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GlaxoSmithKline’s leap forward will help those that need it most
The pharmaceutical industry was once a case study in how not to do responsible business. But with GlaxoSmithKline’s latest initiative, those days could soon be over.
GlaxoSmithKline has pledged to set up a “patent pool” where drug companies will share patents on treatments for neglected diseases such as tuberculosis, malaria and leprosy. Pharmaceutical giants have overlooked the research and development on these diseases because the market for treatments is, in financial terms, small.
GlaxoSmithKline has also pledged to cut the price of its drugs for least developed countries, the 50 poorest nations in the world, to no more than 25% of their cost to rich countries. It will reinvest 20% of profits from these sales in improving healthcare infrastructure in those 50 countries.
Chief executive Andrew Witty outlined his vision for Big Pharma to be “a catalyst for change” in a speech to Harvard medical school on 13 February.
The patent pool pledge is by far the boldest. Sharing intellectual property has to date been a taboo for drug companies. Patents enable the industry to spend huge amounts on drug development, all leading to high prices. Now GSK and Witty have challenged the commercial logic of the industry. They believe that by pooling resources, drug companies could produce new drugs where there were not enough before, and at lower cost. This would have clear benefits for patients.
The lack of affordable treatments for neglected diseases is a clear case of market failure. Should it take off, the patent pool will shake up Big Pharma. GSK will make its rivals look increasingly old-fashioned if they do not go along with its idea and instead cling to a model that has demonstrably failed to serve patients.
Yet drug companies could be reluctant to take up the challenge and share intellectual property. The compounds and drug processes that could be committed to a neglected diseases patent pool might have applications for treatments that afflict the developed world. Industry players must approach the patent pool idea in good faith, and agree clear guidelines for its use.
And even with its new pricing model, many GlaxoSmithKline drugs will remain unaffordable to people who really need them – either in least developed countries, or middle-income countries that have large numbers of poor people who are not covered by GSK’s least developed country price pledge.
GlaxoSmithKline’s move remains important for the message it sends to the rest of the industry and to the world about its commitment to improve access to medicines. It will further aid the rehabilitation of drug companies in the eyes of the public since the Aids drug patent scandal of 10 years ago.
Big Pharma has come a long way since 1998 when 39 companies tried to sue Nelson Mandela’s South Africa government for violating patents to give Aids drugs to patients. The case was dropped in 2001. But many segments of the public have yet to forgive drug companies for what was regarded as a desire to put corporate profit before human life.
GlaxoSmithKline has been at the forefront of industry efforts in the past 10 years to cut prices and improve access. It is now going even further with its plans for a patent pool. Other drug companies should take a dip.