Crusading Indian firm takes on might of Glaxo SmithKline: Cipla offers anti-HIV drugs at a fraction of rivals’ prices

Indira Gandhi decided 30 years ago that her country would go it alone, undercut the international drug giants, refuse to honour their patents and make its own cut-price versions of their medicines. Now India’s leading drug company, Cipla, is at the centre of the battle for cheap medicines elsewhere in the developing world, and it is taking on the British giant Glaxo SmithKline.

Cipla is offering a three-drug anti-HIV cocktail of stavudine, lamivudine and nevirapine for just $600 (£430) to governments and $350 to MŽdecins sans Frontires, the volunteer doctors who have set up AIDS clinics in sub-Saharan Africa. The drug cocktails sell for between $10,000 and $15,000 in the west.

The offer puts pressure on the five big producers of AIDS drugs, including Glaxo SmithKline, that have offered to discount their prices by up to 85% for African states.

Glaxo SmithKline has warned Cipla off from selling its cheap copy of Combivir – a combination of AZT and 3TC (lamivudine) – in Ghana and Uganda, saying it has patent rights in those countries. But Cipla’s offer, particularly to MSF, risks wrong-footing the drug giants.

Sir Richard Sykes, chairman of Glaxo SmithKline, says the generic companies are “pirates”. He claims the price of medicines is not the only reason why millions of people with HIV/AIDS are dying. The political will to spend money on medicines is sometimes lacking, and developing countries do not have the clinics and doctors that are vital to ensure that AIDS drugs are properly used, he says.

India exports vast quantities of cheap generic drugs to the Middle East, Latin America and Africa. Yet Cipla faces new patent legislation enforced under trade deals which threaten its export business. Dr Yusuf Hamied, Cipla’s chairman, says the bargain price he has now placed on the table is a response to the massive disaster that AIDS represents. Unlike last month’s Indian earthquake, AIDS is an “entirely predictable tragedy”, he says. “In this disaster there is room for everybody.”

Cipla can afford to undercut its western rivals because, in common with India’s 23,000 drug firms, it spends almost nothing on research and development. As soon as a new drug hits the market, Indian scientists break down its molecular structure, helped in their task by the internet, where pharmaceutical formulas are freely available.

Dr Hamied says without cheap generic drugs, millions of poor would have no access to medicines. “We have never been against patents. We have been against monopoly, because monopoly leads to higher prices,” he says.