[Ip-health] GlaxoSmithKline to lower drug prices in poorer countries

Joanna Keenan joanna.l.keenan at gmail.com
Thu Mar 31 09:57:36 PDT 2016

 GlaxoSmithKline to lower drug prices in poorer countries

Move to let patents lapse will allow cheaper generic versions to come on to
the market without the threat of legal action

GlaxoSmithKline <http://www.theguardian.com/business/glaxosmithkline> is
taking action to make medicines more affordable in developing countries,
including waiving patent protection for new drugs in the world’s poorest

Britain’s biggest drugmaker said it would not file patents for new
medicines in the poorest countries <http://data.worldbank.org/region/LDC>,
such as Afghanistan, Rwanda and Cambodia, allowing cheaper generic versions
to come on to the market without the threat of legal action.

GSK’s chief executive Sir Andrew Witty said the company was already doing
this in some countries, but wanted to streamline its approach to “recognise
the realities of the world”. He said the move would have little effect on
the group’s profits.

In lower middle income countries
such as Kosovo, Pakistan, Morocco and Ukraine, the drugmaker will offer
licences to generic drugmakers for 10 years, in return for a small royalty
on sales.

The measures will affect 85 countries, helping more than 2 billion people,
and benefit Africa most, according to GSK. Any GSK medicines on the World
Health Organisation’s list of essential medicines will be automatically

Rohit Malpani, director of policy and advocacy at Médecins Sans Frontières,
gave a muted response. He noted that the world’s poorest countries were
already exempt from patent protection rules until 2033
under a World Trade Organisation agreement, and added that it did not make
commercial sense for the pharma industry to seek patents in many other
developing countries.

He said GSK’s move excluded generic drug producing countries such as India,
Brazil and China, as well as many other middle income countries that are
struggling to pay for medicines. He argued that it was not clear how it
would work in practice, and that it should be up to governments, not
companies, to make such decisions.

Speaking from New York ahead of a UN panel meeting on access to medicines,
Witty said GSK would adopt a “customised approach” as standards of living
rise in developing countries.

He pointed to India, where other pharmaceutical companies have been
embroiled in patent disputes with local generic firms. GSK has sought to
avoid such disputes by filing only a handful of patents and adopting
“Indian-style pricing” starting at five rupees for Calpol and ulcer drug

Witty said the new tiered model on intellectual property was analogous to
GSK’s pricing on vaccines. However, the company, along with US group
Pfizer, has come under fire from MSF
which has criticised high prices for new vaccines and called on the firms
to reduce the price of the pneumococcal conjugate vaccine to $5 a child in
developing countries.

The move will be seen as an attempt by Witty to seal his legacy before
he stands
down from his post next year
Under his leadership, GSK has cut the prices of HIV and other drugs in
developing countries, making them more affordable.

He has also led the way on opening access to clinical research and stopped
controversial sales practices, following a damaging corruption scandal in
China in 2013 for which the company was fined £300m.

The rest of the industry has also been moving towards tiered pricing for
poorer countries, in response to criticism that many new drugs are too
expensive for the developing world.

GSK also plans to commit its future cancer therapies – it has about a dozen
in development after selling a portfolio to Novartis – to the Medicines
Patent Pool <http://www.medicinespatentpool.org/about/>.

This is a UN-backed initiative through which pharma companies has been
granting licences to generic drugmakers in the developing world to make
cheaper drugs for HIV, hepatitis C and tuberculosis. Witty said there was a
growing need for affordable cancer treatments in developing countries.

Professor Raymond Hill, visiting professor at Imperial College, welcomed
the move as a “brave and positive step” that sets a “precedent for other
major multi-national pharma companies to follow”.

He added: “The impact of this move on the treatment of cancer and other
diseases in each individual country will depend on whether there is a local
adequate healthcare infrastructure that will allow the safe use of powerful
new drugs.”

Joanna Keenan
Press Officer
Médecins Sans Frontières - Access Campaign
P: +41 22 849 87 45
M: +41 79 203 13 02
E: joanna.keenan[at]geneva.msf.org
T: @joanna_keenan


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