1

CIPLA Ltd
PRESENTED BY:

CYRIL SCARIA SHUBHAM GUPTA ABHAY PRATAP

Agenda

Introduction SWOT : Cipla Ltd Act/ Regulations Past & Ongoing Sustainability Practices Sustainability Framework

Introduction: Cipla Ltd

One of the worlds largest generic companies. Over 2,000 products, 65 therapeutic categories, over 40 dosage forms. 34 state-of-the-art manufacturing facilities approved by major international regulatory agencies. Continuous innovation in R&D; over 20 world firsts. Turnover(USD)-1.4 billion having 20,000 employees. Approvals-US FDA, WHO-Geneva, MHRA-UK, TGAAustralia, SUKL-Slovak Republic, APVMA-Australia, among others

Key Ponits: Cipla Ltd.

Cipla,

worlds largest generic pharmaceutical companies was established in 1935.

With

the vision of making India self-reliant and self-sufficient in healthcare.

serves doctors and patients in over 183 countries.. is an integral part of Ciplas business strategy by improving the quality of life for society at large.

Cipla

Sustainability

The

Company has reduced the price of anti-AIDs and Anti-asthma drugs five times through technological advancements.

SWOT Analysis
STRENGTHS 1 Ranks #2 in the retail prescription market & has excellent distribution network 2 Large basket of 1,500 formulations; Partnered 8 leading generics companies in the US for nearly 125 projects. 3 Voluminous product portfolio having more than 200brands,few of them the leading brands. 4 Excellent process R&D skills, considered to be one of the best in the country

5
WEAKNESSES 1 Impact of IPR regime. 2 It is not present in CRAMS and BioPharmaceutical segment which are the best projected segment in the industry.

OPPORTUNITIES

SWOT
THREATS 1 Partnership related; and

1 Bio-therapeutics A new and promising area;

2 Agreement with Avesthagen ; and

3 Venturing towards areas of cardiology and anti-cancer.

2 Potential de-rating.

KEY RISK

An unfavorable court ruling in an ongoing litigation between the Government of India and Cipla regarding alleged overcharging of certain drugs could potentially pressurize the Companys bottom line.

If the cost of raw material keep on increasing due to increased pressure on Chinese companies to move to higher level drugs, companies margin will be hit drastically.

Act/ Regulations

Companies Bill, 2012

Replaced the 56-year-old Companies Act, 1956

By virtue of Clause 135, the concept of CSR has been introduced

Every company having : net worth of Rs.500 crore or more turnover of Rs.1000 crore or more net profit of Rs.5 crore or more

During any financial year is required to constitute a Corporate Social Responsibility Committee.

Companies Bill, 2012

If the company fails to spend such amount the Board shall give in its report the reasons for the same making it a binding obligation on the Board This covers the pharmaceutical companies as well Such a company is required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy

The Pharmacy Act, 1948

10

An Act to regulate the profession of pharmacy Persons, having no knowledge and having no education in pharmacy or pharmaceutical chemistry or pharmacology, were engaged in this profession

This was affecting health of individuals by wrong compounding, mixing or dispensing

This, in turn, will enable them to proactively work towards reducing drug induced diseases The bill proposes higher government funding to invest in training pharmacists.

Consumer Protection Act (CPA) related to Medical Profession

11

Fast pace of commercialization and globalization on all spheres of life has affected the medical as well Consumer means Any "person" who hires or ails of any services/products for a consideration which has been paid or promised or partly paid and partly promised Any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance will be covered by this act Litigations can be filed against doctors/hospitals/ companies in case of above mentioned deficiencies.

Drugs & Cosmetics Act 1940

To check the inferior quality of pharmaceuticals this was enacted

12

An act to regulate import, manufacture, distribution and sale of drugs and cosmetics

It covers licensing and inspection

Labeling, packaging and storage eg CAUTION

Controlled by organizations CDSCO and SDCO

The Environment (Protection) Act, 1986

13

To provide the protection and improvement of environment To safeguard the forests and wildlife of the country The Air (prevention and Control of Pollution) Act was passed in 1981 to Control Air Pollution

Standards for emission or discharge of environmental shall be complied with by an industry

A company shall not exceed the relevant concentration of pollutant in ambient air The Water (Prevention and Control of Pollution) Act was passed in 1974. It aimed at maintaining the purity of water by preventing water pollution

Narcotic Drugs and Psychotropic Substances Act (1985)

14

It is illegal for a person to produce/ manufacture/ cultivate, possess, sell, purchase, transport, store, and/or consume any narcotic drug or psychotropic substance Cultivation/production/manufacture, possession, sale, purchase, transport, storage, consumption or distribution of any of the following substances such as :

Codeine, Beta prodine, Morphine etc.

are banned under the act.

15

CIPLAS Past & Ongoing Sustainability Practices

Sustainability

Sustainability is an integral part of Ciplas business strategy.

Caring for Health, Safety and Environment (HSE)
HSE initiatives are an important part of the business activities. All facilities at the company maintain high standards of occupational HSE practices and most of them are certified for ISO 14001 and OHSAS 18001 standards. There is a defined environmental strategy that focuses on reducing carbon footprint by saving energy, and following water and waste management procedures. The company makes continuous efforts to upgrade the HSE standards.

16

Sustainability

17

Maintaining a modern, well-equipped effluent treatment plant at all our manufacturing facilities. Treated water from these zero discharge facilities is used for maintaining green belts around the factory premises.

Among the first companies to manufacture CFC-free inhalers, 10 years before the Montreal Protocol January 2010 deadline.

Policies have been introduced and are visibly placed to ensure compliance.

Sustainability

18

The company is committed to ensure that all employees operate in a work environment that is compliant with all relevant charters and labor regulations.

Establishing well-equipped facilities and safety laboratories.

Conducting regular safety training programs, including those on behavioral safety to increase safety awareness at all working levels.

Corporate Social Responsibility

19

The Cipla Palliative Care and Training Centre

Provides holistic care to terminally ill cancer patients and their families free of charge. Till now the Centre has given treatment, comfort and solace to more than 7,700 patients. A Pune-based organization which runs a home for children with HIV infection.

Cipla extends support to Manavya

Cipla Foundation

Set up by Ciplas contribution of Rs. 5 Crores.

Aims to provide care and financial support to people in need of healthcare and education in India.

Corporate Social Responsibility 20

The company made a breakthrough in reducing the prices of cancer drugs In order to make drugs for malaria, HIV/AIDS and several neglected diseases, available at affordable prices, CIPLA works closely with several reputed non-profit organizations such as

Drugs for Neglected Diseases Initiative

Medecins Sans Frontieres

Clinton Foundation

Corporate Social Responsibility 21

Pollution

All efforts are made to ensure that no uncontrolled products or chemicals pollute the environment.
Emergency procedures and spills kits are available on-site.

Waste

management

All waste is sent to designated sites and is tracked on a monthly basis. A separate upgraded high-hazard waste area is being built

Corporate Social Responsibility 22

The

carbon footprint exercise

A power correction factor is in the process of being implemented

Currently, electric boilers are used on-site, with the plan to use only one of these to save on electrical consumption. Monthly inspections are carried out on all utility lines to ensure optimal efficiency of the energy services

ISO 14000 principles are being implemented in preparation for future certification.

CORPORATE SOCIAL INVESTMENT 23

Jacob Zuma RDP Educational Trust

5 million donation was made to the trust. The educational grant awarded to students in the field of engineering, medicine and pharmaceutical studies.

Cipla Miles for Smiles

Launched to raise funds to enable Operation Smile SA to create awareness And provide free reconstructive surgery for children born with cleft lips and/or palates.

CORPORATE SOCIAL INVESTMENT 24

AdoptaSchool

Cipla Medpro, for the third time, held a fundraising event in November 2010 for the benefit of the Adopt-a-School project. The funds donated to the Peninsula School Feeding Association were allocated to seven schools and provided meals for 1 336 learners.

25

Past & Some Potential Future Challenges for CIPLA

CHALLENGES
As a part of its sustainability conformance, it tries to offer medicines for the lowest possible price for all diseases from Asthma to AIDS

26

Cipla has always been associated with selling of low cost drugs globally.

Most of the challenges faced are deliberate suing by its competitors for patent infringement or for the low prices.

Even the new patent laws of India is a huge challenge.

Past Challenges
1. INDIAN PATENTS ACT, 2005 2. BAYER PHARMACEUTICALS

27

INDIAN PATENTS ACT, 2005

28

The Parliament of India made key amendments to the Indian Patents Act in 2005.
Severely affected the AIDS drug being offered by Cipla.

Reverse engineering was banned.

Against $12000 needed for a years AIDS treatment, Cipla offered it for $300 annually. Countered by offering a cocktail of 3 drugs in 1 tablet which was quite successful in South Africa.

Protested against the new laws, but no changes were made.

BAYER PHARMACEUTICALS

29

German pharmaceutical giant Bayer sued Cipla for patent infringement. Low prices of cancer drug Nexavar by Cipla. 76% of the price was slashed by Cipla at 1710.

Not a violation of TRIPS agreement.

Cipla was appreciated by European medical relief and charity organizations. The price was fixed at 8800 for 120 tablets compared to 280000 by Bayer. 6% royalty on the net sales to the patent holder.

PLANS TO EXPAND OVERSEAS

30

Refrained from setting from its own direct presence in the markets abroad.

Sells it products through partnership with local firms and established pharmaceutical companies.

Front end sales yield 30 to 40% more profit.

costed both its brand value and profits.

31

Business Sustainability Framework for CIPLA

Business Sustainability Framework

32

Business Sustainability
seeks to create long-term shareholder value by embracing the opportunities and managing the risks that result from an organizations economic, environmental, and social responsibilities.

must meet the needs of the organization and its stakeholders today while also protecting, sustaining, and enhancing the environmental, social, and economic resources needed for the future

Moving Toward Business Sustainability

33

Cipla Ltd needs to enhance its probability of achieving business success and sustainability Move through several phases, during which it progressively broadens the scope of its approach
Quality

management excellence sustainability

Business Business

Framework for Sustainability: Cipla Ltd

34

Framework suggested for CIPLA

Engaging in widespread differential pricing of essential medicines in developing countries, especially the worlds poorest, to support the development of viable markets. Increasing research and development investment for diseases affecting developing countries, including through engagement in public-private partnerships.

Working to support broader health and development goals in developing countries, including by considering voluntary licences.

Reporting on activities designed to increase access to essential medicines

Good Practice Framework

This

35

framework will consist of four areas:

of essential medicines

Affordability Investment

in R&D

Pharmaceutical
Importance

company impacts on the ground in developing countries

of reporting

Affordability of essential medicines

Cipla Ltd should :

36

Develop or maintain, differential pricing offers for Developing countries. Least developed countries (LDCs) Sub-Saharan Africa

Monitor and publicly disclose basis of product scope, price , population coverage, countries, pro-poor nature, product leakage, health systems strengthening overall commitment of stakeholders.

Research and Development

37

As per framework Cipla Ltd Should:

Increase levels of investment in research and development for medicines and vaccines for diseases disproportionat ely affecting developing countries.

Work in partnership with others where appropriate, including through public private partnerships.

Develop approaches to intellectual property management that optimise the benefits of R&D, including through sharing knowledge

Impact in developing countries

Cipla

38

should:

Work with stakeholders in countries of operation to ensure access to medicines initiatives are integrated with national systems and priorities

Commit to follow WHO and IFPMA guidelines on promotion of medicines.

Explore opportunities for production in developing countries, including through wholly owned subsidiaries

Reporting and Verification

39

As per the framework Cipla Should:

Report regularly on access to essential medicines activities.

Work with third party verifiers where appropriate, to measure, and report on, impact.

Take steps to make reports accessible to a wide range of stakeholders, including key stakeholders in developing countries.

40

Thank you