Credit: Victor/Flickr

Glaxo's big pharma giveaway is smart business

By ending patent-filing in the poorest countries, Glaxo provides a much-needed antidote to the pharmaceutical industry's toxic image.

by Adam Gale
Last Updated: 01 Apr 2016

Overpaid, smirking, price-gouging merchants of death. For an industry that literally saves millions of lives a year, big pharma doesn’t exactly have a great rep. But that’s not for want of trying. Some drug companies have CSR departments on steroids, and they’re not afraid to flex their muscles.

British giant Glaxo is leading the way (having put the Chinese bribery mess behind it). Soon-to-depart boss Andrew Witty has announced the firm will no longer file patents in 85 of the world’s poorest nations, while granting licenses in a further 51 lower-middle income countries for generic manufacturers to make its drugs at low cost.

It’s an extension of Glaxo’s ‘flexible approach’ to IP, which effectively means being strict with intellectual property rights only in those countries that can afford it. Its HIV and cancer medication, for instance, has already been placed into the UN Medicine’s Patent Pool, which effectively allows them to be produced as generic drugs in poor countries. 

It’s a win-win strategy. The company doesn’t make much money in the poorest markets. What it gets for sacrificing that is a PR victory, which may not shift drugs but could certainly enhance its reputation as an employer, and brand exposure in emerging high-volume, low-cost markets.

‘There's no doubt that pharma in the emerging markets has some analogous characteristics to our consumer business,' Witty told MT in a wide-ranging interview in 2010. 'It's more about cash out of people's pockets, and they care about brands. There will still be regulation, of course, but many of the processes and mindsets are similar.'

Enlightened self-interest it may be, but it’s still the right thing to do. By giving generic manufacturers the green light, it makes it possible for the world’s poorest nations to develop their own pharma industries, rather than relying on handouts.

It’s true that many of the poorest countries are exempt from patent enforcement until 2033 anyway under a WTO agreement, but Glaxo is both extending that and establishing a long-term principle that other companies seeking a reputational balm could follow. God loves a cheerful giver, as the saying goes, but heaven helps those who help themselves.

'When we make money in the west, we can afford to provide healthcare in the developing world that otherwise would not happen.’Andrew Witty lays out Glaxo’s strategy to MT in 2010 – but has it changed?  

Find this article useful?

Get more great articles like this in your inbox every lunchtime