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Case Study About Ethical Conduct in Cipla Limited. Essay

Cipla Limited is a pharmaceutical company based in Mumbai, India. Founded by nationalist Indian scientist Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935. Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions. Founded prior to Indian independence and on the principle that India needed to become self-sufficient in supplying medicine to its people, Cipla has emphasized self-reliance and the right of all people to health and access to medicine, regardless of their economic circumstances or where in the world they happen to live. Cipla cooperates with other enterprises in areas such as consulting, commissioning, engineering, project appraisal, quality control, know-how transfer, support, and plant supply.


* One of the world’s 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.


Cipla’s journey began in 1935 when our founder, Dr. K. A. Hamied, set up an enterprise with the vision to make India self-sufficient in healthcare. Over the past 77 years, they have emerged as one of the world’s most respected pharmaceutical names, not just in India but worldwide.

They have 34 state-of-the-art manufacturing facilities that make Active Pharmaceutical Ingredients (APIs) and formulations, which have been approved by major international Regulatory Agencies. They have over 2000 products in 65 therapeutic categories; with over 40 dosage forms, covering a wide spectrum of diseases ranging from communicable, non-communicable, common and emerging diseases to even rare diseases.

Research and Development (R&D) centre is focused on developing innovative products and drug delivery systems, giving the country and the world many ‘Firsts’.

Today, they are one of the world’s largest generic pharmaceutical companies with a strong presence in over 170 countries. They maintain world-class quality across all products and services.


* In 1935, the founder, Dr. K. A. Hamied set up Cipla to make India self-reliant in healthcare.

* In 1939, Mahatma Gandhi visited Cipla and inspired the founder to make essential medicines for the country, and strive for self-sufficiency. During World War II, when India was dependent on imported medicines and there was an alarming shortage of life-saving drugs, we manufactured them for the country.

* In the 1960s, they pioneered API manufacturing in the country and helped lay the foundation for the bulk drug industry in India.

* In 1970, they spearheaded the New Patent Law by which an Indian
pharmaceutical company was allowed to manufacture a patented product as long as the process to manufacture it was changed. This enabled Indian companies for the first time to manufacture any medicines and make them available and affordable for all Indians.

* In 1978, they pioneered inhalation therapy in India with the manufacture of Metered-Dose Inhaler (MDI), at a time when the country stopped receiving imported supplies. Today, we have the world’s largest range of inhaled medication and devices.

* In 1994, they launched Deferiprone, the world’s first oral iron chelator which revolutionized the treatment for thalassemia. For the first time patients with thalassemia had an option that was affordable, painless and convenient.

* In 1996, they gave the world the first transparent dry powder inhaler which was so simple and easy to use, it changed the face of inhalation therapy in India.

* In 2001, they pioneered the access to HIV treatment by making antiretrovirals (ARVs) available at less than a ‘Dollar a Day’. The cost of treatment dramatically fell from $12,000 per patient per year to $300 per patient per year. This caused a revolution where HIV treatment became a reality for the world and millions of lives could be saved.

* During the 2005 Bird Flu epidemic, they produced an anti-flu drug within a period of 2-3 months, which would have normally taken at least 3 years to develop.

* In 2012, they made a breakthrough in reducing the prices of cancer drugs, thus making world-class medicines affordable and accessible to cancer patients.

* They are committed to addressing the unmet medical needs of the world by venturing into newer challenges in platform technologies, biotechnology and
stem cells. *
Cipla has a product range comprising antibiotics, anti-bacterial, anti-asthmatics, anthelmintics, anti-ulcerants, oncology, corticosteroids, nutritional supplements and cardiovascular drugs. The company has at least nine different prescription drugs registered with the US FDA. Active in the anti-bacterial and anti-asthmatic segments, Cipla was the first in Asia to launch a non-CFC metered dose inhaler.

Cipla is famous for its cancer and HIV/AIDS treatment.

Founder: Dr. K.A.Hamied (1898-1972)
Chairman: Dr. Yusuf K Hamied
Executive Vice-Chairman: Mr. M.K. Hamied
Managing Director and Global Chief Executive Officer: Mr. Subhanu Saxena
Whole-time Director: Mr. S. Radhakrishnan
Non-Executive Directors:
Dr. H.R.Manchanda
Mr. V.C.Kotwal
Mr. M.R.Raghavan
Mr. Pankaj Patel
Mr. Ashok Sinha

To heal India and to become the biggest and the most admired pharmaceutical company in India.

Cipla commits itself to endeavor to satisfy their customer’s needs in every manner possible: through by developing and marketing an effective, safe, quality product and by offering products at a price affordable by all patients, excellent service.


Particulars Details as on March 31, 2013 in,
1 Paid up capital – 160.58 crores
2 Total turnover (Revenue from operations) – 8294.58 crores
3 Total profit after taxes – 1507.11 crores
4 Total spending on corporate social responsibility (CSR) by the Company including through its Foundations/Trusts, namely Cipla Foundation, Cipla Public Charitable Trust and Cipla Cancer and AIDS Foundation – 7.65 crores

As required under revised Clause 49 of the Listing Agreement the following code of conduct has been approved by the Board of Directors and is applicable to the Directors and Senior Management of the Company.

1. Ethical conducts
All directors and senior management employees shall deal on behalf of the Company with professionalism, honesty, integrity as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be as such by third parties.

2. Conflict of interest
Any director or senior management employee of the Company shall not engage in any business, relationship or activity, which might detrimentally conflict with the interest of the Company.

3. Transparency
All directors and senior management employees of the Company shall ensure that their actions in the conduct of business are totally transparent except where the needs of business security dictate otherwise. Such transparency shall be brought about through appropriate policies, systems and processes.

4. Legal compliance
All directors and senior management employees of the Company shall at all times ensure compliance with all the relevant laws and regulations affecting operations of the Company. They shall keep abreast of the affairs of the
Company and be kept informed of the Company’s compliance with relevant laws, rules and regulations. In the event that the implication of law is not clear, the course of action chosen must be supported by eminent legal counsel whose opinion should be documented.

5. Rightful use of the Company’s assets
All the assets of the Company both tangible and intangible shall be employed for the purpose of conducting the business for which they are duly authorized. None of the assets of the Company should be misused or diverted for personal purpose.

6. Cost consciousness
All the directors and senior management employees of the Company should strive for optimum utilization of available resources. They shall exercise care to ensure that costs are reasonable and there is no wastage. It shall be their duty to avoid ostentation in Company expenditure.

7. Confidential information
All directors and senior management employees shall ensure that any confidential information gained in their official capacity is not utilized for personal profit or for the advantage of any other person. They shall not provide any information either formally or informally to the press or to any other publicity media unless specifically authorized to do so. They shall adhere to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992.

8. Relationships with Suppliers and Customers
The directors and senior management employees of the Company during the course of interaction with suppliers and customers, shall neither receive nor offer or make, directly and indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits which are intended or perceived to obtain business or uncompetitive favours for the conduct of its business. However, this is not intended to include gifts of customary nature.

9. Interaction with Media
The directors and senior management employees other than the designated spokespersons shall not engage with any member of press and media in matters concerning the Company. In such cases, they should direct the request to the designated spokespersons.

10. Safety and Environment
The directors and senior management employees shall follow all prescribed safety and environment-related norms.

My thought about the Company

Cipla is one of the top pharmaceuticals company in India. Cipla that uses the latest pharmaceutical Technology to funnel over seven decades of experience in to one capsule cures, one drop that defends and one puff that protects. Cipla explore every drug to its particle and instill safe and sure healing to create one dose of confidence, for us the final measure our success is a simple curve the smile of health regained. Today cipla continue to work tirelessly to realize their founder’s vision of providing quality medicine at affordable prices.

Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
The Company has a Code of Conduct which provides an ethical road map to its Directors and senior management. The Code prescribes that all Directors and senior management shall show honesty, integrity, as well as high moral and ethical standards in their work, and shall not engage in any business, relationship or activity which might detrimentally conflict with the interest of the Company. It provides guidance on making the right decisions and doing only right things. The Code further goes on to state that in order to avoid any kind of ethical violations in the organization, Directors and Senior management employees shall also make certain that all their actions in the conduct of business are totally transparent. The Company is taking steps to extend its policy on ethics and transparency to other key stakeholders. No significant complaints from the Company’s stakeholders were
found to be pending for redressal at the end of the reporting year.

Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
The Company has adopted the lifecycle approach in order to ensure product sustainability across its value chain. In this regard, the Company has promoted local suppliers who produce unique products, such as respiratory products. Certain packaging and other supporting material (linen, printing etc) are also sourced from vendors in the vicinity of the Company’s manufacturing facilities, facilitating local economic growth. Local sourcing also lowers the transportation costs and also helps in the reduction of vehicular air emissions. The waste generated in the Company’s operations is either recycled or disposed off safely. As a further example of the Company’s product responsibility, it has reduced the prices of three generic cancer drugs, Erlocip, Docetax and Capegard, by up to 64% with an objective of making these medicines available to patients at affordable prices.

Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
The Company has identified stakeholders across its value chain. These include customers, distributors, stockiest, civil society organizations, doctors, employees, investors, local communities, patients (and health care providers), regulatory bodies, government and suppliers. The Company continually engages with its stakeholders through various established means in order to understand their respective aspirations, expectations and concerns. In keeping with its commitment to support the vulnerable and marginalized sections of the society, the Company supports Manavaya, a Pune-based non-governmental organization engaged in caring and rehabilitation of abandoned children infected with HIV/AIDS. The Company supports this initiative by running a mobile health care unit which reaches out to the poor and disadvantaged communities of 10 villages on the outskirts of Pune. Further, the Company also supports Snehalaya, an NGO working with destitute women, including sex workers, and their children living with HIV/AIDS in Ahmednagar, Maharashtra. Financial help has been
provided for the construction of an English medium school which will provide education to more than 400 children of marginalized and vulnerable communities including children infected with HIV/AIDS.

Cipla with Sun Pharma were alleged for not completing clinical trials for new drugs on May 13, 2012. When contacted, a Cipla spokesperson said: “We have followed the procedure as laid down under the Drugs & Cosmetics Act for grant of such licenses and there has been no violation”. Cipla said as per the law, it is not mandatory to carry out Phase III trials in India for each and every new drug.

Cipla Limited has rarely been accused for Ethical misconduct. In the above mentioned case, the Drug Control General of India (DGI) agreed with Cipla that the clinical trials were conducted properly after investigating thoroughly. The code of conduct designed by Cipla Ltd., is followed strictly. As an outsider, I’ll say that the company has been ethical at all times as even after intensive research, one ethical misconduct showed up, that too which happened over an year ago.

* http://en.wikipedia.org/wiki/Cipla
* http://www.cipla.com/Home.aspx
* http://articles.economictimes.indiatimes.com/2012-05-13/news/31689679_1_drug-controller-general-dcgi-new-drugs * http://money.rediff.com/companies/cipla-ltd/12540010/balance-sheet * http://www.cipla.com/CiplaSite/Media/PDF/Sustainability/CIPLA_Business_Responsibility_Report_2012_13.pdf * http://seminarprojects.com/Thread-assignment-%E2%80%93-i-a-study-on-cipla-ltd

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