Dr. Yusuf Hamied: How an Indian Entrepreneur Challenged Big Pharma to Offer AIDS Medications at $1 a Day
Dr. Yusuf Hamied of Cipla was an avid reader of medical journals, spending over $150,000 annually on subscriptions (equivalent to 1 crore rupees today).
In 1986, he encountered something entirely new to him. A colleague remarked, “The Tufts report indicates that AZT is the sole drug available for AIDS.” Hamied, puzzled, asked, “What is AIDS?
When Hamied posed his question, the disease had only just begun to emerge in most parts of India. However, it was rapidly intensifying in Bombay’s red-light district, which was close to Cipla’s headquarters. This area would soon become so severely affected that Bombay would gain the title “AIDS capital of India.”
In 1991, Rama Rao, the head of research at an Indian government laboratory, informed Hamied that he had developed a method to chemically synthesize AZT (azidothymidine) and sought Cipla’s assistance in its production.
It was the sole medication available to delay the onset of AIDS, produced exclusively by Burroughs Wellcome in the United States, and sold for approximately $8,000 per patient annually. Hamied agreed to produce the drug and introduced it in 1993 at less than a tenth of the global price, around $2 a day.
However, even this reduced cost was too high for most Indians to afford. “Our sales were zero,” Hamied recalled. He then requested the government to purchase and distribute the drug, but they declined, stating their funds were allocated only for detection and prevention, not treatment. Frustrated, Hamied ended up disposing of 200,000 capsules.
A few years later, Hamied discovered in a medical journal that a combination of three drugs, known as HAART (highly active anti-retroviral therapy), was effective in managing AIDS. These drugs—stavudine, lamivudine, and nevirapine—were produced by three different multinational pharmaceutical companies.
The total cost for a single patient’s treatment amounted to $12,000 per year. Hamied promptly took action to produce the drugs needed for the cocktail.
In 1997, Nelson Mandela led South Africa to amend its legislation, enabling the circumvention of pharmaceutical patents to facilitate the importation of affordable medicine.
This amendment triggered a strong response from major pharmaceutical companies. Concerned about potential repercussions, thirty-nine global pharmaceutical corporations, backed by the US government, filed a lawsuit against South Africa. They argued that the new health legislation violated the TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights), an international trade accord.
It became a dire global standoff. While pharmaceutical companies fought over intellectual property rights, 24 million people grew increasingly ill, facing a bleak future without access to the affordable medicine they urgently required.
As pharmaceutical companies battled over intellectual property rights, 24 million people’s health deteriorated Dr. Yusuf Hamied
On August 8, 2000, Hamied received a call from an American activist he didn’t know. The caller introduced himself as William F. Haddad, a former investigative journalist known for advocating the Hatch-Waxman Act, which kickstarted the US generic drug sector.
Haddad mentioned that he and his colleagues wanted to visit Hamied. These colleagues were a diverse group of activists united by a common goal: to make affordable AIDS medication accessible to those in dire need, independent of patent restrictions.
Four days after contacting Hamied, Bill Haddad, Jamie Love (an advocate for intellectual property reform), and three others, including a French doctor affiliated with Doctors Without Borders, arrived at Hamied’s stylish London duplex. He led them upstairs to a glass dining table where they posed their questions: how low could he reduce the cost of the AIDS cocktail, and what quantity could he produce? As they conversed, Hamied made calculations on paper, determining he could slash the price by more than fifty percent, down to approximately $800 per year.
Their discussions stretched into the night, and the group pledged their unwavering support to Hamied for the upcoming battles against multinational pharmaceutical companies.
Together, an Indian pharmaceutical company and international activists had formed a remarkable partnership, committed to disrupting the established global commercial and pharmaceutical hierarchy to save millions of lives.
Approximately a month later, in part due to their efforts, Hamied received an invitation to speak at the European Commission’s conference in Brussels focused on HIV/AIDS, malaria, tuberculosis, and poverty reduction. On September 28, 2000, he stood at the podium, addressing a gathering of reserved, skeptical Europeans, including health ministers, former prime ministers, and representatives of multinational pharmaceutical firms.
“Ladies and gentlemen,” he addressed the initially wary audience, “I am here to represent the needs and hopes of the developing world.” He then unveiled three proposals: offering the AIDS cocktail for $800 annually (reduced to $600 for bulk government purchases); providing the drug-making technology at no cost to any African government willing to manufacture its own medicines; and supplying nevirapine, which prevents mother-to-child HIV transmission, free of charge.
He concluded with a challenge: “We call upon the participants of this conference to act according to their conscience.”
However, his proposal received no takers. The global pharmaceutical market was constrained by patents and trade agreements, preventing many countries from accessing affordable medicine.
Yet, credibility remained another significant hurdle.
Indian generic drugs were often seen as inferior copies, a reputation that Hamied had worked hard to change over the years.
Realizing that waiting for governments to respond to his Brussels proposal wasn’t enough, Hamied contemplated his next move. Just then, William Haddad contacted him again with a crucial question: Could Cipla provide the AIDS cocktail for $1 a day? After some quick calculations, Hamied accepted the challenge. He decided to offer this price exclusively to Doctors Without Borders—a figure that had the potential to make a global impact.
On February 6, 2001, around midnight at a Mumbai dinner party, Hamied’s cell phone rang—it was Donald McNeil from the New York Times. “Dr. Hamied, is it true you offered $1 a day?” McNeil asked him.
Confirming this, Hamied was met with McNeil’s laughter: “Dr. Hamied, your life will change from tomorrow.” The next morning, McNeil’s story made front-page headlines in the Times.
As per the article, Cipla had proposed selling the AIDS cocktail for $350 annually per patient, equating to roughly $1 per day, a stark contrast to Western prices ranging from $10,000 to $15,000 annually. However, multinational drug makers with patents, supported by the Bush administration, were obstructing Cipla’s efforts.
The revelation of Big Pharma’s patent protection actions during a global health crisis, bolstered by U.S. government backing, ignited international outrage and sparked protests from Philadelphia to Pretoria, leading to accusations of genocide.
The fallout was a public relations disaster for Big Pharma. Even amidst the industry’s lowest points, their stance in South Africa appeared particularly egregious.
At a 2001 health care forum, GlaxoSmithKline’s CEO Jean-Pierre Garnier condemned Cipla and other Indian generics companies, stating, “They are pirates. That’s about what they are. They have never done a day of research in their lives.”
Some within Big Pharma accused Hamied of attempting to seize market share in Africa, to which he responded firmly, “I am accused of having an ulterior motive. Of course I have an ulterior motive: before I die, I want to do some good.”
Yet, it was the $1 a day price point that shifted Western perspectives—from “we cannot afford to assist” to “we cannot afford not to.”
Hamied and the activists emerged victorious. The subsequent month, multinational pharmaceutical companies declared their withdrawal from the lawsuit in South Africa and waived their patents, enabling generic fixed-dose combinations of the AIDS cocktail to be sold affordably across Africa.