CSR & Pharmaceuticals: Big Pharma on Trial - Part 2

By Wayne Visser

This blog follows on from Part 1

It is nearly ten years later and the pharmaceutical companies are still trying to rebuild their reputations. As Mail & Guardian journalist Qudsiya Karrim reported for Inside Story in 2010: The past decade has been a public relations nightmare for big pharmaceutical companies – and deservedly so, their critics say. Activists and nongovernment organizations the world over have slated Big Pharma for putting profits ahead of people and vigorously enforcing their intellectual property rights, preventing many from gaining access to life-saving medication. It’s an ugly story told repeatedly – in the media, over dinner, at AIDS conferences and during university seminars – and it has earned the pharmaceutical industry an unmatched notoriety.

But have they learned their lesson? The latest and possibly most responsive action has been from GlaxoSmithKline (GSK). Early in 2009, CEO Andrew Witty announced a major reform in their corporate policy on drug affordability and accessibility. In particular, he said GSK will cut its prices for all drugs in the 50 least developed countries to no more than 25% of the levels in the UK and US – and less if possible – and make drugs more affordable in middle-income countries such as Brazil and India. In addition, GSK will reinvest 20% of any profits it makes in the least developed countries in hospitals, clinics and staff and invite scientists from other companies,

NGOs or governments to join the hunt for tropical disease treatments at its dedicated institute at Tres Cantos, Spain. Many NGOs remain sceptical. Michelle Childs, director of policy and advocacy for Medecins Sans Frontieres, says that in China, GSK charges over $3,000 for the antiretroviral Lamivudine in the absence of generic competition, while in Thailand, by comparison, another pharmaceutical company, Abbott, offers the Lopinavir/Ritonavir co-formulation for $500. And as for reinvesting profits, Catherine Tomlinson of the Treatment Action Campaign says, ‘Wouldn’t it simply be better to slash profits and allow for countries themselves to invest in improving health infrastructure? The GSK argument is circular: We charge so much money so that we can give you some of your own money back!’

The most interesting and radical move, however, is that Witty committed GSK to put any chemicals or processes over which it has intellectual property rights that are relevant to finding drugs for neglected diseases into a ‘patent pool’, so they can be explored by other researchers. Explaining this move, Witty said, ‘I think it’s the first time anybody’s really come out and said we’re prepared to start talking to people about pooling our patents to try to facilitate innovation in areas where, so far, there hasn’t been much progress.’ He went on to say, ‘Some people might be surprised it’s coming from a pharma company. Obviously people see us as very defensive of intellectual property, quite rightly, and we will be, but in this area of neglected diseases we just think this is a place where we can carve out a space and see whether or not we can stimulate a different behaviour.’

On this score, some critics have been cautiously supportive. ‘He is breaking the mould in validating the concept of patent pools’, said the head of Oxfam’s medicines campaign, Rohit Malpani. ‘That has been out there as an idea and no company has done anything about it. It is a big step forward. It is welcome that he is inviting other companies to take this on and have a race to the top instead of a race to the bottom.’

About the blogger

Dr Wayne Visser is the Founder & Director of CSR International and the author of 9 books on CSR, the most recent of which is The Age of Responsibility: CSR 2.0 and the New DNA of Business. He researches, writes, trains and teaches corporate sustainability & responsibility around the world, including at Cambridge University, Magna Carta College, Oxford and La Trobe Graduate Business School, Melbourne.

Source

This is an extract from Chapter 9 of The Age of Responsibility: CSR 2.0 and the New DNA of Business For more information and ongoing updates, follow the The Age of Responsibility Blog

Copyright 2011 Wayne Visser

CSR & Pharmaceuticals: Big Pharma on Trial - Part 1

By Wayne Visser

Let’s take a look at one of the biggest crises the world still faces: HIV/AIDS. According to the November 2009 UNAIDS report, more than 25 million people have died of AIDS since 1981. The number of people living with HIV has risen from around 8 million in 1990 to 33 million today, and is still growing. Around 67% of people living with HIV are in sub-Saharan Africa and Africa has over 14 million AIDS orphans. At the end of 2008, women accounted for 50% of all adults living with HIV worldwide. In developing and transitional countries, 9.5 million people are in immediate need of life-saving AIDS drugs; of these, only 4 million (42%) are receiving the drugs.

The topic of drugs presents a good case study in responsiveness (and the lack thereof). In 2001, Oxfam launched a campaign called ‘Cut the Cost’, challenging the pharmaceutical industry to address responsible drug pricing. In the same year, the Indian pharmaceutical company Cipla cut the annual price of anti-retroviral AIDS drugs to Medecins Sans Frontieres (MSF) to $350, as compared with the global industry standard of $1,000, and the Western market price of $10,400. Cipla also announced its intention to allow the South African government to sell eight of its generic AIDS drugs, the patents for which were held by other companies.

MSF put pressure on the five major pharmaceutical companies involved in the UNAIDS Accelerating Access Initiative to match Cipla’s benchmark. And to some extent, they responded. Merck cut the price of its HIV/AIDS treatments for developing countries, including offering Crixivan at $600 and Stocrin at $500. Pfizer offered to supply antifungal medicine at no charge to HIV/AIDS patients in 50 AIDS stricken countries. Bristol-Myers Squibb announced that it would not prevent generic-drug makers from selling low-cost versions of one of its HIV drugs (Zerit) in Africa. And Glaxo-SmithKline granted a voluntary licence to South African generics producer Aspen, allowing them to share the rights to GSK’s drugs (AZT, 3TC and Combivir) without charge.

So far so good. Apparently the drug companies are quite responsive. Why then, in 2001 (at the same time that they were doing all these good things), did 39 of the largest international pharmaceutical companies take the South African government to court over plans to introduce legislation aimed at easing access to AIDS drugs, arguing that it would infringe their patents and contravene the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement? Justin Forsyth, Oxfam Policy Director, said at the time, ‘This court case demonstrates how powerful drug companies are bullying poor countries just so they can protect their patent rights on lifesaving medicines.’

The pharmaceutical companies quickly realized that they had created a monster. Tens of thousands of people marched in protest all over the world, and 300,000 people from over 130 countries signed a petition against the action. Eventually, following public pressure, as well as pressure from the South African government and the European Parliament, Big Pharma dropped the case. Fanning the flames of public discontent, John le Carr_e’s 2001 book The Constant Gardener and the 2005 film adaptation depicted drug companies as corrupt profiteers. And so began the industry’s PR damage control campaign. ‘This is not about profits and patents’, said John L. McGoldrick, Executive Vice President at Bristol-Myers Squibb, ‘We seek no profits on AIDS drugs in Africa, and we will not let our patents be an obstacle.’

Part 2 to follow soon ...

About the blogger

Dr Wayne Visser is the Founder & Director of CSR International and the author of 9 books on CSR, the most recent of which is The Age of Responsibility: CSR 2.0 and the New DNA of Business. He researches, writes, trains and teaches corporate sustainability & responsibility around the world, including at Cambridge University, Magna Carta College, Oxford and La Trobe Graduate Business School, Melbourne.

Source

This is an extract from Chapter 9 of The Age of Responsibility: CSR 2.0 and the New DNA of Business For more information and ongoing updates, follow the The Age of Responsibility Blog

Copyright 2011 Wayne Visser

Health as a Human Right

I’ve been meaning to write up a few scribbled lines from the interesting lunch session I attended last week entitled ‘health as a human right’ at the Carnegie Council for Ethics in International Affairs. The event focused on how the international community has begun to consider the ‘highest attainable standard of health’ as a fundamental component of the human rights agenda. The discussion touched on a range of ethical issues from the corporate responsibility of pharmaceuticals companies to more concrete matters of policy and law. Indeed, it seems logical to make a short posting on the 60th anniversary of the Universal Declaration of Human Rights, which has deservedly got a fair bit of attention today (even if it's late in NYC!)

The Carnegie Council regularly offers great events and generally invite excellent guests to speak. This time was no exception with a panel featuring Christian Barry (Centre for Applied Philosophy and Public Ethics), Meg Boulware (Baker & McKenzie), Laura Herman (FSG Social Impact Advisors), Maggie Kohn (Merck), Rohit Malpani (Oxfam America), Lisa Oldring (Special Advisor to Mary Robinson). There were some interesting comments and I have very briefly touched upon one useful suggestion made in the text below. Fortunately, the Carnegie Council does a good job of videoing their events - the full discussion can be seen by clicking here: http://www.cceia.org/resources/video/data/000097

Pharmaceuticals companies have come under plenty of scrutiny for their CSR policies and the access to medicine debate has been around for a long time in policy circles (now we even have an index, which came out earlier this year). Responsibilities in this area are grey, as acknowledged at this event by the top CSR Officer at Merck, which is considered a leader in the field. In terms of medicines, their policies are predicated on the principles of availability, quality, access, and affordability. It's the last two aspects that have been a huge bone of contention. On access they have made great strides (such as their policy on patents in Least Developed Counties) but the issue of price continues to be a hot issue, as eloquently highlighted by the Oxfam representative.

One particularly interesting recommendation from the session actually came from Merck. Essentially, the proposition was for stakeholders (donor organizations, governments, pharmaceuticals) to come together to work on a list of principles in terms of a right to health, perhaps working with the Global Reporting Initiative (GRI) to develop a series of indicator in this area for all organizations to work upon. While the GRI guidelines have their critics, I think the process of collaborative action itself is incredibly valuable and a way needs to be found for such work to be taken forward by industry leaders. While much greater consideration from all sides is still required, such an opportunity is too important not to take.