[Ip-health] WSJ: Glaxo Plans to Cut Drug Prices in Poorest Countries

[Malini Aisola]

http://online.wsj.com/article/SB123454760558884345.html?mod=3Drss_whats_new=
s_us_business
Glaxo Plans to Cut Drug Prices in Poorest Countries
By Jeanne Whalen

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 are about =C2=A330 million, or roughly $43 millio=
n,
a year; 20% of its profit would probably amount to about =C2=A31 million to
=C2=A32 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 teatments 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.

Write to Jeanne Whalen at jeanne.whalen@wsj.com


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Malini Aisola
Knowledge Ecology International
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