Altruism and Profit: The Changing Role of Pharmaceutical Companies in Global Health

| February 1, 2012 | 0 Comments

Big pharmaceutical companies have long played a role in the field of global health—from both hindering the dissemination of fairly priced drugs in developing countries and, more recently, working with generic manufacturers to drive down the aforementioned prices of these drugs. As a result of a novel combination of moral and financial incentives through social activism and generic manufacturing, however, pharmaceutical companies have been motivated to refocus their efforts when working in the developing world.

Within the past 20 years, the price of antiretroviral drugs (ARVs) has fallen significantly. The decrease is dramatic: from an original price of $10,000 to $15,000 per year, the drugs now cost around $300 annually. This sharp decrease followed a decision by Cipla Limited, a generic pharmaceutical company in India, to produce generic ARVs that were identical to the high-priced ARVs distributed.

This decision caused an uproar in the pharmaceutical community, as the expensive treatments sold by these firms reached only 2 percent of people living in developing countries. Five years after the treatment was introduced, companies faced pressure from activist groups, foundations, and governments to lower their prices. As a result, prices of first-line ARVs in low- and middle-income countries fell 30-68 percent between 2004 and 2008.

More recently, pharmaceutical companies have come under scrutiny once again for the price of life-saving vaccines distributed in the developing world. In May 2011, UNICEF publicly announced for the first time the prices of the vaccines that it pays for and distributes from GAVI, the Global Alliance for Vaccines and Immunization, astounding donors with the huge disparities across manufacturers. Organizations hope that the public will react well to this information. Daniel Berman, Deputy Director of Doctors Without Borders noted, “As soon as the donors see the differentials, they’re going to insist that UNICEF and GAVI get better prices.”

Members of the Harvard community and the Global Health and AIDS Coalition gathered outside of Merck Laboratories in October for a “Pool Party” in order to convince Merck to begin talks to join the Medicine Patents Pool. (Courtesy of Lauren Onofrey)

For example, the compound that prevents diphtheria, tetanus, whooping cough, Hepatitis B, and haemophilus influenzae type B costs $2.25 per dose when produced by the generic producer Serum Institute of India but $3.20 per dose when produced by Crucell, a company recently purchased by Johnson & Johnson.

Pharmaceutical companies demonstrated their concern with intellectual property in their swift response to UNICEF. For example, Glaxo-Smith Kline announced a price cut of two-thirds in its rotavirus vaccine just two days after the announcement.

To Anne Pollock, an assistant professor of science, technology, and culture at Georgia Tech, this reaction by drug companies displays the changing role of these organizations in global health. In an interview with the HCGHR, Professor Pollock said, “The convergence of philanthropic and pharmaceutical interests adds a new layer. Political pressure does have an impact, and the pharmaceutical industry has taken into account the political price [in lowering] the price.”

Professor Pollock, however, also pointed out the underlying interests of movements, saying, “Philanthropy, itself, is also very interested in intellectual property. It makes sense, for example, that Bill Gates is supporting the pharmaceuticalization of the global South with protection of intellectual property.”

On the Harvard campus, social activism groups are also participating in movements to pressure big pharmaceutical companies to rethink their strategies in the developing world. For instance, The Harvard Global Health and Aids Coalition (GHAC) has spent the fall semester promoting the Medicines Patent Pool, in which pharmaceutical companies willingly share their patents with the Pool in order to allow generic manufacturers to create medicines of the same caliber and at a lower price. In addition, the GHAC is involved with pressuring Merck, the patent holder of two essential HIV/AIDS drugs, to join the Pool, as the company has thus far been reluctant to do so. Currently, the National Institute of Health (NIH) and Gilead are members of the Pool.

The GHAC has requested that Merck begin negotiations to enter the patent pool by 2012, allowing generic manufacturers access to their patents for these expensive ARVs. On October 21, 2011, the GHAC organized a “Pool Party” outside of the Merck laboratories in Boston, MA in order to deliver a petition requesting their entrance into the Pool. Nathan Georgette ’13 said, “Companies won’t make more of a profit from joining the Pool, but they will not really lose that much profit either. Our primary message is the moral imperative of having a resource that can alleviate suffering; refusing to make that accessible to those suffering runs counter to fundamental human morality.”

On the other hand, credit cannot be entirely attributed to activist groups in the demand for the creation of generic drugs for use in developing countries. According to Dr. Stefan Ecks, a medical anthropologist at the University of Edinburgh, it is the producers of generic drugs that have encouraged this trend.

In an interview with the HCGHR, Dr. Ecks said, “I don’t want to suggest that there is anything wrong with activism, but it is more of a nuanced picture. What is usually completely overlooked is the role of the generic producers and their relationship with big brand manufacturers.”

Commenting on generic manufacturers’ interests, Dr. Ecks added, “Often, the companies just have a product that is cheaper than their competitors, which makes them more attractive to humanitarian organizations. They are, however, just selling their own products. There are, for example, a few manufacturers in India that present a kind of nonprofit alternative to the generic “brand,” but they also need to make sure that their own profits are in order and would drop any product or drug if it doesn’t turn a good profit for them as well.”

While interventions by pharmaceutical companies in global health have long been criticized and debated, it is clear that big companies, generic manufacturers, and activists alike share a similar goal: maximal dissemination of life-saving drugs. It is, therefore, from this standpoint where collaboration must occur to improve the equity of delivering these drugs to those in need around the world.

Category: Panorama, Spring 2011

About the Author ()

Leave a Reply