Drugs giant offers an answer to the toxic question

[Peltigera]

Profits before the poor?

Drugs giant offers an answer to the toxic question facing a 'heartless' industry

Sarah Boseley

The Guardian, Saturday 14 February 2009

For Andrew Witty, it's a question of redefining the unwritten contract that major drug companies have with society. For critics of big pharma, it's about addressing widely felt concerns about an industry that has often seemed heartless. Either way, the changes proposed by the chief executive of GlaxoSmithKline goes to the core of one of the most toxic debates of our time.

The most serious charge against such firms is that they put profits ahead of poor people's lives. It's an allegation GSK has not escaped, even though it has cut the prices of its Aids drugs in developing countries and has promised efforts to develop a malaria vaccine.

The low point came in 2001, when GSK was among 39 multinational companies that took legal action against the South African government to try to prevent it importing cheap drugs. Amid an international outcry, the drug companies backed down. "I don't think anybody can claim that was handled well," said chief executive Andrew Witty.

He admits the industry could have done more in the past, but claims the problem was a fixed mindset. "I would say people tried really hard within a set of rules which haven't really been challenged very hard ... I guess what I'm just challenging a little bit is like why can't those rules be flexed a bit?"

Witty says drug companies have an obligation to respond to society's needs and demands. "It's been obvious for a while, I think, that efforts have to be made to really reassert and strengthen that contract with society."

That goes to the very core of the business. Drug companies are criticised for failing to deliver for the rich world as well as the poor - for the UK and US as well as Tanzania or Ethiopia. They stand accused of focusing their efforts on making "me-too" blockbusters - barely altered copies of other companies' billion dollar sellers for indigestion or heart disease - rather than working on diseases where there are few treatments, such as Alzheimer's.

Transparency is a major issue. Witty has pledged to publish all clinical trial data, whether positive or negative - and be open about GSK's payments to doctors.

He has also signalled his willingness to negotiate on price, in a climate where value for money is increasingly discussed and other countries are contemplating setting up a version of Nice, the National Institute for Healthcare and Clinical Excellence, which decides whether drugs are cost-effective for the NHS.

Another part of the social contract is ending practices that cause public anxiety, he said. About eight weeks ago, GSK announced without fanfare that it would commit never again to experiment on great apes.

"People said that's a mistake, because you might one day have to go back and do those experiments," he said. "Society will accept a degree of experimentation with animals provided it has a purpose, provided there are no alternatives and provided it is done compassionately and humanely, but they trust us to shut the door behind us when we don't need to do it any more."

He likens this to the risk he admits he is taking that dropping prices in the poorest countries will result in cheap drugs being shipped clandestinely back for sale in the rich world.

"It's not a reason not to do it. Of course it creates risk but now it's our job to work with the Europeans and the Americans and whoever else is involved to try and get them to understand why it is important it doesn't all get reimported, why it's important that you don't benchmark the price in New York to the price in Ethiopia, because it's just wrong to do that. It's almost as wrong to do that as it would be not to do it in the first place."

GSK would love to undermine the Indian and Chinese generics companies, which sell copies of their drugs at rock-bottom prices in Africa and Asian countries where patents do not apply, because - since nobody had the money to buy their drugs - pharma companies did not take them out.

But mostly this is about diseases for which there are no drugs. There has been mounting pressure from the World Health Organisation and non-governmental organisations for action, especially on patents. Witty said he had spent many years in Africa and Asia and seen "the consequences of these diseases at a kind of personal level ... and also the damage it does to a society - the way entire populations become hollowed out and almost inevitably are consigned to not being able to progress properly."

He is trying, he said, to start a different kind of discussion with the various stakeholders. "If we can just make one piece of progress on one disease which hasn't had any progress for 40 years it has to be worth it."

Critics of the drug companies acknowledged yesterday that GSK was making strides, but said it could go further, for instance, on the point of giving away 20% of profits in the 60 least developed countries - 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. "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.

guardian.co.uk © Guardian News and Media Limited 2009

[Peltigera]

Drug giant GlaxoSmithKline pledges cheap medicine for world's poor

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

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."

guardian.co.uk © Guardian News and Media Limited 2009