FRED DE SAM LAZARO: If the Indian company Ranbaxy has its way, Caverta will be to India what Viagra, the blockbuster impotence drug, is to the rest of the world.
AD SPOKESMAN: There is light. There is hope.
FRED DE SAM LAZARO: In fact, Caverta is no different than Viagra. It is exactly the same compound, Sildinafil. Ranbaxy is one of three companies marketing it in India, each under its own brand name, all at a fraction of its price in the U.S., where patent holder Pfizer sells it exclusively.
FRED DE SAM LAZARO: So if I were to buy this under the Viagra label, it would be how much?
SPOKESMAN: That is each tablet is 400 rupees.
SPOKESPERSON: 400 rupees. Each.
FRED DE SAM LAZARO: And this is 10? So it's one... You can sell the Indian version of the Same compound for 1/40th of the price?
FRED DE SAM LAZARO: The reason Indian drug companies can sell Sildinafil and hundreds of other drugs so cheaply is that they reverse engineer or copy the newest medicines, many still under patent to multinational companies like MERCK and Pfizer, and they can do it legally. In 1970, the Indian government passed a law that it said would put the nation's interests ahead of profit to multinational corporations. It effectively derecognized patents on products related to nuclear power, food and pharmaceuticals. The law was intended to improve India's desperate public health situation. Life expectancy, for example, was barely 40 years. Physician Amit Sengupta is with a think tank called the Delhi Scientists Forum.
DR. AMIT SENGUPTA: If you go back in history, in the 1950s, the prices of drugs in India were one of the highest in the world. It's a reverse kind of a situation where you have probably the poorest country in the world having the highest prices of drugs.
FRED DE SAM LAZARO: The 1970 patent law transformed a country long dependent on costly imports, according to Davinder Brar, CEO of Ranbaxy.
DAVINDER BRAR: The real intention of the policymakers was to develop a world-class pharmaceutical industry which can cater to the needs of the country from its home base and not rely on imports. And that objective has been very largely met. In finished products, we meet almost 97%, 98%. But in terms of raw materials, we meet upwards of 90% of the requirements of our country, and also producing a surplus of over $1.5 billion annually for the national Exchequer.
FRED DE SAM LAZARO: It's money multinational pharmaceutical companies say is stolen from their own coffers. They say it costs $500 million to develop a single drug. Patents, which allow monopoly pricing for up to 20 years, provide the incentive. Alan Holmer is CEO of Pharma, a Washington-based industry trade group.
ALAN HOLMER: While we're all very concerned about access to medicines on an affordable basis, you can never have access to medicines unless those medicines are discovered in the first place. You cannot build a sustainable health care system on the basis of stolen ideas.
FRED DE SAM LAZARO: Holmer argues the lack of patent protection actually hurts India. The cheap knockoff drugs, he says, come with no guarantees.
ALAN HOLMER: There's a vast body of evidence that raises severe questions with respect to the quality and the effectiveness of the medicines that are being made available by the companies that steal the ideas of others and then try to make products on their own. The American pharmaceutical industry takes enormous pride in the quality of our products, and there is a very significant issue in India with respect to the quality of the products that are being produced by these companies.
FRED DE SAM LAZARO: Indian companies admit there are numerous fly-by- night operations. However, the major firms say their plants, like this one owned by the Bombay-based Cipla Company, are more than safe. Many, in fact, are inspected by the U.S. Food and Drug Administration, since Indian companies export billions of dollars each year in generic drugs to the American market. Cipla's co-director, Amar Lulla, says while many Indians-- particularly the rural poor-- don't have access to these drugs, India is still far better off today than when it depended on the multinationals.
AMAR LULLA: The consumption of drugs has gone up significantly since 1970s, you know, and the quality of life has improved, the life expectancy has gone up. The fact of the matter is that today the Indian consumer has access to medicines at one-tenth of the prices even those prevailing in across the border, say, in Pakistan.
FRED DE SAM LAZARO: Lulla says Cipla has numerous products designed to combat scourges in India, especially antibiotics against a range of infectious disease and anti-asthmatics. Perhaps most importantly, it is also producing drugs to combat AIDS in a country thought to be on the verge of the world's largest AIDS epidemic.
FRED DE SAM LAZARO: And these are essentially reversed-engineered from their original...
AMAR LULLA: Yes.
FRED DE SAM LAZARO: ...Product?
AMAR LULLA: Yes.
FRED DE SAM LAZARO: Give us a sense of how much you can produce this for, versus what they would cost on the market in the west.
AMAR LULLA: ( Sighs )
FRED DE SAM LAZARO: Approximately.
AMAR LULLA: Oh. One-fourteenth?
FRED DE SAM LAZARO: These antiretrovirals, the cocktail of drugs used by AIDS patients in the West, have long been too expensive in developing countries; a fact Lulla blames on patents.
AMAR LULLA: Today in Africa, I mean, millions are dying, and nobody cares a damn. I mean, the patents have to override the human suffering, you know? And I believe this exemplifies what patents do. What we're saying is that by all means the innovators should be rewarded. We're not against that. We say yes. But don't have monopoly.
FRED DE SAM LAZARO: Cipla recently offered its AIDS drugs to the charity Doctors without Borders for its cost: About $350 a year per patient. The move prompted at least one multinational, MERCK, to lower prices in some developing countries on two of its AIDS drugs. Still, in a recent NewsHour appearance, Pharma's Shannon Herzfeld called the Cipla move a PR gimmick.
SHANNON HERZFELD: I think it is a distraction. I think we need to realize that every day in India, 3,500 people became HIV positive. And the World Bank says by 2005, there will be 35 million people in India who are HIV positive. Cipla is not a research company. The cures that are going to come to those Indians are going to come from our industry.
FRED DE SAM LAZARO: Reporter: Some critics take issue with that claim and call many patents dubious. Dr. Sengupta says most patented drugs are based on years of earlier innovation.
DR. AMIT SENGUPTA: Even if you look at the United States, much of the research... In fact, the majority of the research is still public funded. And private corporations, entities, are building upon public-funded research. They're in a sense putting in the last block, or tightening the last screw.
FRED DE SAM LAZARO: He adds that India's rejection of product patents is not that unusual in a historical sense. Japan, for example, only signed on to the idea of patent protection in the 1970S.
SPOKESMAN: ...Making millions of Indians suffering silently from ED come alive again.
FRED DE SAM LAZARO: At the Same time, Dr. Sengupta rejects any idea that the Indian companies are somehow altruistic compared to the multinationals. India needs anti-tuberculosis anti-leprosy drugs, he says, not three brands of Viagra.
DR. AMIT SENGUPTA: They have been in this business to make profits, and there are innumerable instances where they've been producing drugs which we think are irrational, they've been producing drugs which are inessential, they have tried to jack up prices. We have always said that in terms of the issue of prices, multinational corporations and the Indian companies have not been very different.
FRED DE SAM LAZARO: The differences between Indian and multinationals firms will likely narrow after 2005. That's when India is pledged to enter the World Trade Organization, which will force it to restore patent protection. But India will still likely be a large exporter of drugs led by big firms like Cipla and Ranbaxy who say they owe their success to the years of protection from patent protection.