. Rama Rao, a professor at 
the Institute of Chemical Technology in Hyderabad, to find a new 
process for making AZT. The institute is a government body under 
New Delhi's Council for Scientific and Industrial Research, which 
recently adopted a policy requiring its institute to find at least 35% of 
their funding form commercially sponsored work. A year ago, Rama 
Rao came up with a new AZT process, which Cipla has been adapting 
for commercial production.

Cipla's process starts with a chemical imported from Germany called 
beta-thymidine, which is the basis of several rugs. In five of six stages 
of synthesis, the process attaches a cluster of nitrogen atoms called 
azide (the "A" in AZT) to the bet-thymidine. This development allows 
Cipla to avoid replicating the Burroughs Wellcome process.

Cipla says its export prospects for AZT are limited. "We cant export to 
countries which have a patent on AZT," says Bammi. Cipla's brochure 
listing its drug products carries the rider: "Items covered by valid 
patents in any country are not offered or supplied to those countries. 
The patent position in the concerned countries should be verified by 
the customer."

The marketing of AZT is likely to make Cipla the focus of another US-
Indian exchange on intellectual property rights. Earlier this year, the 
US Government withdrew developing country preferences on imports 
of Indian drugs and chemicals, effectively slapping an extra US$3 
million customs duty on about US$60 million worth of imports.

With other developing countries, such as China and Thailand, recently 
tightening patent protection, India is becoming increasingly isolated on 
the issue. Its stance means it cannot yet sign the compromise draft for a 
new global trade system prepared by Gatt secretary-general Arthur 
Dunkel. This draft is a Dunkel initiative to try to bring the Uruguay 
Round of negotiations to a decision.

Cipla is no stranger to the US administration, nor is it a fly-by-night 
outfit. Bammi says his company carries a certificate of "good 
management practices" from the US Federal Drug Administration, 
which sends inspectors to its plants every two years. The agency keeps 
master-files on 13 products exported by the company, though none of 
these is covered by US patents.

Bammi, like many leaders of the Indian pharmaceutical industry, gained 
his doctorate from an American university. He is staunch defender of 
the Indian patent law. "Because o this policy, drug prices in Indian are 
the cheapest in the world," Bammi says. 

"Although the product patent does protect so-called intellectual 
property, they also give you a monopoly on the item, " he adds. 
"Pakistan has patent law similar to the Western model and its prices are 
much higher."

The patent law was enacted at the start of 1970s when the late prime 
minister Indira Gandhi embarked on a course of economic nationalism 
that prompted many foreign companies to quit India. Since late last 
year, however, the government of Prime Minster P. V. Narashima Rao 
has indicated that it is seeking to bring the law closer to the product-
patent model.

Indian pharmaceutical manufacturers are also divided. The Indian 
Drug Manufacturers Association lobbies strongly for the retention of 
the existing patent regime. But several local firms have joined with local 
subsidiaries of multinationals in the Organization of Pharmaceutical 
Producers of India, which pushes for adoption of product patents.

Parvinder Singh, the managing director of local member Ranbaxy 
Laboratories said in a recent newspaper interview that India did not 
have much choice: "The fact is that almost every country has fallen in 
line with the universal patent law. If India does not accept this, we will 
not be able to export to these countries."