Indian Generic Drug Maker Targets Sad Americans

by H.S. Ayoub
BioHealth Investor



I read a very well written article penned recently by Nature staff reporter Erika Check for Wired Magazine.

Ms.Check profiles a popular nationalist in India by the name of Khwaja Abdul Hamied, a chemist who founded The Chemical, Industrial, & Pharmaceutical Laboratories, or CIPLA for short.

Cipla has become a very successful company in a developing region of the world through the production and marketing of generic drugs. Its success however is not entirely a direct effect of its legal business activities. Its current leader, Dr.Yusuf Hamied, the enthusiastically nationalistic son of the founder, is aggressively pirating patented formulations from big Western pharmas and selling them in developing countries whose patent protection laws do not match those of developed nations.

Well, 'pirating' is what big pharma labels Cipla's actions, but Dr.Hamied thinks otherwise. His savvy public outcries for cheaper medicine for the poor and his constant condemnation of the richer pharmaceuticals and their nations have garnered him a sort of cult following in India and surrounding poor nations.

Some of the drugs produced by Cipla include a version of Pfizer's (PFE) Viagra called Erecto, and a supply of oseltamivir which is the active ingredient of Roche's (ROG.L) Tamiflu.

Cipla is marketing to nations whose people constantly criticize the U.S. and other rich Western nations. More importantly, from a business perspective, developing markets are also gaining financial strength, especially those of India and Asian nations. Cipla has done well utilizing these trends in its promotional efforts.

But that was then, when India's patent laws were almost non-existent, and this is now, as India has recently changed its legislation. Cipla now is forced to develop and market generic drugs legally, and will do so in Western nations, including the U.S.

One of Cipla's first targets in the U.S. will be Pfizer's anti-depressant blockbuster Zoloft (sertraline). Cipla is already developing a large inventory of sertraline in one of its Indian manufacturing facilities.

But can Dr.Hamied have the same success playing by the rules? As mentioned before, Cipla strived on rallying the nationalistic fervor of poorer regions. It will be interesting to see how the company will do promoting its generics to Americans legally.

Already, Dr.Hamied has began his rally cries by criticizing the existing system in the U.S. for charging Americans too much for medication.

Could his initial U.S. target of depressed Americans be a well thought out strategy?

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