Critics loved the Oscar-winning film The Constant Gardener. But it must have been greeted with dismay in the boardrooms of big pharmaceutical companies when it was released in 2005: the film shows them ruthlessly willing to swap lives for profits. And it was just one of many low points for the industry in the last decade. At times it seemed as if its mission was to manufacture public relations disasters, not drugs. In 1998, big pharma took on Nelson Mandela’s plan to make Aids treatments affordable. (It lost). As if going up against the world’s most respected man wasn’t enough, drug companies have also acquired a reputation for bribing doctors, selling medicines that make young people suicidal, cheating medical journals, running deceptive television advertisements and ignoring diseases that kill millions in the developing world. Their moral stock has, like their financial stock, tanked.
This is the unhappy backdrop against which Andrew Witty, the soon-to-be CEO of GlaxoSmithKline (GSK), took the lectern at the Harvard Medical School on 13th February 2009. He had surprising news: GSK would soon cut prices in poor countries and begin to share its secrets with rival companies. The aim was to encourage the development of new drugs to fight neglected diseases. Approving coverage followed: the Guardian, a frequent critic, splashed the story and even ran a glowing editorial about Witty.
The most intriguing part of GSK’s news was the plans to share information with its cut-throat competitors in what are known as “patent pools.” The move has potentially radical implications, both in the pharmaceutical industry and beyond. Most directly it could begin to solve various “market failures.” Drug companies are owned by shareholders who want to make money. As a result America alone spends over $60bn researching lucrative new drugs for the rich world, but a paltry $230m on trying to end developing world scourges like malaria. Spending on research in rich nations is also skewed. Only about a quarter of new drugs are new treatments, the remainder are “me-too” products: attempts to cash in by slightly updating existing treatments in profitable markets, like the $30bn people spend every year on cholesterol-lowering drugs known as statins. In short, pharmaceutical companies do not develop the drugs the world needs because the market is telling them not to bother.
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