A Good Week for Big Bad Pharma

In last week’s post (“Trickle Down Again”), I wrote briefly about an announcement by the big pharma company, GlaxoSmithKline (GSK), on its plan for building its market in Africa and recycled a post from last fall about GSK and other pharma companies in the emerging and developing market countries. I thought GSK’s plan warranted a closer look since it illustrates the complications of improving health care in Africa and shows how the company thinks it can do so in a sustainable (profitable) way.

As was described in the company press release, GSK is committing £130 million over five years (about $42 million per year) to a plan that is “designed to address pressing health needs and contribute to long-term business growth.” I parsed the plan into the following parts:

Improving academic research infrastructure: GSK will first fund up to 25 professorships in African universities in the fields of pharmaceutical sciences, public health, engineering, and logistics with the long-term goal of building in-country manufacturing capabilities (amount of funding was not given). Second, it will establish a new “R&D Open Lab for NCDs” (non-communicable diseases) as a complement to its four-year-old Open Lab at Tres Cantos which is the company base for collaborations on infectious and neglected disease research (see Tres Cantos). In the new Lab, GSK researchers at its Stevenage R&D center will collaborate with African researchers to “conduct high quality epidemiological, genetic and interventional research to increase understanding of NCDs in Africa.” The near-term goal is to fund directly the education and training of African scientists and long-term to generate freely-available data needed for drug development. GSK will apply £25 million to this effort.

Improving the supply of GSK products: the company will spend £100 million to expand its existing manufacturing facilities in Nigeria and Kenya and build up to five new factories. The new GMP-compliant plants will make products such as antibiotics and respiratory and anti-HIV medicines and may be built in Rwanda, Ghana, and/or Ethiopia. FiercePharmaManufacturing reported this build-out will create 500 new positions (FPM article). The company will also improve its supply chain by creating regional supply hubs specific to serving rural areas. No amount was given for this effort. Also, GSK will work with its current business partner, the Aspen Pharma Group of South Africa, and regulators to increase the registration of GSK medicines and vaccines (mentioned are an antibiotic, Amoxil, and a respiratory med, Ventolin). Again, no monetary commitment was given.

Improving the health care system: over the next thee years GSK will contribute an unspecified amount of funding to support the training of 10,000 health care workers through an NGO, the One Million Health Workers Campaign. This effort is part of the company’s commitment to reinvest 20% of any profits generated in developing countries into strengthening health care infrastructure in those countries and through which GSK stated it will have supported the training of 15,000 workers by various NGOs partners by the end of this year.

So GSK is intending to improve health care in Africa through a long-term effort aimed at a number of targets- collaborative research, manufacturing, distribution, product registration, and community health worker training- which is good. Unlike some of the advocacy groups or NGOs which focus on a single aspect of the health care system, GSK is applying its operational experience and corporate giving in multiple areas to effect improvement. But the amount of funding committed is small relative to the overall company profits (probably less than one percent of 2013 $10 billion net profit before taxes) and modest relative to sales in Africa (about three percent of $1.5 billion annual sales); it should be/could be larger.

What other MNCs deserve notice for efforts in the emerging/developing world? Not to be out done by its rival GSK, Sanofi’s CEO, Chris Viehbacher, pointed out last week at conference on neglected diseases that Sanofi was investing almost 100 million euros ($138 million) in manufacturing and distribution in Algeria and Morocco, and started three collaborations with the Moroccan government to train doctors, build treatment facilities, and train regulatory staff (FiercePharma article). He also noted the company had 1 billion euros in sales in Africa last year and expects double-digit growth, so more investment is warranted.

Also last week, Merck announced that it and the Swiss specialty pharmaceutical company, Ferring, will be supporting the clinical testing of a new room-temperature-stable formulation of the drug, carbetocin, to prevent excessive post-partum bleeding (hemorrhage) (press release in FierceBioech). Post-partum hemorrhage is a main factor in the 275,000 annual maternal deaths, and the current therapy, oxytocin, requires cold chain distribution. The trial will be conducted by WHO starting this year and will involve 29,000 women in 12 countries. Merck did not specify how it will support the trial or amount of funding but did note that the trial is part its $50 million per year, ten-year program called Merck for Mothers (MFM). This drug development effort looks to me to be unique among the MFM-supported projects, most of which involve education and training conducted by universities, governments, and NGOs in Brazil, India, Uganda, US, and Zambia, and looks to me to be a more effective application of the companies’ expertise.

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