Y.K.HAMIED OF CIPLA
Hamied’s anti-Aids drugs
strategy set new global standards, forcing major international pharmaceutical
companies to rethink their pricing position.Providing prescriptions for the world's problems defines Yusuf K Hamied. At an European Commission medical meeting in Brussels in 2001, Hamied shocked the world with his proposal to sell anti-AIDS drugs at 4% of the price charged by international companies. His reasoning was simple, "there is an epidemic on our hands, how can you justify selling something that costs $200 (Rs9,600) for $10,000 (Rs480,000)?"
He offered to sell his AIDS’ cocktail at $600 (Rs28,800) for government purchases and $350 (Rs16,800) for the Médecins sans Frontières group, a NGO focused on AIDS’ relief. The WTO happily granted cipla permission.The battle was won, but not the war. Hamied faced tremendous opposition from global heavyweights specially those in America who had the license to manufacture these drugs. A large number of legal suits were filed, but Hamied was quick to defend his view, "remember, most of the AIDS drugs were not originally invented by these companies - they are mostly in-license products," he insisted. The controversy has radically changed the entire world's attitude to drug pricing.
Moreover his three year battle for cheaper AIDS drugs for poorer nations has had a multiplier effect: Thailand and Brazil have begun manufacturing and selling the generic AIDS’ cocktail at low prices.
While the AIDS’ controversy is the humanitarian aspect of Hamied's global approach, the more strategic aspect is his drive to enhance exports, by increasing Cipla's overseas
marketing network, through brand acquisitions, co-marketing and contract manufacturing tie-ups with MNCs. The
strategy, however, is a low risk one, by entering into partnership arrangements with people who already are in the market. He is not planning to build infrastructure as Ranbaxy is doing: Hamied doesn't have a single employee outside India. Nor is he considering acquisition for the next five years.The strategy instead is growth through alliances.
Over the last couple of years he has entered into alliances with US generic manufacturer Watson to market eleven drugs that Cipla has in the pipeline. He has tied up with USA's Zenith Goldline and United Research Labs for marketing Flutamide (an oncology drug) and Felodipine (a cardiovascular drug) for the US and European markets. Another alliance is with the Andrx Corporation to market Omeprazole, which went off patent in 2001. These alliances have resulted in more than 50% growth in exports in 2000-2001.
management style
Critics like to describe Hamied as a "pushy drug dealer" or a "generic drugs maverick", yet Hamied is basically a scientist by nature. Apart from driving Cipla's international growth he is actively involved with his 200-people strong R&D division. In this respect he is very hands-on. His background as a scientist allows him to get closely involved with the investigation process. For example he began reverse-engineering AIDS drugs in 1992 because he realized the epidemic would hit India hard. "Lamivudine took four years of my life," he says.
But for Hamied, the key to success in the present environment is not basic research but technological innovation, which he attributes to his people and his scientists. Employees at Cipla are very well paid.Hamied's social consciousness plays an important role in his shrewd management style. Cipla keeps lowering the prices of its drugs "for social reasons" and runs television ads with public health messages.Hamied distributed Cipla's brand of Nevirapine free of charge for a two year period to the National AIDS Control Organization (NACO) in India to help prevent mother-to-child transmission of HIV. True to his roots he quotes a Jewish phrase that says, "If you can save one life, you've saved the world." But he also insists on core competency.Cipla has incorporated a unique, flat organization strucwork for them. Brother, MK Hamied, looks after marketing and his cousin Amar Lulla heads the finance division, while YK Hamied is responsible for Cipla's overall vision and strategy. Stories about Hamied the workaholic are legendary.
While accepting the Express Pharma Pulse Awards for Pharmaceutical Excellence he had this to say, "this award is dedicated to the national sector and also to the Cipla team and family that has stood by Cipla since our inception in 1935. No individual can take credit for everything, and this is true of any one of us, it is team effort and team spirit that counts. Success does not make a company or an individual great. What really matters is the contribution towards making life better for everyone."