Drug Giant Pledges Cheap Medicine For World's Poor

bmsleight writes in with a Guardian piece on the decision of the world's second biggest pharmaceutical company, GlaxoSmithKline, to radically shift its attitude towards providing cheap drugs to millions of people in the developing world. "[The new CEO] said that GSK will... cut its prices for all drugs in the 50 least developed countries to no more than 25% of the levels in the UK and US — and less if possible — and make drugs more affordable in middle-income countries such as Brazil and India; put any chemicals or processes over which it has intellectual property rights that are relevant to finding drugs for neglected diseases into a 'patent pool,' so they can be explored by other researchers; and reinvest 20% of any profits it makes in the least developed countries in hospitals, clinics, and staff."

Comments

It's called market segmentation

[wisty]

It's not generous, it's just good sales. Maybe greed is good though.

Re:It's called market segmentation

[dkleinsc]

Also, since we're talking about drugs here, the phrase "first hit is free" comes readily to mind.

Another factor here is that drug companies want Latin America in particular to develop medical systems dependent on their drugs, rather than trying to replicate the Cuban model which doesn't rely on US drug companies and still manages to get pretty good results. It's sort of like what Intel and MS did to the OLPC project.

Re:It's called market segmentation

[crmarvin42]

So, their bastards for charging more than people can afford for life saving medicine that now only costs cents to manufacture (having already spent the millions on R&D), but they are also bastards when they reduce the cost, because they'll get everyone hooked on their drugs.

This strikes me as a Win/Win type situation for BlackHat conspiracy folks.

Re:It's called market segmentation

[dkleinsc]

Does the Cuban model respect the patents on the pills?

Their health care system is geared towards reducing the need for pills: general practitioners in Cuba focus a lot of their efforts on preventative care, and also receive extensive training in herbal, nutritional, and behavioral solutions to health problems. This was started in large part out of necessity: Cuba simply can't afford a lot of pills, and hasn't had significant access to US goods since 1959.

So whether they respect the patent isn't really important, because they can't get the pill to copy in the first place. The reason the Cuban system is particularly relevant to discussions of Latin American health care is that many countries (notably Bolivia, Venezuela, and Brazil) have all made efforts to copy Cuba's methods.

Re:It's called market segmentation

[hairyfeet]

Actually many of the drugs are found by universities using federal dollars and THEN the drug companies buy the rights and bend you over. Allow me to introduce you to a drug I am familiar with as I am on it-Remicade, which as you can see on the Wiki was developed at NY school of medicine. Do you know how much they charge for 8 treatments(1 year) of the stuff? $67,898. That's right, you could shoot pure platinum into your veins for cheaper.

And it isn't like it only treats some super rare condition either. It has been approved and works wonders on psoriasis, Crohn's disease, ankylosing spondylitis, psoriatic arthritis, rheumatoid arthritis, sarcoidosis and ulcerative colitis. Wow, that's a lot of folks. I wonder how many are suffering now because they can't actually get it? I would LOVE to see the profit margins on the drug, because I'm guessing by the tiny little vials they are probably making in the 2000-4000% profit range. Because you certainly don't get much for your $67k.

but if you look up the numbers the biggest expense of the major drug companies is NOT R&D, it is advertising. All those irritating ads pushing you to tell your doctor you want their pill o' the week. I bet the profit margins on THOSE drugs are beyond insane which is why they push them so hard. But if we don't get a handle on the multi $$$$% profits the drug companies are making we are ALL going to lose, as we simply can't pay for the drugs for ourselves as well as the "charity" they show the third world (and make up the difference with our insurance). The gravy train is coming to an end and the economy ain't going to be getting better anything soon folks. I actually know folks living by candlelight because the choice was paying their rent or their lights. So the drug companies better learn to live on the margins like the rest of us unless they want us to go to nationalized health care.

Re:It's called market segmentation

[Daemonik]

(Also, can you provide a citation for the allegation that Marketing outweighs R&D? Although I agree with your sentiment, most marketing is directed at physicians in the form of educational materials, rather than patients)

http://www.sciencedaily.com/releases/2008/01/080105140107.htm

Marketing is double the cost of research. That probably does not also include lobbying fees

http://en.wikipedia.org/wiki/Pharmaceutical_lobby

The top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization, lobbied on at least 1,600 pieces of legislation between 1998 and 2004. According to the non-partisan Center for Responsive Politics, pharmaceutical companies spent $900 million on lobbying between 1998 and 2005, more than any other industry. During the same period, they donated $89.9 million to federal candidates and political parties, giving approximately three times as much to Republicans as to Democrats.[1] According to the Center for Public Integrity, from January 2005 through June 2006 alone, the pharmaceutical industry spent approximately $182 million on Federal lobbying.[2] The industry has 1,274 registered lobbyists in Washington D.C. [3]

Dude. What about the World's rich?

[BadAnalogyGuy]

Consider that just because a nation's average income is relatively high, it does not follow that everyone in that country is able to buy the products at the higher price. Why should people who had the dumb luck to be born in some shithole country be blessed with lower-priced medicine?

That's not social justice. It's social prejudice.

Re:Dude. What about the World's rich?

[easyTree]

Social prejudice is this year's racial prejudice.

Let ppl make a ham-fisted attempt at atoning for past abuses will ya?, jeez ;-)

Re:Dude. What about the World's rich?

[jonaskoelker]

Why should people who had the dumb luck to be born in some shithole country be blessed with lower-priced medicine?

Because in Soviet Russia^W^W^H Capitalist America, you can increase profits that way. And that's encouraged. In a market where you're free to not trade, any trade you do is good for the people who trade (according to simplistic Econ 101 principles, and discounting negative externalities, and ...).

Whether selling cheap medicine in poor countries is a good thing in practice is another question.

That's an attempt at an answer to your question. I want to add to that the following:

I find it strange that you say people are lucky to live in (er, be born in) a shithole; the two don't add up. Even if you isolate their luck to the case of medicine prices, what they have to pay might upset their budget more (or less, could as well be) than you paying what you have to pay where you live.

Spending $AMOUNT $CURRENCY on medicine means you forgo the option of spending $AMOUNT $CURRENCY on something else. How bad that is for you depend on what else you could have gotten and how much you want it. That varies between cultures depending on their shitholiness.

Re:Dude. What about the World's rich?

[jellomizer]

It is a case of supply vs. demand. It is just business. Each country or area has a different supply vs. demand curve. If the average population makes 30k a year there will be a different curve then people living on 10k a year. Getting the right balance will maximize profits and matching pricing for the right areas is more profitable.

This happens in all sectors, say you are traveling around the world and you give the bell boy a 5 dollar tip. In the US that will like $5 for them (Deli-Meat for a week). In the country where the average is about $10k that is a $15 (Good cuts for meat for dinner about 2 days and the deli-meat) for the really poor countries where people make $1k a year. That would be close to a $150 tip (Food for a family for a week or 2).

Re:Dude. What about the World's rich?

[MadMidnightBomber]

Well, in the UK we have evil socialised medicine, so we don't have to pay the full cost of our medically necessary drugs. (There is a small, flat charge per prescription)

Re:Dude. What about the World's rich?

[Anonymous Coward]

Of course it's much better to pay twice as much for private healthcare, then die anyway because your uninsured neighbour infects you with a nasty disease they left untreated. Or the uninsured bus driver with the untreated dodgy knee wipes out your car.
News: You pay for other people's ill health one way or another. If they're too ill to work, they're not paying taxes - so you're paying more.

Still, no point in trying to explain civilization to retards eh?

Re:Dude. What about the World's rich?

[Ginger Unicorn]

yeah, along with all those people born with or stricken down with ailments over which they have no control are just parasitic scum that should be left to die in a ditch lest they put too much of a strain on the taxpayer.

Re:Dude. What about the World's rich?

[penix1]

That would be all well and good but they aren't atoning for shit here. Let me count the ways for you:

1. Richer countries like the US and UK are subsidizing this drug program. You don't honestly think GSK is going to give up its profits now do you...

2. They are putting some of their patents in a "patent pool", whatever that means, instead of doing the real "right thing" and releasing those patents to the public domain. Torpedo patents anyone...

3. This isn't an attempt to "do good" more than it is an attempt to stop countries from ignoring their patents and developing generics on their own. A little profit is better than no profit in their eyes. Besides, as 1 above suggests, they will make it up off the richer countries.

This is a multi-billion dollar a year industry we are talking about here. They have no conscience and no morals. Profit is their only motivator. No company does anything out of the goodness of their heart unless it will lead to greater profits and/or market dominance. This is doubly so with the drug industry.

Re:Dude. What about the World's rich?

[Nazlfrag]

I'm not from the UK, there they have a comprehensive national insurance policy. Still, when I look at the USA who tax their citizens at a rate of 2.9% for medical cover that covers only the disabled and elderly (>65), and compare that to the 1.5% we pay here in Australia that gets comprehensive health cover for every citizen, I just cannot comprehend the mentality that a state run hospital service is somehow less necessary to a modern functioning society than a state run fire service or police service. They are all vital to a functional stable society, and it is in the best interests of every citizen to have full coverage for all.

Re:Dude. What about the World's rich?

[D Ninja]

Why should people who had the dumb luck to be born in some shithole country be blessed with lower-priced medicine?

This statement boggles my mind.

Sure, the people born in the war-torn, poverty-ridden, disease-ridden, crime-laden hell hole of a country is getting cheaper medicine. Of course, then they're also dealing with war, heavy poverty, disease and crime.

What Americans fail to understand is that, even the most poor off and worst person in America is (many times) still doing better than some of "rich" people in other countries.

Of course, if you want to go live in said countries so you can get cheaper medicine, be my guest. You might learn a thing or two.

Re:Dude. What about the World's rich?

[penix1]

And how do they plan to stop 1st world countries from importing drugs from their developing brethren?

By introducing legislation banning it. How else? You don't think they have paid out those millions in bribes....er...Campaign contributions for nothing do you? You don't think they hired that army of lobbyists for the good of the people do you?

Re:Dude. What about the World's rich?

[nbates]

But... you don't understand...

If it is against the free market rules, then it is evil, and we must find an oversimplified reason to dismiss it.

So instead of saying "poor people in rich countries should get simmilar treatment" we say "let those who can't pay die, maybe that will teach them not to be poor"

Re:Dude. What about the World's rich?

[spun]

You are forgetting the control aspect. If we socialize medicine, people won't be nearly as afraid of losing their jobs, and might not put up with as much crap. Deep in their hearts, every rich person knows this. Socialized medicine would erode their control. It's not even about money, per se. It's about being able to lord it over others, and them not being able to do anything about it. It's not a planned conspiracy, it's a dark little secret every rich person acts on without even acknowledging that is what they are doing.

Re:Dude. What about the World's rich?

[thePowerOfGrayskull]

No company does anything out of the goodness of their heart unless it will lead to greater profits and/or market dominance.

And that is why your generation sucks balls. We hate you and want you to hurry up and die. The younger generations seem to have a little heart. And yes, I run a company, and yes, we have a heart.

You run a private company, not a public corporation, yes? Companies owned by individuals/small groups have no problem in the "heart" department.

Re:Dude. What about the World's rich?

[cirby]

1. Richer countries like the US and UK are subsidizing this drug program. You don't honestly think GSK is going to give up its profits now do you...

They've been doing this sort of thing for decades, and YES, they've been giving up profits.

2. They are putting some of their patents in a "patent pool", whatever that means, instead of doing the real "right thing" and releasing those patents to the public domain. Torpedo patents anyone...

It keeps fly-by-night Third World companies from producing crappy, ineffective versions of the real products. It also reduces (by a large amount) the chance that they'll be sued by some idiot because one of those nobody companies comes out with a harmful version of the drug that ends up killing or injuring a lot of people (yes, that happens, and when it does, there will be people just like you complaining because those Big Pharma folks should have done something).

3. This isn't an attempt to "do good" more than it is an attempt to stop countries from ignoring their patents and developing generics on their own. A little profit is better than no profit in their eyes. Besides, as 1 above suggests, they will make it up off the richer countries.

This whole paragraph is just plain old uninformed bashing of a whole industry, with no proof. I've worked with pretty much all of the big pharmaceutical companies, and they've been doing good of this sort for a long time, selling good medicines to people all over the world - and paying for it with profits made from the rich countries. The money has to come from somewhere. IF they give all of their profits away, NOBODY CAN AFFORD TO DO THE RESEARCH.

This is a multi-billion dollar a year industry we are talking about here. ...creating drugs which literally cost billions of dollars to create. For every drug that makes it to market, there are THOUSANDS of compounds that have to be investigated. Out of those thousands, there are hundreds that take more research to find out if they have obvious harmful side effects. Of those hundreds, there are dozens that may work. When you get down to five or six candidates, you have to spend millions upon millions of dollars to see if they're effective and safe. Then you have to figure out if you can make enough of the stuff, in pure enough form, to be cost-effective. Then (because the patent term has mostly run out while you were doing all of this) you have to sell the new drugs for a lot of money, for a very few years, and hope that it pays for itself before some OTHER company comes out with something similar for half the price, and before the patent runs out.

They have no conscience and no morals. Profit is their only motivator. No company does anything out of the goodness of their heart unless it will lead to greater profits and/or market dominance. This is doubly so with the drug industry.

You really don't know anything about these guys, except what you see in bad Hollywood productions.

I've had the privilege to sit in rooms with hundreds of pharmaceutical employees, from the lowest salesmen to the head of the company, watching dozens of people crying their eyes out because they came out with a new, better treatment for AIDS that would save lives. No, they weren't crying because they were going to make money (the product wasn't going to be that profitable), they were celebrating because they DO GOOD THINGS.

I've listened to CEOs talk, off-the-record, with their top people, happily bragging about a new program to get free drugs to poor people (no, not that "first taste" BS, but long-term free treatment for many hundreds or thousands of people, with no set end date - it's been going on for a long time, too. The under-the-table "free samples for life" thing has been around for years, they just made it official and expanded it).

If you want to see someone with no conscience and no morals, look in a mirror. It takes that sort of person to trash people when you don't know anything about them or about what they actually do for a living - or why they do it.

Re:Dude. What about the World's rich?

[Marble68]

Score 5 for Interesting as in as interesting as a train wreck. That has to be the most short sighted,ignorant statement I've read on /. in a while. Do you *seriously* think that the rich, who you obviously consider evil, wouldn't love the fact they didn't have to provide benefits in order to be competitive in the job market? Your argument only holds water if the individuals in question have no individual freedoms.

Re:Dude. What about the World's rich?

[BarefootClown]

No company does anything out of the goodness of their heart unless it will lead to greater profits and/or market dominance. This is doubly so with the drug industry.

Remind me again where they get the money to do research and development?

What's that? You say the profit on sales of existing drugs funds research into future drugs? And that if companies stopped profiting from previous developments, future advances would stagnate?

Re:Dude. What about the World's rich?

[sac13]

Citizens don't control corporations, but we do control our government.

Really? So, I can blame you for the Iraq war? I can blame you for Guantanamo (which still isn't closed by the way)?

Citizens don't control our government. The mob (and I'm not talking about the Italian guys with the nice suits) does. The corporate lobbyists and mass media control our government. They (the government, lobbyists and media) allow us to think we control it, but don't fool yourself.

And as for corporations, we might not control them, which could be debatable, but they can't use deadly force on us legally. The government can. The lesser of two evils is still evil, but I'd gladly pick the one that can't take my property, freedom or life legally.

We don't have to be afraid of 'losing our government,' because no one but US can take it away from US. I'm not sure I'm following your logic. Could you try to explain it in a little more depth?

We use that term a little differently than other parts of the world. That's how I'm using it here. In parlimentary systems, a party is elected and then it forms the government. We elect people who are members of a party. At least, that's what we claim we do. Most people go in and check the names that have their chosen party associated with them.

So, when I say the purpose is to make people afraid of losing their government, I mean losing the government of the party in control. You've got fearmongering and propaganda on both sides in the US that feeds this. Health care is just another ball in the game they play. Giving more of it to the government (the US government already pays for ~45% of health care costs in the US) just gives the parties another tool to manipulate us with.

And could you give an example of a system that would, in your opinion, give people a guarantee of access to health care?

People have guaranteed access now. But, that's not what you're asking. You're asking for a system that guarantees complete care for anyone without concern for costs.

First, I'm not aware of any system that can guarantee anything. The only guarantee I'm aware of with life is death.

But, I digress...

The problem with the current system is that the costs are outrageous. That's why people can't afford basic care. That's why everyone needs some sort of insurance. And, that is where you find the root of the problem.

Insurance, in health care, is not insurance at all. It's a health payment plan. Real insurance is supposed to insure you against an unexpected loss. Annual check-ups, birth control pills and Viagra are not unexpected. You should pay for those out of your pocket.

Ahh, but they're too expensive you say. Why? The reason is that the insurance companies long ago made it their mission to change their product (which hardly anyone bought by the way) so that it was involved with every aspect of the system. And, so, they pushed it with companies to use as a cheap way to offer compensation for employees. As more and more people joined the program, they began expanding "coverage" until they covered everything.

The problem is, with anything that you separate the driver of the cost from the cost itself, the laws of supply and demand begin to break down. Since care is free, people start going to the doctor for splinters and stubbed toes. So, the insurance companies decided to control the costs. They hired their own doctors. The hired people to process and review claims. They started to require things to be authorized to make sure people were only doing things that they really "needed" to have done. Essentially, they implemented rationing. They also raised their premiums on the other side of the equation.

On the provider side, the doctors had to hire people who were specialists in insurance. They had to hire people to process claims. They had to make sure they complied and followed each companies processes and procedur

Re:Dude. What about the World's rich?

[sac13]

If we turned it into a government mess, we would stand a better chance of controlling the costs and cutting down the bureaucracy than we do now. I agree that the insane overhead is the real problem. But the free market has proven itself incapable of removing insane overhead. Every niche, no matter how useless to society as a whole, is exploited and defended. Sure, government protects its entrenched interests too. But this won't be an entrenched interest. So in the process of publicizing health care, we can destroy the current bureaucracy, and with a tiny bit of clever legislation, as well as ongoing citizen oversight, we can keep it from becoming an entrenched government bureaucracy.

Can you name a single government program that has controlled costs and cut down on bureaucracy? It doesn't happen. And health care is certainly not an area where it will happen... at least the way the people want it. The cost reductions come only from rationing, not bureaucratic cuts. To control the costs, you'll have to wade through a bureaucratic mess just to get basic care.

Sure, they could mandate the price of things, but that just means fewer people will go into medicine. We're already experiencing shortages of nurses and some types of doctors because talented people would rather do something else that doesn't require the level of b.s. that has to be dealt with in medicine. So, then you get even more rationing and lower quality of care.

You can't exactly blame the free market for the health care mess... at least the medical side of it. Sure, "insurance" has done more than it's part to screw things up, but that was because it changed the market from a free one to a regulated one. It's just regulated by insurance rather than government. Of course, it's also not free because the government already pays nearly half of all health care costs in the US. We already have a government system. And, it hasn't improved things.

The only way to make things affordable is to destroy the bureaucracy. Government only creates bureaucracy. It never even reduces it.

I can be open to a government provided OPTION for catastrophic care insurance for those that can't afford it. I can even be open to government subsidized primary care for those needing assistance. But, if we continue to allow primary care to be managed by bureaucracy, whether private or government, rather than by patients and doctors themselves, then the costs will grow, the bureaucracy will grow and the mess will only get bigger.

So, instead of 4x overpriced...

[Guspaz]

Aren't drugs already like 50% in Canada? So wouldn't a more meaningful gesture be to sell drugs for 25% of the price in Canada?

Three-quarters-off a $200 prescription is still $50. Not something that people living on a dollar or two a day can afford.

Re:So, instead of 4x overpriced...

[wisty]

Well Canada is not *that* developing.

Note the double standard

[east coast]

It's funny how if people complain about problems with the latest ATI video card being 600 dollars we hear the peanut gallery mock about early adopters but when people complain about the same thing involving drugs we hear that it's nothing but greed on the manufacturers part.

Drugs cost a ton to do R&D on. Let's be at least a little sympathetic to the plight of manufacturers trying to gain back their costs involved in bringing you the latest cures.

Re:Note the double standard

[Anonymous Coward]

Medicine isn't some impulse buy of a newfangled gadget. People live and die by their ability to acquire it.

Re:Note the double standard

[Anonymous Coward]

That is utter nonsense. A large number of drugs created now days are simply older drugs that are slightly changed near the end of their patent life so the drug companies can basically get a new patent on an old drug.

I think a good example of this is Nexium. http://en.wikipedia.org/wiki/Esomeprazole#Controversy

Another good example is the antidepressant Lexapro which is just the active isomer of Celexa.

Yes, some drugs do cost an absolutely massive amount of money to develop but most drug companies are heading towards the cheaper option of extending their patents rather then creating anything new that could benefit society.

Re:Note the double standard

[jellie]

Yes, R&D costs are very high. But a significant portion of the research is sponsored by governments, not necessarily by drug manufacturers. Plus, it's hard to be sympathetic when drug manufacturers spend more money on marketing than on R&D. They also have one of the largest profit margins.

It's a little unfair to be comparing the costs of drugs and of graphics cards. One is possibly a matter of life and death. And, in an economy in which every major industry is suffering, healthcare costs continue to rise.

Re:Note the double standard

[db32]

Yeah! This is only possible because Starbucks has been lowering its coffee prices. The 40-60% they spend on marketing has dropped significantly since the truckloads of crap they buy docs has gotten cheaper in the failing economy. I will be a little sympathetic when their research costs more than the bribery they engage in. I will be a little sympathetic when they quit "modifying" drugs to get an extra 2% effectiveness on some minimal behavior of a drug to get a new patent for it so they can charge exhorbant prices over the previous version that can now be made in generic form for pennies. I will be a little sympathetic when they quit buying political figures to push for mandatory vaccinations of school girls at $360 a pop when even one of they key researches of the vaccine says it is not meant for girls that young and could actually be harmful.

I mean seriously...let's all feel sorry for the serial killer that has to dig yet another hole...digging holes is hard work after all. Right now these companies are facing big problems in these countries because those governments are invalidating their patents right now. These companies want so much money that the peopel cannot afford that the people's governments have said "Fuck off, we will make our own generics". I suspect this "generous" price drop has more to do with putting political/economic pressure on these countries to enforce patents than it does some generous streak.

Re:Note the double standard

[plasmacutter]

It's funny how if people complain about problems with the latest ATI video card being 600 dollars we hear the peanut gallery mock about early adopters but when people complain about the same thing involving drugs we hear that it's nothing but greed on the manufacturers part.

You don't suffer in horrible agony, become debilitated and lose your job, family, or sanity, or die when you don't get a video card.

Additionally, most R&D today is done in federally funded universities.

Funny how the anti-socialized medicine crowd are all over it when it comes to helping main street but its perfectly fine to socialize the R&D for these companies, then hand them the patents.

Re:Note the double standard

[drinkypoo]

I will be a little sympathetic when they quit "modifying" drugs to get an extra 2% effectiveness on some minimal behavior of a drug to get a new patent for it so they can charge exhorbant prices over the previous version that can now be made in generic form for pennies

it's actually much worse than that. the FDA does NOT have a standard that says that a new drug has to even be as effective as the drug it replaces. And if the drug is substantially similar to the drug it is replacing, it does not even have to be subjected to a trial. Big Pharma continually replaces drugs with less effective drugs with unknown side effects, then makes claims that this is the best new thing even though those claims are completely unsubstantiated, in order to discredit the old drug which has gone generic and may actually be more effective than the new drug - nobody actually knows until the drug hits the market and either is more or less effective, starts killing people, whatever... because no tests whatsoever have actually been done.

When you add to this the drug reps and doctors' collaboration on discrediting the old drugs and prescribing you the new drugs, which results in both of them getting cash bonuses, you can see that the system is not set up to help people, but just to make money at any human cost.

Even social services are used as a means to push the agendas of Big Pharma. For example, the California state health plan "Medi-Cal" (and its relative CMSP) will not cover many older, effective drugs any more. Why not? They're readily available in generic form. Medi-Cal will also only pay for you to have silver fillings, regardless of cost, even though they are backed with Mercury and that mercury is known to leech out of your teeth throughout the course of your life. In fact, hot beverages are known to cause the release of mercury vapors. Time for my morning coffee on top of my eleven silver fillings!

Re:Note the double standard

[ColdWetDog]

You don't suffer in horrible agony, become debilitated and lose your job, family, or sanity, or die when you don't get a video card.

I've seen some posts in gamer's forums that don't jibe with that statement.

obvious why ...

[tyroneking]

from the article: "although they worry that it may undermine the generics industry which currently supplies the cheapest drugs in poor countries"

Re:obvious why ...

[Assoupis]

That is the only reason why they do it: generic medecine spread through africa and south america, and they want to get their market back. This operation is a desperate attempt to make more profit, as they are a corporation, which mean they want to make the most for the shareholders.

Real compassion would be to drop the patents on aids medecine to help africa, just as the WHO propose (http://www.aegis.com/NEWS/AFP/2001/AF0103B8.html).

Re:Mail order

[johnsie]

The Nigerians are already working on it. In the next few days you should receive an email telling you how to transfer the money.

Hold the plaudits, self-interest is driving this

[Bearhouse]

FTA: "Campaigners privately say the move is remarkable, although they worry that it may undermine the generics industry which currently supplies the cheapest drugs in poor countries."

Exactly. Big pharma is in big trouble - blockbuster drugs going off patent, no new ones coming online, Govs. getting more aggressive in fixing prices. So, this is a smart move. While they still can, they can use the one advantage they still have - their size - to buy/crush the small 'generics' producers out.

Still, whatever the underlying motivation, it's encouraging to see big pharma at last getting more involved with the poorer nations of the world, which have been scandalously ignored.

They actually don't have any option

[agoliveira]

Of course they are not doing it from the kindness of their hearts. It's a matter of damage control. A country (any country) can break the patents and start producing any drug in case of need if a commercial arrangement can't be reached with the patent holder so, if they don't provide cheaper drugs, they will lose the whole deal.

TOTAL BS

[WindBourne]

The reason it is so high in places like China and India is because they have their money FIXED against ours and designed to pull the jobs away from the west. That causes high import prices. NOW, by lowering the price ARTIFICIALLY, and most likely moving the manufacturing lines to these countries, they kill their own future as well as those of us who did the RD in the first place. The fact that companies would do this is abhorrent. Now, we need to be allowed to re-import these drugs BACK to the west at the MUCH LOWER costs and kill these companies profits.

Re:TOTAL BS

[Magnus Pym]

Not that I am a fan of outsourcing, but India's Rupee is not fixed, its value changes all the time against the dollar. The Chinese Yuan is, however, fixed.

Magnus

The Plan

[BTWR]

Step 1. Go to so-called "poor country."
Step 2. Buy 10,000 units of drug X at 25% of its cost in the US/Canada/Europe.
Step 3. Sell drug X in US/Canada/Europe at 50% of its normal Drug X cost (i.e. at twice the price you paid), advertising your pharmacy as having the best prices in the country.
Step 4. (Just do step 3 a lot)
Step 5. Profit!

the first tablet

[spectrokid]

Remember that in pharma, the first tablet you press costs a gazillion dollar, the second one 1 cent. If you are in a country where you can ten-double sales by slashing 75% of the price, it is still a smart move.

Re:the first tablet

[OeLeWaPpErKe]

Of course, such an arrangement is only possible if people respect the "licence" (contract that is a prerequisite of the sale) of the pills.

That contract is going to specify that export to richer countries is not permitted.

Suppose this after-sale contract were to be ruled void (which is quite possibly the correct way for a judge to rule given current law), and import allowed, the pharma "giant" will be competing against itself, resulting in massive losses.

Those massive losses, that stem from not respecting the "licence" of the pills, will either prevent the pharma company from offering those pills, or they will kill the company.

Great initiative ! I truly hope it will last, but I fear for it's viability.

A company acts precisely as a company should...

[Anonymous Coward]

And we pillory it?

It may well end up increasing GSK's bottom line, but it will also bring needed drugs at reduced prices to people who may not otherwise be able to acquire them.

Also in the current climate of corporate idiocy isn't it rather refreshing to see a major corporation do something very smart and provide social benefits at the same time?

No you guys are right, let's stick it to 'em!

not that big a deal

[confused one]

While one might like to think they're purpose is wholly based on charity, it's not that simple. Look, They have to offer the drugs at a lower price in third world economies if they want to sell them there. Also, selling drugs cheap in developing countries has been shown to provide long term returns for the companies (once the economy of the developing country grows into a functional first world economy, the drug manufacturer will already have a foot-hold).

And it's easy enough to meet their price of 25% of US and UK prices statement, by setting the US and UK price high enough.

I'm not being cynical. I'm being a realist who's read some history.

Re: good sales and goodwill

[macraig]

It's a close cousin to the ever-popular "going green" announcements and product releases. My current favorite for that B.S. is Johnson&Johnson, "a family [owned] company". Then there's "antibacterial" and antimicrobial products.

All of this can perhaps be filed under the heading of Deliberate Mis-Education. Big Pharma is... wait for it... LE-GEN-DARY for that, including even mis-educating general practitioners as well as consumers. Big Pharma would like the world to completely forget that virtually all of its products are DERIVATIVE of something already found in nature, and from which there was usually already a NON-PATENTABLE folk remedy that accomplishes much if not all of what their patented derivatives might do.

Ain't it amazing the vast conspiratorial evil that people can do when they assemble themselves into an upside-down tree with the biggest FUD-makers at the top and everyone else just doing what they're told no-questions-asked?

don't use normal logic all the time. get to know.

[Caue]

sigh. i'm brazilian and I know that that means. Don't use your market logics on this one. There is a market of "generic drugs" here; we basically rip off the main components of the formula, the active principle, and rename it. It's funded by the governament and sometimes 90% cheaper than imported drugs. I used to be neighbours to the owner of one of these labs that made generics; reaaaally rich guy (go figure) even so, Brazil is today a world reference in AIDS treatment and we have the best govt. coverage for it (US health system is really bellow us in this, but only this) so there you go economy in a nutshell

Johnson != Johnson

[tepples]

My current favorite for that B.S. is Johnson&Johnson, "a family [owned] company".

I've never heard JNJ referred to as a family company. Are you confusing it with SC Johnson, the company that makes Ziploc, Windex, and Scrubbing Bubbles products?

Re:Johnson != Johnson

[tepples]

Their TV commercials (used to?) end with the statement "Johnson and Johnson: A family company".

Did it sound like the end of this commercial? If so, that's SCJ, not JNJ.

Black Market Opportunity

[genoese]

Human nature being what it is, this is an excellent opportunity for black market corruption -- drug company sells to developing country. Corrupt elements in developing country sell back to corrupt black marketeers who then resell in 'rich' countries to corrupt vendors for reduced prices and still make huge profits.
And still the people who need the drugs don't get them, but maybe some actually will, and that's a good thing.

Re:You change your health system first

[Guspaz]

Drugs are not sold by hospitals. Drugs in hospitals are free. For prescriptions, people buy their drugs from a pharmacist. The province isn't the one purchasing those. Pricing has nothing to do with the province.

In fact, prices in Canada are controlled by a federal Government entity, the Patented Medicine Prices Review Board:

http://www.pmprb-cepmb.gc.ca/

They set pricing limits. This has nothing to do with "huge bulk orders".

Snarking notwithstanding

[kid-noodle]

I note the comments are filled with cynicism, sarcasm & general snarking - a not unreasonable approach to any announcement from GSK or any other pharmaceuticals company.

That said - this is potentially a really fantastic thing. New CEO, new game plan. Also worth noting that GSK is the second biggest pharma company in the world - this has a pretty good probability of forcing other large pharma companies to follow suit and opens the door to more of the same (for example, HIV/AIDS drugs are not covered in the patent pooling - this is still a move in the right direction, it will make subsequent moves along the same lines easier.)

Patent pooling is something NGOs have been asking big pharma to do for years now. This is a hugely positive move.

Of course GSK have motives to do this besides doing good, that does not mean doing good is ruled out.

(And I will now be watching the obits for news of Andrew Witty's untimely demise.)

Re:So...

[Rycross]

Well this case its a company, not a government, deciding to force charity, but don't let that get in the way of your libertarian rage.

Not capable of processing nuance I guess

[unassimilatible]

So in this post you say "The US is where rich Canadians go to get their healthcare"; two posts earlier you said "Moore didn't exactly show the experience of the average Cuban. He and his prop were treated like a VIPs".

Michael Moore showed how the 50 or so high-ranking Communist Party Members and select VIPs get treated. In contrast, Canadians come to America to get the healthcare that the vast majority of Americans (80+%) get (of course they have to pay out of pocket since they don't have American insurance or medicaid). If you can't see the the difference, you must have been educated in American public schools, another argument against the government running anything.