Is The Cheaper Cancer Drug A Cash Cow?

By Shubhra Kukreti:

One of the largest generic pharmaceutical companies in the world, Cipla is known for introducing the world’s first 3- in-1 combination tablet Stavudine + Lamivudine + Nevirapine for the treatment of HIV infection. It revolutionized HIV/ AIDS treatment, thereby saving millions of lives. Not only this, many of India’s drugs first-to be manufactured-at-home are also accredited to Cipla.

cancer drugs

However, Cipla recently became the talk of the town for reasons not so positive. When it slashed the prices of three of its anti-cancer drugs by up to 63%, Bayer, a German pharmaceutical company, charged that Cipla had breached its patent rights by slashing the price of a generic version of its patented cancer drug. As a result, Delhi High court ordered Cipla to seek the High Court’s permission before market launch of the generic version of Bayer’s patented product. As part of the settlement, Cipla was asked to discontinue all use of the DA Double Advantage trademark (in the US and on a global basis). Unfortunately, the controversy does not cease here.

Since its inception in 1935, Cipla claims to be committed to the nation’s quest for self- sufficiency. And, it clearly has proof to support its tall standing claims. But, as they say, “Good work is never cheap and cheap work is never good” Cipla’s so-called philanthropic step too was received with raised eyebrows. The doubt is too obvious to be mentioned: Why would a company wish to cut down its profits?

People were sceptical and they made themselves vocal. “This isn’t about Cipla being ‘nice’. This is about Cipla trying to earn a buck, exactly like every other company in the world. It just so happens that in India, the way for a cancer drug company to earn a buck is to make their drugs cheaper, so more people can afford them.“, they said.

Yet, if we move back a little in history, we would know that India was once considered “the pharmacy of the world” as it pioneered in the production of less expensive copies of world’s bestselling drugs. Even today, as per the statistics of National Institutes of Health, India produces 92% of all AIDS drugs that are sold in the world. It was in 2005 that Indian Pharmaceutical Industry was forced to apply IPRs (Intellectual Property Rights) at par with TRIPS (Trade Related Aspects of intellectual Property Rights). Now, in order to make up for the losses, Indian companies had no other option but to become the “innovator”. The government started to spend more of its money on supporting R&D costs and supplementing the cost of drugs (universal healthcare) which lead to the profit of drug developing companies like Cipla.

Backed by the government policies and propelled by the need to maintain its self-created humanitarian image (well, its mission statement reads that the company should be judged not by profits alone but by its contribution to healthcare in society.), Cipla reduced the price of its cancer drugs. I believe it is to be underlined that Cipla products are approved by regulatory bodies such as FDA (Food and Drug Administration, USA), PIC(Pharmaceutical Inspection Convention, Germany) and WHO(World Health Organization). All in all, we may also take in consideration that by making low cost medication available throughout the world, this does show that Cipla sets the perfect example of corporate social responsibility.

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2 Responses

  1. Charumati Haran

    This is a rather difficult question to decide. On the one hand there are the poor people who deserve equal access to life saving medicines. On the other hand you have a firm which is making profits by expanding their business. Considering that lowering prices is a usual tactic in most other markets for commodities to gain business, even I think that Cipla should be allowed to do this. Even if they are motivated by profits rather than social responsibility, profit is a rational aim of firms. This may also pave the way for cheaper medicines for various other conditions.

    Reply
    • Shubhra

      Heyii..the response comes way too late, so apologies… Reaping profits is never a problem, however, can a business ever prosper if it compromises on the quality of its products? Sooner or later, the public would see through its tacts and stop buying its products. The issue becomes all the more serious when it concerns a life saving medicine. Here the business has to be analyzed through the ethical angle.

      Reply