Healthy Skepticism Library item: 15119

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Publication type: news

Boseley S.
Profits before the poor? Drugs giant offers an answer to the toxic question facing a 'heartless' industry
The Guardian 2009 Feb 14
http://www.guardian.co.uk/business/2009/feb/14/gsk-big-pharma-drugs

Full text:

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.