Dr Yusuf K. Hamied is an Indian billionaire, philanthropist and chemist. He is the non-executive chairman of Cipla Limited, an Indian pharmaceutical company and is a crusader against monopoly in the pharmaceuticals business. He is best known for offering poor and developing countries the cocktail of AIDS medication for less than US$ 1 per person per day, whilst battling the western pharmaceutical companies who wanted to keep prices prohibitively high. In 2005, he was awarded the Padma Bhushan, India's third highest civilian honour. In this interview, he narrates his remarkable story, and shows that corporate profits and public welfare can, indeed, coexist.
“Public-funded research should be free and used for public welfare, instead of it being sold to drug companies who then make money on it”
Why should people study sciences? How can we encourage the new generation to choose to study and practise science? Do you think bringing children in contact with science in a playful way would help?
When I was a young child, I was told, “Everything around us is chemistry”. Science is everywhere and its omnipresence in our surroundings is fascinating and should be studied further.
Children should be brought in contact with science at an early age to encourage them to pursue it. Demonstrating scientific concepts to children with the help of examples from nature and the world that surrounds them can raise their curiosity and awareness. For instance, explaining why trees are green (chlorophyll) and how that is similar to why blood is red (haemoglobin) will probably capture their imagination. Not everyone may be receptive, but as long as a few are hooked, it is fine.
Creating this environment of science around a child definitely helps make them pick it up later. I was surrounded by science and that definitely impacted my choice of subject to study. To draw a parallel, my childhood friend is the noted music conductor, Zubin Mehta. He was introduced to music at an early age, since his father was a violinist and conductor.
What can we do to improve the understanding, excitement and appreciation for scientific research in society?
Children below the ages of 5-6 years are too young to grasp the importance and fascinating nature of science. However, focusing on making sciences interesting for children in the age group of 10-15 years in India, or 8-13 in Europe can have a significant impact on their appreciation and understanding of science.
What are your views on scientific research, and its importance?
Swami Vivekananda said, “Wisdom lies, not in the amount of knowledge acquired, but in the degree of its application”. Scientific research and development is meaningless if it is not aimed at doing something worthwhile. Conceptual research is typically done at the university and research institution level, and has the potential to make lives better, and further our understanding of the world. Me-too research is just incremental. It is the former which needs to be promoted.
In fact, last year I spoke at the United Nations and campaigned for public-funded research to be free and used for public welfare. Public-funded research should not be sold to drug companies who then make money on it.
What was your parental background and how did it result in you entering into science?
My father earned a PhD in chemistry at the Friedrich Wilhelm University (now the Humboldt University) in Berlin. He set up Cipla at the behest of M.K. Gandhi to make India self-reliant in producing medication. That is how I was exposed to science-it was all around me but I was never forced into it. I had an aptitude for it, enjoyed it and pursued it further.
The events which led me to study Chemistry are quite interesting. I studied at the Cathedral and John Connon School in Bombay, which only taught up to O- levels at the time. I finished school at the age of 16 and had reasonably good results in physics, chemistry and mathematics.
In March 1953, the Professor of chemistry at the University of Cambridge, Alexander Todd visited India. My father was the sheriff of Bombay at the time and hosted him as part of his official duties. My O-level results had just come out and my father took me to meet Professor Todd and showed him my grades, because I had done well, and was interested in science. He then asked Todd, “What are the minimum requirements to study at Cambridge?” Todd replied, “If we feel the boy is capable, we take him.” My father requested him to accept me, and Professor Todd responded by saying that I could join Christ’s College in October 1954!
Can you share some anecdotes from your student life at the University of Cambridge?
Honestly, the first two years were very very tough for me! It was extremely difficult to catch up from O-levels when the rest of the class had done A-levels. The saving grace was that all my fellow students had done two years of national service, and they had to revise everything. This gave me some time to catch up. Although I was aged 18, my colleagues were around 20. In the third year, I got a First Class Honours degree in Chemistry-Part II and Professor Todd invited me to conduct research for a doctoral degree under his supervision.
Who inspires you? Are there people that shaped the way you think and do/did you have a mentor?
My teacher, Lord Alexander Todd was a very big influence. He was knighted in 1954, was awarded the Nobel Prize in Chemistry in 1957 and was made a Lord in 1962. He was elected as a Fellow of the Royal Society in 1942, and served as its president from 1975-1980 and became a member of the Order of Merit in 1977.
He was the chief scientific advisor to the British government and dissuaded them from entering the space race, since he believed we had enough challenges to deal with on earth. I learnt a few simple, but valuable things from him.
He had a fantastic memory, and I am yet to meet anybody with a memory like his. I used to see him once in 6 months, since he was quite busy. He remembered what I had done the last time we met, and then used to recount it and ask what I had done subsequently!
One day, the Israeli government awarded Lord Todd with their highest scientific award. He accepted and decided to deliver his speech in Hebrew. He wrote it in English, and got one of his Israeli ex-students to translate it into Hebrew and then record it so that Todd could imitate the phonetics. He then delivered his acceptance speech at Tel Aviv in what appeared to be fluent Hebrew, but the problem arose when the press started asking him questions in Hebrew, and he replied that he didn’t know Hebrew!
He was also very humble. Even though he won the Nobel Prize, he used to cycle to the laboratory. One day he came up to my digs (place of residence) on his bicycle and said, “Yusuf, I know you are alone here. Come and have Christmas lunch with me and my family.”
There was also a limerick on him:
“Doesn’t it strike you as odd?
That a simple fellow like Todd
Should spell, if you please,
His name with two d’s
When one is sufficient for God.”
In retrospect, his ability to choose good people to work with him in his team was outstanding. Remember this in life, when you have positions of importance, surround yourself with intelligent people.
Why did you return to India immediately after finishing your PhD? Didn’t you want to work before you returned?
This is another interesting story. I finished my PhD just before the age of 24. After my doctorate, I asked Lord Todd if he could help find me a position to continue research, since I was quite young and not ready to go back home. He picked up the phone and called Adolf Butenandt at the Max Planck Institute of Biochemistry in Munich and set up a meeting. Professor Butenandt was the winner of the Nobel Prize in Chemistry in 1939 for his work on female sex hormones.
I went to Munich with the intention to work in Butenandt ‘s research group. When he took me around and showed me the laboratory bench space that I would occupy, he became very Germanic and said, “This lab opens at 8 am and I expect you here at 8 am sharp.” I was not used to starting so early. At Cambridge, we had a key to the lab and used to work till quite late in the night; if you are conducting a chemical reaction for six hours you need to see it through! I was quite young and hot-headed and asked him if I could do the same in his lab. He said that was not possible, since the lab closes at 6 pm and nobody was allowed inside after 6 pm. I was shocked, and said, “I cannot work here”, left Munich and went back to India.
Upon my return, I began working at Cipla. Since I didn’t have any experience in the pharmaceutical business at that point, I had to start from scratch.
What challenges did you face when you started? How did it get better?
I learnt some bitter lessons when I first joined industry. In 1960, we were following the British patent laws of 1911, and they were constrictive. 80% of the industry was controlled by multinational companies.
Back then, Cipla’s annual turnover was £60,000 with 750 employees. I worked for just £20 a month for the first three years, since the prevailing law mandated that the relative of the director of a company was to be paid a salary fixed by the government. Until the age of 60, I therefore literally had no money! I stuck it out like my father, who was a nationalist and life was quite different then than it is today.
In 1961, I felt the prevailing patent regime was too one-sided and would result in economic slavery. We formed the Indian Drugs Manufacturers Association (IDMA) to fight patent laws and we finally succeeded in 1972 when product patents were abolished.
Early on in my career, I realised the importance of manufacturing Active Pharmaceutical Ingredients (APIs) for becoming self-sufficient and we were the first company to start making them in 1961. Almost nobody in our team wanted to move to that site, but ultimately some volunteered and that is the reason we have become successful. When I tried to approach the western pharma companies to export my APIs, I was not allowed entry into any of their establishments! I started coming to the UK from 1961 to 1970 trying to get people to accept India as an exporter of pharmaceutical products. We got no allowance to stay as well. For years, my wife and I stayed at a bed and breakfast place for £1 per night.
Subsequent to India abolishing product patents, many multinational pharmaceutical companies left India. Glaxo remained, and in December 1972, I was sitting next to Sir Harry Jephcott of Glaxo at a pharmaceutical association gathering. He said to me, “Dr Hamied, so what if India has changed its patent laws? You mean to tell me you Indians can do anything?” Even at that time, the attitude of the western world towards India was dismissive. Dealing with the western pharma companies under these conditions was very difficult.
What do you consider to be personal failures, or where the system has failed?
In the early 60’s, Bombay’s population was two million and I thought it was too much. I taught myself how to make steroids and we were the first Indian company to produce oral contraceptives in the early 1970’s. I went to the Indian government and offered that production facility to them, since I didn’t have the necessary means to distribute them throughout the country. They turned me down. It was a huge personal disappointment.
Regrettably, in March 2005, India changed its patent laws again and brought back product patents. It was the saddest day of my life. Subsequently, I said on television, “India has committed genocide in healthcare, the effects of which will be seen after 2015.” II have also said that it is not a level playing field in healthcare and we need to catch up-scientifically and technically before we can compete with the world.
How have you managed to balance positive change to people’s lives with making money? Could this approach also be applied to multinational western pharmaceutical companies?
I am in healthcare. It is not just about running a business. Since we are saving lives, there has to be a humanitarian approach.
A large portion of Indian companies, especially pharmaceutical companies are promoter run. The people in charge have founded the company and have some empathy. There is a distinction between running a business and running an industry. Running a business means having no sentimental attachment to a company. I cannot do that and would never sell Cipla. It’s in my blood and I grew up in that atmosphere.
Almost none of the multinational pharmaceutical companies, save for Roche and Boehringer Ingelheim are family run. The rest are professionally managed, and are only profit-centric.
Recently, I tried to get Cipla professionally managed, but it did not work out. The people we hired were extremely bright, but they were ex-multinational where the culture and working habits are very different. Their attitude was not conducive to implementing projects for the growth of the company. The margins in multinational companies are far too high and they are accustomed to this. That is why this strategy didn’t work for us.
What have your experiences been regarding discovering new drugs and selling them in the western world?
Acceptance of new drugs from companies like ours is almost zero.
In my entire career, I have only developed three new drugs. One of them was developed in 1986 to treat blood disease and was quite effective. The challenge was getting Indian doctors to prescribe it! Even when I asked my medical practitioner friends why they did not adopt it, they said to me, “Dr. Hamied, if this medicine is as good as you say it is, how come Pfizer and GSK haven’t brought it out before you?” You cannot succeed by being the first company to develop a new drug, but you can succeed by delivering an established, older drug in a new format (i.e. a new drug delivery system, or converting a tablet into a syrup, spray or injection).
How does Cipla manage to be so cost-efficient? What is the strategy?
I succeeded on the basis of incremental innovation, which is my strength. I try to tweak known formulae to work better.
In the year 2000, I read a paper where it was mentioned that a cocktail of three drugs could be used to effectively manage HIV. Each drug was manufactured by a different company. In India, we had no patents and I made a single tablet with all three medicines, called Triomune.
What are the challenges for smaller pharmaceutical companies?
90% of the budget of pharmaceutical companies is devoted to molecular manipulation. There is a large deficit in the amount of conceptual research spending in developed countries versus the rest.
Last year, the United States government spent US$ 31 billion on pharmaceutical and medical research. The Indian government spent nothing. How can we compete?
In the past year, Pfizer spent US$ 8 billion on R&D. Cipla spent US$ 100 million. There is no competition. In the last 20 years, only 25 or so companies are responsible for developing new drugs. Barely any new pharmaceuticals have been developed in France, Russia, China or India.
Another challenge is the drug pricing strategy. Nowadays, pricing is simply based on whether a pharmaceutical company has a monopoly or not! A live example is the drug for hepatitis-C. The molecule is Sofosbuvir and is sold under the brand name Sovaldi by Gilead Sciences.
Gilead approached the insurers, and found out that the cost to treat one patient with hepatitis-C is US$ 168000. The insurers were thrilled when Gilead offered the medication at exactly half the price (i.e. US$ 84000 per patient)! What a coincidence. The price of the drug was just determined by previous market prices. Gilead also came to India to sell the drug. They gave the manufacturing license to 10 companies, including Cipla and we sell the treatment for US$ 250 there. So you can imagine how much the drug actually costs!
What have your interactions with the western pharmaceutical giants been like?
Previously, not particularly great, but now we are friendly with quite a few companies. Bayer and Cipla are currently engaged in a court battle with Bayer on their anti-cancer drug, called Nexavar. We found loopholes in their patent and produced our own version.
While Nexavar in India is being sold for about £3,400 per month by Bayer, we supply it for £80 per month. In 2014, the chairman of Bayer, Marijn Dekkers said (see link for full transcript), “We did not develop this product for the Indian market, let's be honest. I mean, you know, we developed this product for Western patients who can afford this product, quite honestly.”
How did you get into producing HIV/AIDS medication?
It was accidental. In 1991, a friend and associate, Dr. A.V. Rama Rao came to me saying he managed to synthesise azidothymidine (AZT: antiretroviral medication to treat HIV/AIDS) in the laboratory. He told me to start producing it. At the time, I had no idea what it was, or what AIDS in particular was. I read up on it and decided to take up its manufacture. We asked the government if they needed it. In 1993 we commercialised AZT. It was being sold in Europe for US$ 12 per patient per day and we sold it for US$ 2 per patient per day. Sales were negligible and we asked the government to buy it from us and distribute it. Their response was that they had money only to spend on detection and prevention, but not treatment. We had to destroy all the stocks we had and stopped manufacturing AZT.
In 1996/7, I read a medical journal article on the HAART trial, showing that a cocktail of three drugs can successfully control HIV. My interests were rekindled and we managed to synthesise all of them in our labs.
What prompted you to take on the western pharmaceutical giants when it came to AIDS medication (as chronicled in the 2013 documentary, “Fire in the Blood”)? What were the repercussions? Where you afraid at one point that the opponent is too big?
It all happened in this house. On 12th August, 2000, Bill Haddad, Jamie Love, Denis Broun, Robert Weizmann, David Langdon and myself worked out a strategy at my dining table. Greg Perry, the secretary of the European generic pharma association (Medicines for Europe) helped to get me an invitation to speak at the European Union on 28th September, 2000. GSK and Merck objected to my speaking. To this, the head of the EU at the time replied by saying that AIDS was a universal disease and I should be allowed to speak. I was initially allotted 20 minutes, but two days prior to my speech; I got a call saying I could only speak for three minutes and display just one slide.
I made three offers at Brussels with regards to the HIV/AIDS medication Cipla produced:
(a) We would provide the entire course of medication for the price of US$ 600 or 800 per patient per year against the prevailing price of US$ 12000-15000 for the same treatment.
(b) We would give any developing country the know-how to make AIDS medication for free.
(c) We would offer the medication to prevent the transmission of HIV from mother to child for free, world-wide.
There were no takers.
Did your life change after you revised your initial offer and agreed to supply AIDS medication for less than a dollar per person per day? Are you proud that you saved thousands of lives?
In December 2000, the health reporter from the New York Times, Donald McNeil, Jr. came to India to write an article on palliative care and interviewed me. He wrote a piece featuring me in the same month. In February 2001, he called me up when I was at a party, asking whether it was true that we offered Medecins Sans Frontieres the AIDS medication cocktail for the revised price of US$ 350 per patient per year. I said yes, and then answered a few follow-up questions. He laughed at the end of the call and said, “Dr. Hamied, your life will not be the same from tomorrow” and then on 7th February 2001, his article on our offer made front page headlines in the New York Times. Genuinely, since that day, my life has changed.
At that time, hardly 2000 people in Africa could afford AIDS medication. As of 2017, the number exceeds 17 million.
Do you think that African pharmaceutical companies will be able to produce all essential lifesaving medication required in Africa, with regards to technology and patent laws?
Cipla makes some of the AIDS medication in South Africa and Uganda.
The cost of pharmaceuticals is driven by the price of the active pharmaceutical ingredients. Importing the raw materials and solvents, investing in plants, quality control and so on would become quite expensive and increase the foreign exchange deficit of the country. As a result, they only wish to import the API into the country and make the tablets onsite, in Africa. The problem is that the companies who sell the API also sell the tablets and the economics do not work out.
We went to the Ugandan president and suggested that he imports the API from us, and we would do the tablet manufacturing in his country. Even though the costs would be higher, a majority would be in the local currency, and would narrow the trade deficit.
These countries do not currently have the structure, or the framework to compete otherwise, and we are happy to partner with them to bring medication to their people and contribute to their development.
What do you think is the next big thing/idea in science? And what is your vision for the future?
Though the traditional type of medication will continue, there will be a tremendous shift to molecular diagnostics in the next ten years. Very sophisticated new methods will be developed to predict diseases from blood, saliva and urine samples. DNA sequencing will help with early screening of diseases, such as Alzheimer’s, and this will enable people to design medication plans accordingly. Even telemedicine could take off in ten years, where you would wear a band on your wrist, which will help diagnose ailments.
Somebody once mentioned in a lecture, that it took six months for the news of Columbus’ discovery of America to reach Spain. When President Lincoln was assassinated, it took six weeks for the news to reach London and Paris. When the second plane sadly crashed into the twin towers of the World Trade Centre in New York City, we saw it live on television. Technology has progressed rapidly and has changed everybody’s life!
I am particularly concerned about India’s predicament. 800 million people still do not have access to sanitation. The population of Mumbai is set to exceed 40 million people by 2050. 500 million Indians live in abject darkness with no electricity. Water will be a big problem and the public services will not be able to cope with this demand.
More information on Dr Y.K. Hamied can be found here.