[ 2011-06-06 ]

Drugs firms cut vaccine prices for Third World
Drugs companies must behave “in step with
society” and put people before profits, the head
of one of the world’s biggest pharmaceuticals
businesses warns today.
Andrew Witty, the chief executive of
GlaxoSmithKline (GSK), says that too often the
industry has acted “as though it is detached
from society”, causing a corrosion of public
trust.
Writing in The Times, he sets out a new pricing
structure for a vaccine against diarrhoeal
disease, the second biggest killer of children
under the age of 5 in developing countries, which
will allow it to be sold to the poorest nations
for £1.50 a dose — 5 per cent of its £30
Western market price.
Save the Children described the price-cutting of
the rotavirus vaccine as a landmark that would
potentially save the lives of hundreds of
thousands of children. Patrick Watt, the
charity’s director of development policy, said
that other vaccine producers should be urged to
reduce prices and foster greater competition to
drive down prices even further.
Mr Witty calls for the rest of the pharmaceuticals
industry to follow suit by building commercial
goals around long-term business models that
address the world’s most urgent health needs,
giving people the medicines they require at
affordable prices.
“To be successful in the long term, we have to
operate in a way that is in step with society and
its expectations,” he writes.
Political leaders will meet in London next Monday
to discuss how to raise more than £2.25 billion
for immunisation programmes over the next four
years, and save the lives of an estimated four
million children. David Cameron is due to host the
Global Alliance for Vaccines and Immunisation
(Gavi) conference in his most high-profile
intervention on overseas aid since becoming Prime
Minister. He will set out a substantial extra
government contribution to the fund, which is
likely to anger some critics who question why such
money is being put before the needs of
cash-strapped public services at home.
Today Gavi will also announce several new
commitments from other pharmaceuticals
manufacturers to reduce pricing of vaccines, for a
combination vaccine that protects against five
deadly diseases and jabs against rotavirus and
human papilloma virus, as well as GSK’s
rotavirus pledge.
Andrew Mitchell, the International Development
Secretary, said he wholeheartedly endorsed Mr
Witty’s comments about the need for significant
action from the pharmaceuticals industry, which
was inextricably involved in the target to
vaccinate a quarter of a billion children against
key killer diseases.
“Gavi, all of us who are pledging [money], and
the pharmaceutical industry are locked together in
this,” he said. “I hope that the entire
industry will follow the path down which Andrew
Witty and GSK is blazing a trail.”
Rotavirus, which causes severe diarrhoea, is
estimated to kill more than half a million
children annually, mostly in Africa and Asia. It
is responsible for the hospitalisation of millions
more.
Mr Witty warns that government aid funding alone
will never meet the needs of these people and
describes GSK’s decision to offer the vaccine
Rotarix at a heavily discounted cost as “not a
gimmick or one-off philanthropic gesture [but]
part of a concerted strategy to change our
business model”.
GSK will use some of the profits generated from
drug sales in richer countries to subsidise the
lack of any returns from sales in the poorest
nations, where the £1.50 price will simply cover
the cost of goods and running the production line.
The model works by Gavi agreeing to purchase
significant volumes of drugs over a number of
years — in this case 125 million doses of
Rotarix between now and 2016.
Earlier this year GSK and Pfizer also announced
that they would supply Gavi with pneumonia and
meningitis vaccines at a fraction of their Western
prices. Describing efforts to improve healthcare
in the world’s poorest countries as “a huge
task”, Mr Witty writes: “To do this we can’t
just be a donor. We have to create a better and
more sophisticated model, one that combines
commercial success with long-term sustainable
contributions. This is how we can help improve the
health of people wherever they live.”
Mr Watt added that the position set out by Mr
Witty was essential to the future financial
success of the pharmaceuticals industry, as well
as to advances in global healthcare. “It
shouldn’t just be about philanthropy and
corporate responsibility. Ultimately companies are
going to make the biggest contribution by looking
at their core business model, and that is where
the most important changes must take place.” He
said that industry competition from countries such
as India, China and Brazil made it essential for
established pharmaceutical companies to cut their
prices..
The Bill & Melinda Gates Foundation, which is the
largest donor to Gavi, said the announcements
would enable “a significant step toward ensuring
that children in poor countries have the same
access to life-saving vaccines as children living
in rich countries”.
The Gateses said last night: “We’re
particularly excited about the offers for
rotavirus vaccine because the shock of learning
that more than 500,000 children die from a
preventable disease is what drew us to work in
global health. With these offers, Gavi will be
able to make even greater use of donor commitments
to increase significantly the number of children
it can protect from deadly yet preventable
diseases.”

Source - The Times(UK)

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