The Mechanics of Profit

Mr. Bale of the Geneva-based trade group says pharmaceutical companies operate in a world in which most new drugs are either costly duds or blockbusters. To stay competitive -- and to stay alive in an era of mergers and increasing competition -- they rely on profits from their most successful products. ''One or two products make or break the company,'' Mr. Bale said. ''They drive those blockbusters to maximize revenues.''

Shannon Herzfeld, a PhRMA spokeswoman, took particular issue with India's rationale. ''We object to their premise that intellectual property rights are a barrier to access to good medicine,'' she said. ''Anyone who says, 'We have to steal' is wrong. Stealing ideas is not how one provides good health care.''

In fact, India recognizes Western-style intellectual property rights on most products, including computer software, in which it has a thriving industry. But it does not recognize them on chemicals for medicine or agriculture, a position that dates back to its Patents Act of 1970, for which Mr. Hamied heavily lobbied Prime Minister Indira Gandhi. The law, conceived in postcolonial days when India still suffered famines and the average Indian man could expect to live only about 40 years, was intended to encourage the founding of local industries to break the choke hold of foreign chemical companies.

At the time, India's drug prices were among the highest in the world. Now they are among the lowest. Access to drugs is one reason that average life expectancy has risen to 64 today, just as cheap pesticides based on foreign formulas are part of the reason India now feeds itself.

An important provision in the 1970 law recognized ''process patents'' rather than ''product patents.'' That is, an inventor patents the multistep recipe for making the drug, not the molecule itself. If a rival can tweak the recipe slightly but end up with the same molecule, he may patent that and sell the result.

As Indian drug makers point out, many countries have used process patents to develop new industries, as Japan did in the 1950's. And during the 19th-century Industrial Revolution, Americans freely copied European inventions.

Asked how he feels about being called a pirate, Mr. Hamied tells an anecdote about an American friend who visited India and paid for his trip by buying 1,000 Voltaren tablets, made by Ciba-Geigy, for his mother's arthritis. The price in America was $2,000. In India, because of stiff competition from imitators, Ciba-Geigy sold the same product for 5 cents a tablet, so he paid $50.