Cipla is an Indian multinational chaired by Yousuf Hamied,deals in generic drug manufacturing by

reverse engineering of expensive patented drugs.

In 2005 India changed the patent acts to make it TRIPS compliant. This was a threat to the company
as it would put a check on generic drug manufacturing. Cipla invested very little on R&D. Yousuf
Hamied feared that this change in patent act would scrutinize its business model and make the drugs
very expensive and as a result common people would not be able to afford it. This would also impact
the share prices of the company.

In developed countries the pharmaceutical companies invested heavily in initial R&D, as a result of
this the cost of drugs was very high and beyond the reach and affordability of common people.

Developing countries lacked stringent laws of patent, were against the profit making aspect of
pharma companies and believed that low cost and affordable medication should reach all masses.

Pharma companies were extremely profit oriented.

Neo colonialism patent laws are made by western countries and their main aim is to exploit the
people. 20 years

You can’t sell

Problem Statement:
Mr. Yusuf Hamied is thinking about the ways to sustain the business of Cipla in the wake of
signing of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
The signing of TRIPS has created a possibility of Cipla’s product line unsalable.

Criteria for Decision making:

1. Company should maintain its revenue for survival.
2. Low cost and affordable medication should reach all masses in developing countries

Generate alternatives:
1. Convince all stakeholders involved to not include drugs and food patents while
implementing TRIPS considering India’s situation
2. Business transformation in the next 2 years, in order to sustain business by
maintaining the revenue
3. Emphasis on R&D to avoid patent problems in future

Evaluate Alternatives:
1. India might not be a least developed country but considering her large population and
unequal distribution of income among population groups, affordability of medicine to
lower income groups should be given priority. Even after incurring huge R&D cost,
pharmaceutical industry in developed countries is the most profitable among all
industries. They also do huge expenditure on advertising. Patent laws are designed by
these developed countries. And these companies manipulate them to exploit third
 world countries. It is a kind of neo-colonialism. Any kind of profit making should not
be based on exploitation of humanity. Thus convincing UN as a representator of third
world countries is very empirical step. Executive order produced by UN can be used
to easily convince other stake holders.
2. Focus on growing areas where patent laws would not effect – exploring off patent
pharmaceuticals. Patent for some drugs Zofran, Diflucan, Prilosc, Cipro,Norvasc and
AZT were scheduled to expire between 2003 and 2007. 2 years is enough time to
change product line of company from drugs, tablets and capsules to liquids, creams,
inhalation devices, injections and others. In this way he can manage to maintain
revenue by not worrying about patent laws.

3. The foundation of the business of Cipla is based on "generic drugs" , but with
globalisation and integration of world economy , WTO protocols like TRIPS, GATT
etc are inevitable and there is no escaping from it . "Protectionism" is bound to falter,
so Cipla should start aligning itself towards Research and Development based drug
discovery and continue with "generic drugs" business wherever the law permits, but it
needs to be toned down.

Contingency Plan:
If WTO is not willing negotiate and understand the problem, leave WTO.

environment.How to convince the government that food and pharmaceuticals should be

exempted from patent laws.