Ethical Performance
inside intelligence for responsible business


drug companies extend help on Aids

April 2001

Two of the world’s largest pharmaceutical companies have announced measures to provide cheaper Aids drugs to the developing world, prior to an important court case on drug patenting that begins in South Africa this month.

GlaxoSmithKline and Merck say the new measures are intended to set an example to other pharmaceutical firms. The industry faces a reputational challenge over calls to improve access to life-saving drugs in developing countries.

Glaxo and Merck will allow non-profit agencies to gain access to Aids drugs at below market prices, under the Accelerated Access (AA) programme. This allows the agencies to buy an individual day’s supply of drugs at $2 (£1.40), rather than the usual $16 (£11). This facility has previously been available only to African governments.

US-based Merck is also providing two anti-Aids drugs, Crixivan and Stocrin, at cost price to sub-Saharan African countries, and Glaxo has announced a major review of its approach to pricing and patent enforcement. The review is due to finish in June.

Bristol Myers Squibb, one of three other companies that takes part in the AA programme, has said it will provide drugs to non-profit agencies. Ingelheim and Roche may soon follow suit.

Pressure on pharmaceutical companies dramatically increased over the past month with the launch of a ‘Cut the Cost’ campaign by Oxfam and a court case in Pretoria in which 39 pharmaceutical companies are challenging the South African government’s decision to allow cheap copies of patented Aids drugs to be sold in the country.

The case, which spurred a global day of action organised by campaigning groups, was adjourned after one day last month, but will restart on 18 April.

Although Oxfam has called on the companies to drop their legal challenge, Glaxo chief executive Jean Paul Garnier said they would continue to protect their patents.

He said 95 per cent of drugs considered essential by the World Health organization have lost their patent, and that even if drugs were free to poor countries, they would be unlikely to reach those in need due to a lack of trained health professionals, poor infrastructure and corruption.

Only four governments - in Senegal, Rwanda, Uganda and Ivory Coast - have so far taken up the AA offer, although 30 others have expressed interest. Garnier said that opening up the AA programme was an attempt to be more pro-active in trying to get drugs distributed.

World Trade organization rules protect patents for 20 years. Oxfam says exclusive marketing rights created by the patents are driving up prices for treatments of major diseases such as Aids, respiratory tract infections, and childhood diarrhoea.

Oxfam policy adviser Sophia Tickell said: ‘We accept the need for patents, both in terms of stimulating innovation and to recoup investment costs. But there shouldn’t be blanket patent protection across the globe, and drugs should be priced according to the ability to pay’.

Tickell said the Oxfam campaign was mainly targeting Glaxo because it was the largest pharmaceutical company, because Oxfam’s own pension fund was partly invested in the company, and because ‘the chief executive has already made some commitments in this area’.

She said campaigners hoped Glaxo would ‘play a leadership role’. They would seek meetings with the company rather than advocate a boycott of products. Oxfam wants Glaxo to draw up ‘a clear policy’ to maximize affordable access to drugs in developing countries and to be more flexible when enforcing patent rights in those countries.

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