Drug Firm's Bold Promise
posted: 16/02/2009
The new chief executive of pharmaceutical giant GlaxoSmithKline (GSK) says the company will cut prices for its drugs in the developing world.
Andrew Witty said GSK would cut the cost of drugs in the 50 poorest nations to 25% of price in the UK and US. He also said the firm would share knowledge of patents and reinvest profits in local clinics.
Charities have long campaigned for such a policy as patents prevent cheaper generic versions of drugs.
Mr Witty told the Guardian newspaper drugs companies had a duty to help the poor. He said: "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."
Formulas and processes owned by GSK under patent will be shared with researchers and 20% of the firm's profits in the developing world will be reinvested in hospitals and clinics there.
Move welcomed by HIV and health campaigners
Health campaigners have said more still needs to be done but they welcomed the initiative. Oxfam said affordable HIV treatment, for instance, could stop 6,000 people dying every day in countries affected by the HIV/Aids epidemic.
Charity World Vision's director of advocacy Mike French said: "Slashing drug prices is good. But without the necessary health infrastructure many won't be able to access those drugs. Therefore, investment by GSK, along with the knowledge pooling, make this a landmark announcement.
"This is a gutsy move in a commercial world. Witty has demonstrated a willingness to make saving lives a business goal along with making money."
George House Trust Chief Executive Michele Reid responded, saying:
"Andrew Witty has taken a bold first step in the right direction. We hope that other international drug companies will soon match and then outbid GSK's move. They can and need to do more if we are to see real change in the developing world for people living with HIV."
"In the future, rather than selling their own HIV drugs to the developing world for a bit less, we'd like to see the pharmacos allowing the generic companies to produce drugs more cheaply."
"We also need Witty's "patent pooling" idea to include HIV drugs, so we can have faster development of new HIV treatments. This is a good start, but let's hope it leads to saving lives on the ground, which should be everyone's driving ambition in the HIV drugs marketplace."
Could do better - check the small print
Critics of the drug companies acknowledged yesterday that GSK was making strides, but said it could go further. It's proposal to give away 20% of profits in the 60 least developed countries is not what it seems - GSK currently has operations in only 18 of them and earns around £30 million a year from them.
"I recognise the fact that GSK is seeking to meet concerns," said Michelle Childs, director of policy and advocacy at Médecins sans Frontières, who welcomed the move to open to pool patents on chemical compounds that could help the development of treatments for neglected diseases. But, she said, she would challenge GSK to go further.
Need for HIV patent pool and cheaper drugs from generic manufacturers
"He is saying there is no need for a patent pool for HIV. Our position is that there is an urgent need for a patent pool for HIV because of the rising prices of new first and second line drugs for patients who develop resistance."
Buying cut-price drugs from GSK would not necessarily be the best move for the poorest countries, she added.
Generic companies were capable of producing drugs at lower prices than big pharma could manage, because of the lower costs of manufacture. GSK's combination HIV drug Combivir had been reduced from $730 (£506) in 2001 per patient per year and now sells at $197 in the least developed countries.
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letters from Stop Aids Campaign and others in response
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