Cheap AIDS drugs for poor countries

LONDON, England (CNN) - One of the world's leading pharmaceutical firms has said it plans to cut the cost of its HIV/AIDS drugs in 63 of the world's poorest countries.

GlaxoSmithKline (GSK) said it planned to offer the drugs at cost price to governments, aid agencies and churches in the Least Developed Countries (LDCs) and in all of sub-Saharan Africa.

The industry has been under increasing pressure from charity groups such as Oxfam and Medicins sans Frontieres to make drugs more widely available in countries where people cannot afford Western prices.

GSK said it would also make anti-malarial drugs available at cost price and it was setting up a corporate social responsibility committee chaired by its non-executive chairman, Richard Sykes.

The committee, made up of non-executive directors of GSK, will advise on social issues and keep the company's policy on health care in the developing world under review.

In an era when ethical issues are rising up the corporate agenda, institutional investors, as well as pressure groups, have urged GSK to take a more pro-active stance on the issue.

GSK's chief executive Jean Pierre Garnier said the measures recognised the "ethical imperative" on the pharmaceutical industry to do more to tackle the problems faced by developing countries.

Keeping up the pressure

Oxfam, which has spearheaded a campaign to see the price of life-saving medicines cut in poor countries, welcomed GSK's decision, saying the move set a new benchmark on drug pricing.

"It is as much as we could reasonably expect of one company on their prices," said Oxfam senior policy adviser Sophia Tickell.

However, the charity also kept up the pressure by calling on the firm to take a lead in pushing for change to world patent regulations.

QUOTE "It is as much as we could reasonably expect of one company on their prices" Oxfam senior policy adviser Sophia Tickell

"GSK continues to maintain that World Trade Organization patent rules are not an issue in access to drugs in poor countries. Oxfam research shows that they in fact lead to high drug prices way beyond the reach of millions of people in the world's poorest countries," said Tickell.

World patent rules will be discussed at an unprecedented meeting of World Trade Organization members in Geneva on June 20.

Oxfam spokesman Michael Grainger told CNN that although GSK's policy decision could go a long way in terms of the price of drugs, the company would need to take the rest of the industry with it.

"Without a fundamental change in patent rules, countries would continue to depend on the whim of company policy," he said.

While making concessions on a wide range of drugs, GSK insisted that the pharmaceutical industry could not be held responsible on its own for delivering healthcare in the developing world.

GSK's Garnier said the industry could "play an important role" but it did "not have the mandate, expertise or resources" to act unilaterally.

He called on all sectors of society including governments, international agencies and the private sector, to "work together in new kinds of partnerships, backed by significant funding."

He also said he supported U.N. Secretary-General Kofi Annan's call for a large-scale global fund to fight AIDS and other disease.

Image problems

The measures announced by GSK may go someway to improving the image of the industry which has been scarred in recent months, for example by the court case against the South African government when it tried to stop it importing cheaper generic versions of patented drugs.

The case, which involved 39 pharmaceutical companies, including GSK, proved to be one of the worst corporate PR disasters.

South Africa, with more HIV and AIDS sufferers than anywhere else in the world, proved to be the wrong country to take to court over the issue of intellectual property rights.

The case was dropped, but not before the international opinion had been left with the impression that the industry was more concerned with protecting its patents than in the health crisis in developing countries.