Last week something strange happened. I read some good news. Not "drunken pony rescued from swimming pool" good news, but actual unexpected and potentially world-changing good news. Major pharmaceutical company and historic bastards GlaxoSmithKline are going to drastically reduce drug prices in Least Developed Countries, plough profits back into those nations’ infrastructures, and allow other companies to copy their drugs. Now, the weird thing is that it wasn't particularly widely reported. Does bad news results in greater sales? Does good news not produce catchy headlines? Are major news channels just trying to prolong SAD? Yes, no and maybe. Having found media response majorly lacking, I called Ed Silverman, who until recently ran the go-to pharmaceutical watchdog blog Pharmalot, to ask for his opinion.

In a speech to Harvard Medical School on 13 Feb (Friday 13th - shiiiiiit), GSK CEO Andrew Witty announced that his company would be creating a "Least Developed Country (LDC) Patent Pool for medicines for neglected tropical diseases... allowing others access to develop and produce new products" (this pool doesn’t include HIV drugs). After having received significant bad press from ethical whoopsies such as attempting to patent an offbrand generic antiretroviral in Thailand in 1997 and releasing an anti-depressant that actually promoted suicidal thinking (Seroxat), this seemed like a good PR move.



Naturally, in light of GSK's past actions (and those of the industry on the whole), I want to be sceptical about this announcement. What is the benefit to the bottomline? When most companies are shoring up against the onset of massive reductions in profit, why are they doing this now? PharmaTimes notes, "fourth-quarter financials revealed a 4% decline in pharmaceutical sales... hit again by generic competition".

Ed Silverman (Pharmalot) suggests that “new CEO Andrew Witty is trying to set a tone and get out in front. Glaxo’s image took a beating over the last 18 months with Avandia (diabetes drug alleged to significantly increase risk of heart disease) and so could do with some positive press. Witty has already made himself more visible than his predecessor Jean-Paul Garnier early on with YouTube interviews, and perhaps he’s trying to set himself up as an industry spokesman”.

Of course it benefits their public image - but surely this can't be a major motivation, since they don’t need to be well-liked in a sector where brand awareness is very low. Perhaps they have merely realised that suing generics into oblivion will never be a permanent solution, and that working with these companies is a more lucrative option. Just last year they forged a deal with the largest generics company in the southern hemisphere (Aspen Pharmacare) to brand their products, so that GSK can sell their drugs under their name at inflated prices.



It seems strange that, while in their philanthropic mood, they wouldn’t include HIV treatments in the patent pool, given the huge numbers of lives affected, and the high public profile of the illness. Ed suggests that maybe GSK see it as “an all-or-nothing slippery slope – perhaps they feel they would have to include all of their HIV medications”. If they really want to improve their image and care about the communities they are profiting from, it seems they must have looked at this option, and “if [the noninclusion] is for a financial reason, they should make a public explanation. If they want to be transparent, they should go all the way”.

Witty didn’t stop at patent pooling though – he also announced that GSK “will reduce our prices for patented medicines in the LDCs so that they will be no higher than 25% of the developed world assuming we can cover our cost of goods”, and further that “20% of the profit we make selling medicines in LDCs will be reinvested in infrastructure projects”.

The reduction in pricing is clearly a great step towards helping save lives in poorer countries, but as Médecins Sans Frontières cautiously note, "competition among multiple generic producers is the tried and tested way to drive prices down - by between 95 and 98% since 2000 for the first generation of antiretrovirals."



The apparently magnanimous move to allow other companies to license GSK's medications may be no more than an admission of failure in controlling their own patents in the face of rightfully unsympathetic courts (who ruled in 2003 that a Canadian company could produce generic Paxil and similarly regarding the antibiotic Augmentin in 2002). By bundling the patent announcement in with the price reductions they are creating a 'full package' of aid, thus lessening the likelihood of accusations of tokenism.

And it's fair that they might fear such attacks, given that Witty reassured shareholders in an interview before his speech that the 20 percent reinvestment target amount to only "$1 or $2 million" annually.

The beginning of a media campaign to change public feeling about GSK? A new age of drug companies that care? A bit more good news to stave off recession gloom? Let’s hope so.