Pharmaceutical News

Common sense prevails… WSJ

GlaxoSmithKline PLC, the world’s second-biggest drug maker by sales, plans to cut prices in the world’s poorest countries and invest 20% of its profit from those markets into building health clinics and other infrastructure.

In a speech at Harvard Medical School on Friday, Glaxo Chief Executive Andrew Witty also proposed that drug companies, nonprofit groups and others donate their patents related to neglected tropical diseases to a common pool, with the hope that such a pool would speed development of new drugs.

“Society expects us to do more in addressing these issues. To be frank, I agree,” Mr. Witty said, according to his prepared remarks. “We have the capacity to do more, and we can do more.”

Mr. Witty said Glaxo will cut prices on its patented medicines in the poorest 50 countries in the world so that they are no higher than 25% of the price in developed countries.

In an interview before his speech, Mr. Witty acknowledged that the concessions won’t cost Glaxo much. The British company’s total sales in the poorest countries are about £30 million, or roughly $43 million, a year; 20% of its profit would probably amount to about £1 million to £2 million annually, he said.

Glaxo’s treatments for hepatitis B, genital herpes, malaria and asthma are among those that will be subject to price cuts, a Glaxo spokeswoman said. Glaxo already sells its HIV drugs in these countries at not-for-profit prices, and if those prices aren’t already lower than 25% of the developed-world price, they will be reduced, as well, she said.

Michelle Childs, director of policy advocacy at Medecins Sans Frontieres, said any price cut is welcome but added that the drop won’t necessarily make the drugs affordable to poor people in countries such as Bangladesh, Uganda and Cambodia. Usually, drugs become affordable only when cheap generics become available, she said.

If a patent pool is created, Glaxo should be able to contribute patents related to malaria and tuberculosis, the Glaxo spokeswoman said. Robert Don, a scientist with Drugs for Neglected Diseases Initiative, a nonprofit drug developer in Geneva, said such a pool would be invaluable.

Many drug companies, including Glaxo, already share their research with Drugs for Neglected Diseases Initiative, but negotiating access to their intellectual property can take as long as a year, he said. And the group sometimes can’t work with more than one company on the same disease area at a time, for fear of leaking one company’s intellectual property to another.

Mr. Witty said Glaxo wouldn’t contribute its HIV patents to the pool, since the company thinks there already is innovation in HIV medicines, spurred by the profits to be made in Western markets.

Ellen ‘t Hoen, a senior adviser to the international drug-purchasing consortium Unitaid, said she hopes Glaxo will still contribute its HIV patents to a new pool Unitaid is trying to create. The goal is for big companies to share patents on their latest HIV drugs with generic-drug companies, which would sell the treatments cheaply in the poorest countries and pay the patent holders a royalty.

The generic-drug makers also could tweak the drugs to make them more usable in the poorest countries, such as in pediatric formulations. Ms. ‘t Hoen said Unitaid has had early talks with Glaxo and other companies, and that all have agreed to consider the idea.