By Manjeet Kripalani
In the just concluded battle over patent rights to AIDS and other drugs in Africa, one company, Cipla Ltd. of India, emerged as the hero of the developing world. It was Cipla that first offered a generic "cocktail" of anti-AIDS medicine to the international aid organization Doctors Without Borders for a paltry $350 a year--provided it handed out the drugs gratis.
Then Cipla told the South African government it could buy the drugs for $600 for sale to patients. Cipla's prices are a fraction of those charged by global drugmakers, which grudgingly slashed their own prices in response, then dropped a suit against the South African government, which wanted to import generic drugs from companies such as Cipla.
NO PROFIT. The irony is that Indian companies such as Cipla are offering their drugs more cheaply to Africans than to their own people. Is Cipla gouging customers at home? Not at all, says the Bombay company. Muku Hamied, its joint managing director, says Cipla would gladly offer the drugs as cheaply as it does in Africa. But first the government must end various levies that add more than 40% to drug prices. These extra charges make it impossible to sell drugs cheaply and still make a profit--which Cipla figures it has a right to do. It has offered the government the cocktail at $350. New Delhi is "considering" the matter.
What's to consider? India simply does not have the luxury of time. Already an estimated 4 million Indians are HIV positive, and the number is growing fast. Whereas South Africa's affected people make up one quarter of the population, in India, HIV-positive patients account for less than 1% of the total. Hence, they're easy to ignore.
As a result, AIDS education and government help is virtually nonexistent. Until 1995, India didn't even have a dedicated AIDS program. Then it set up the National AIDS Control Organization (NACO), with an annual budget of $38 million. That's a pittance compared with Brazil's $400 million initiative, and just 0.03% of India's health and family welfare budget. The World Bank has lent India $191 million to use for everything from AIDS education to treatment but won't disclose the details or outcome of its investment. Officials at NACO were not available for comment. Associates of NACO chief J.R.V. Prasada Rao say he's "very positive" about the program.
In fact, there is nothing to be remotely positive about. Only Indian drug companies such as Cipla and bulk drugmaker Aurobindo Pharma Ltd. are pushing for wider distribution of the treatments they provide so cheaply to the rest of the world. Subramaniam Hariharan, a marketing executive with Hyderabad-based Aurobindo Pharma, says its cocktail, at $890 a year, including taxes, is the cheapest in India. Analysts such as Giridhar Iyengar of ABN Amro in Bombay say that if the government provided sufficient incentives to private players, drugs could be made available at half that price.
But even at $450 a year, few Indians can afford the drugs--not with an average per capita income of $400. Anand Grover, a lawyer for the rights of AIDS patients, says the problem could be largely alleviated if the government, as in Brazil, began making the drugs through state-owned manufacturing and distribution companies. For his part, Grover is trying to organize AIDS victims into South Africa-style action groups to demonstrate against government inaction and inform people of the availability of AIDS drugs. The more India learns from South Africa, the better: A terrible plague is lurking in the country.
Bombay bureau chief Kripalani covers Indian finance and business.