PHA-Exch> Drug giant GlaxoSmithKline pledges cheap medicine for world's poor

[Claudio Schuftan]

From: Meghana Bahar meghana at haiap.org

Head of GSK shocks industry with challenge to other 'big pharma' companies

by Sarah Boseley, health editor
guardian.co.uk, Friday 13 February 2009 21.44 GMT

The world's second biggest pharmaceutical company is to radically shift its
attitude to providing cheap drugs to millions of people in the developing
world.

In a major change of strategy, the new head of GlaxoSmithKline, Andrew
Witty, has told the Guardian he will slash prices on all medicines in the
poorest countries, give back profits to be spent on hospitals and clinics
and – most ground-breaking of all – share knowledge about potential drugs
that are currently protected by patents.

Witty says he believes drug companies have an obligation to help the poor
get treatment. He challenges other pharmaceutical giants to follow his lead.

Pressure on the industry has been growing over the past decade, triggered by
the Aids catastrophe.

Drug companies have been repeatedly criticised for failing to drop their
prices for HIV drugs while millions died in Africa and Asia. Since then,
campaigners have targeted them for defending the patents, which keep their
prices high, while attempting to crush competition from generic
manufacturers, who undercut them dramatically in countries where patents do
not apply.

The reputation of the industry suffered a further damaging blow with the
publication and film of John le Carré's book The Constant Gardener, which
depicted drug companies as uncaring and corrupt.

But speaking to the Guardian, Witty pledged significant changes to the way
the drug giant does business in the developing world.

He said that GSK will:

• Cut its prices for all drugs in the 50 least developed countries to no
more than 25% of the levels in the UK and US – and less if possible – and
make drugs more affordable in middle-­income countries such as Brazil and
India.

• Put any chemicals or processes over which it has intellectual property
rights that are relevant to finding drugs for neglected diseases into a
"patent pool", so they can be explored by other researchers.

• Reinvest 20% of any profits it makes in the least developed countries in
hospitals, clinics and staff.

• Invite scientists from other companies, NGOs or governments to join the
hunt for tropical disease treatments at its dedicated institute at Tres
Cantos, Spain.

The extent of the changes Witty is setting in train is likely to stun drug
company critics and other pharmaceutical companies, who risk being left
exposed. Campaigners privately say the move is remarkable, although they
worry that it may undermine the generics industry which currently supplies
the cheapest drugs in poor countries.

Witty accepts that his stance may not win him friends in other drug
companies, but he is inviting them to join him in an attempt to make a
significant difference to the health of people in poor countries.

"We work like crazy to come up with the next great medicine, knowing that
it's likely to get used an awful lot in developed countries, but we could do
something for developing countries. Are we working as hard on that? I want
to be able to say yes we are, and that's what this is all about – trying to
make sure we are even-handed in terms of our efforts to find solutions not
just for developed but for developing countries," he said.

"I think the shareholders understand this and it's my job to make sure I can
explain it. I think we can. I think it's absolutely the kind of thing large
global companies need to be demonstrating, that they've got a more balanced
view of the world than short-term returns."

The move on intellectual property, until now regarded as the sacred cow of
the pharmaceutical industry, will be seen as the most radical of his
proposals. "I think it's the first time anybody's really come out and said
we're prepared to start talking to people about pooling our patents to try
to facilitate innovation in areas where, so far, there hasn't been much
progress," he said. "I can't tell you how many speeches I've heard about –
oh, you know – 'I wish we could make progress on TB' or 'Why haven't we got
treatments for these things?' We all sit there saying well yes, it's
terrible isn't it, instead of actually trying to do something about it. So …
what I really hope this does is stimulate people to start engaging with us,
and maybe other people to say look, actually, if you did it this way it
could really work.

"Some people might be surprised it's coming from a pharma company. Obviously
people see us as very defensive of intellectual property, quite rightly, and
we will be, but in this area of neglected diseases we just think this is a
place where we can kind of carve out a space and see whether or not we can
stimulate a different behaviour." He is aware that others in the
pharmaceutical industry may accuse him of selling the family silver. Some
people, he said, "are going to hate this". But he added: "I do think that
many CEOs of many companies do worry about this issue and do have it in
their minds and who knows, maybe somebody has to move before many people
move. Equally I could imagine getting a phone call saying 'What are you
doing?'"

Campaigners gave a cautious welcome to GSK's strategy. But Oxfam and
Médecins Sans Frontières both said the company should go further and include
HIV drugs in the patent pool, and warned that generics companies have always
been able to offer lower prices than big pharma, because of their lower
production costs.

"He is breaking the mould in validating the concept of patent pools," said
Rohit Malpani who runs Oxfam's access to medicines campaign. "That has been
out there as an idea and no company has done anything about it. It is a big
step forward. It is welcome that he is inviting other companies to take this
on and have a race to the top instead of a race to the bottom."

SOURCE LINK:
http://www.guardian.co.uk/business/2009/feb/13/glaxo-smith-kline-cheap-medicine

Click here <http://d2.dgroups.org/?aht07xx7> to read online.
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