Rico's rants: Big Pharma, doing good

09 February 2010

Big Pharma, doing good

Rico says he didn't work at GSK in 2008 when Andrew Witty became CEO, but he sounds like the right guy for the job, according to Donald McNeil's article in The New York Times:

Andrew Witty is not quite as young or as buff as Anderson Cooper, but he does do interviews in shirtsleeves from the slums of Nairobi and rural hospitals in Uganda. What makes that unusual is that Mr. Witty is not a roving CNN anchor, but the chief executive of GlaxoSmithKline, the world’s second-largest drug company. Besides being the youngest person in such a post (he was appointed in 2008 at 43) he is also making a name for himself by doing more for the world’s poor than any other leader of a colossus of Big Pharma.
“I want GSK to be a very successful company, but not by leaving the population of Africa behind,” Mr. Witty said in an interview. “In any village hospital, you can see the beds filled with women and babies severely febrile with malaria, staring into space, and you wonder: Who’s taking care of the other children? It’s so obvious, the damage that’s being done.”
That tone is still rare in an industry once pilloried for keeping its prices up while millions died. Until a decade ago, all major drug companies treated Africa, Latin America, and most of Asia as not worth the trouble of marketing to. But Mr. Witty, who started as a Glaxo trainee right out of the University of Nottingham, spent ten years in Africa and Asia, and he was inspired to change that.
A memory “that still makes the hair go up on the back of my neck,” he said, was arriving in South Africa just before the 1994 elections, when many feared the country would explode. He was 29, head of the office but often mistaken for an intern, and co-workers advised him to buy a gun and stockpile food in case of civil war. On the eve of the election, he gathered the Johannesburg factory’s 300 frightened workers to reassure them that the plant and their jobs would remain, come what might.
Election Day dawned with a bomb blast at the airport, but then blossomed into a festival of racial unity, democracy, and victory for Nelson Mandela. “It was as if the whole country had looked into an abyss and decided: ‘You know what? We’re not going to jump,’ ” Mr. Witty said. That “bonding experience” taught him how resilient Africa could be; and then he was invited to help the Mandela government write its drug and health care policies.
Later, working in China, India, Myanmar (formerly Burma), Pakistan, and Vietnam, he found “just unbelievable energy to self-improve, to lift themselves up. They deserve their chance.”
Now Glaxo is ranked No. 1 on the Access to Medicine Index created in 2008 by an organization based in the Netherlands that rates pharmaceutical companies on their stances toward the poor much as Transparency International ranks countries on corruption.
Glaxo has cut deals with drug makers like Dr. Reddy’s in India and Aspen Pharmaceuticals in South Africa to support their new drugs and jointly market Glaxo brands. It is teaching Brazil’s state vaccine company, Fiocruz, how to brew its new pneumococcal vaccine.
Last year, in a speech to Harvard medical students, Mr. Witty promised to keep the prices of all Glaxo drugs in poor countries to no more than 25 percent of what was charged in rich ones, and to donate one-fifth of all profits made in poor countries toward building their health systems. Glaxo has built a laboratory in Tres Cantos, Spain, specializing in malaria and neglected diseases. The company put its drugs for neglected diseases into a “patent pool” so researchers can refine them or combine them with those of rivals. It lends young executives to the governments of poor countries and to the partnerships fighting various diseases.
Since 1998, it has donated one billion doses of albendazole, a worm-killing drug, to prevent the grotesquely swollen legs and scrotums of elephantiasis, or lymphatic filariasis. Mr. Witty promised to quadruple the annual donation and make other gifts.
Just last month, in a speech to the Council on Foreign Relations, he made two new offers. The company screened its library of two million chemicals for all that attacked malaria, a process that took five technicians a year in a high-biosecurity laboratory because the parasite is too dangerous to run through the routine screening machines. The 13,500 “hits” they got will all be posted on websites, available free to anyone working on malaria. “However,” he joked, “if someone says, ‘My goodness, I’ve just found a new cardiac medication,’ well, that’s a different conversation.”
Also, he promised that if the malaria vaccine the company had been working on for 23 years passed its clinical trials, it would be priced at only five percent over the cost of making it. The company will not try to recoup the huge research costs, which have been shared by the United States Army and the Bill and Melinda Gates Foundation.
Mr. Witty’s plans have been widely praised. While other companies let some researchers search their libraries, Glaxo has set a new standard for openness, said Timothy Wells, chief scientific officer of the Medicines for Malaria Venture, which seeks new drugs. “At most companies, I can get in to talk to the head of R&D,” Dr. Wells said, “but without the CEO being visibly behind it, people aren’t able to commit. This will probably speed up the process by several years. Bill Gates can get CEO’s together,” he added, “but that’s not enough. People respected by their peers have to put their skins on the line.”
Dr. Bernard Pécoul, executive director of the Drugs for Neglected Diseases Initiative, said that drug companies were finally helping the poor but that Glaxo was “more innovative". And Sophia Tickell, who in 2001 led Oxfam in accusing the whole industry, and Glaxo in particular, of “waging an undeclared war on the poor,” trusted Mr. Witty’s sincerity enough to become a paid Glaxo adviser. When he introduced her to the board, she said, he opened by saying: “This is Sophia. She wrote the report, and we deserved it.”
Mr. Witty still has critics. Daniel Berman, who a decade ago co-founded Doctors Without Borders’ Access Campaign, said that Glaxo’s work on transferring vaccine technology to middle-income countries was “still a lot of smoke and mirrors” and could go faster, that the Tres Cantos lab “still doesn’t have a big enough budget to make a difference” and that putting drugs for neglected diseases into a patent pool was “a bit silly” since no one fought for the patent rights anyway. “If they were seriously interested in patent pools,” Mr. Berman said, echoing a criticism voiced by Oxfam as well, “they’d try out the Unitaid one.” (Unitaid, a European agency using an airline ticket tax to buy drugs for poor countries, has offered to oversee a pool of patents on AIDS drugs so new combination pills can be made cheaply.)
Mr. Witty counters that AIDS is not just a disease of the poor and that Glaxo needs to keep making profits in rich and middle-income countries. The company lets Indian and African counterparts make its drugs without paying royalties, and they produce four times as many pills as Glaxo does. The company, Mr. Witty said, is “very much aligned with Unitaid’s goal and now in cordial negotiations with them. But we want to hammer out the details,” he continued.
In contrast to his aloof and abrasive predecessor, J.P. Garnier, Mr. Witty, a father of two teenagers, moved his office atop the London headquarters down to the ground floor, and he sometimes eats in the cafeteria or runs five miles at lunch. Many employees love his plans, he said, because it makes them feel they are helping the world. How shareholders feel will presumably depend on how the stock does during his tenure.
Reactions from his rivals at other pharmaceutical companies, he said, “run the full spectrum from very complimentary to ‘What are you doing? You’re undermining a critical piece of the business model.’" In the end, Mr. Witty said, “I’m in charge of an organization that can actually make a difference for people in the third world, and I am not going to be the person who, after a number of years, sits back and says, ‘Oh, I wish I’d done more.’”