Cipla: Capturing the Global AIDS Drugs Market

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Case Details:

Case Code : MKTA009
Case Length : 14 Pages
Period : 2003-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Cipla
Industry : Pharmaceuticals
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction

In 2003, Cipla was one of India's top five pharmaceutical manufacturers, the others being Wockhardt, Ranbaxy, Dr. Reddy's and Nicholas Piramal. Cipla recorded sales of Rs. 15,990.04 million and a net income of Rs 2477.44 million. Over the years, the company had developed strong research and marketing capabilities. Cipla had enjoyed an average annual growth rate of 30.3% from 1999 through 2002, at a time when multinational pharmaceutical companies had grown at only 1%. Although Cipla's primary market was India, the company sold its products worldwide. Cipla's line of more than 400 drugs, included anti-asthmatic, anti-cancer, anti-inflammatory, anti-depressant and anti-AIDS medications.

Tablets and capsules accounted for 53% of fiscal 2002 gross revenues; bulk drugs (also known as Active Pharmaceutical Ingredients or APIs), 24%; aerosols and inhalation devices, 10%; injections and sterile solutions, 6%; liquids, 5%; and creams, 2%.

The company had 21 sales offices and five manufacturing plants in India, three of which had been approved by the U.S. Food and Drug administration (FDA) as well as the World Health Organization (WHO).

Cipla was also well known for its philanthropic initiatives largely shaped by the strong willed personality of its founder, Khwaja Abdul Hamied.

The subsequent generations of the Hamied family had upheld this tradition. Cipla's Chest Research Foundation was dedicated to research in asthma, Chronic obstructive pulmonary disease (COPD), allergic airways diseases and other respiratory ailments. The Foundation conducted clinical research, bioequivalence studies and CME (continuing medical education) programmes for the medical profession. The Cipla Foundation's Palliative Care Centre for cancer patients in Pune provided comfort and solace to over 2800 terminally ill patients.

The company also supported the promotion of education, sports and community welfare, both directly and through its charitable trusts. In recent times, Cipla had attracted considerable media attention because of its efforts to offer AIDS drugs at very low prices. The company had conducted workshops and symposia in India, Sri Lanka and various countries in Africa to spread awareness about the disease and its treatment.

Antiretroviral drugs prevented the onset of full-blown AIDS in people infected with HIV and made such infections manageable. For want of such drugs, three million people died in 2003. But in its quest to market AIDS drugs globally, Cipla realized it faced the might of global MNCs, who were doing all they could to protect and enforce their patent rights.

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