GlaxoSmithKlein plan for developing countries backfires

A recent announcement by drug giant GlaxoSmithKlein to spend 20 per cent of its profits from developing country sales on building the health care infrastructure of those same countries, and to sell patented drugs there at a quarter of their market price, sounded quite generous.

At least on the surface.

The plan, however, has not held up to the scrutiny of some of those analyzing it, including The Global Bioethics Blog, which focuses on biotech research in developing countries.

These promises may make GSK look saintly, but the impression largely fades on reflection. 20% of GSK's profits in developing countries does not amount to much. ...

Gestures of philanthropy towards the world's poorer nations, on the part of aggressively profit- seeking pharmaceutical companies, is to be taken with a grain of salt at the best of times. In a down economy, when pharmaceutical companies are merging for their own survival, full-blown skepticism is in order.

The blog cites an editorial in the respected medical journal, The Lancet, and an analysis of the Glaxo plan by the Policy Innovations think tank -- which both point out that because the company makes so little money in poor developing countries (where few can afford its products), 20 per cent of its developing country profits is very little indeed.

... an editorial in the Lancet calculates it as less than 0.1% of GSK's total profits, and the folks at Policy Innovations see this as boiling down to about $50,000 per country, hardly a generous investment in local health infrastructure. Selling patented medicines at a quarter of the usual (bloated) price may not be of much help either to those who live on a few dollars per day. And while giving access to patents sounds nice, the road from possession of patent information to research to marketing is a long and winding road paved by a great deal of money. Who has that kind of money? The big pharmaceutical companies, like GSK. But they won't really invest to create drugs for conditions affecting developing countries because the profit margin would be meagre. We come full circle.

Not everyone, of course, questioning the company's move. New Scientist welcomed it, noting that it at least will spark a debate about how much Big Pharma should do to help people in developing countries.

Oxfam spokesman Rohit Malpani urged other companies to emulate GSK, but would like to see the company free up its anti-HIV medication patents as well. Richard Barker of the Association of the British Pharmaceutical Industry says GSK's stance will spark a debate about "how much further industry can and should go" in promoting global health.