GSK in the Lead but Who Will Follow

GlaxoSmithKline, one of the bigger of Big Pharma, lengthened its lead in the global health business again by announcing several initiatives to address the health needs of the world’s under-served populations.  GSK, or more specifically, its CEO, Andrew Witty (visionary, iconoclastic, wrong-headed?), described them in a speech on January 20:

– Patent Pool:  BIO Ventures for Global Health will administer the GSK/Alnylam program for the user-friendly licensing of patents for neglected disease drug development, but more importantly, the pool will include access to know-how and data associated with the patents (a concern of mine; see my posting 10/8/09);

– Open Lab:  GSK will welcome up to 60 scientists and their projects from academia and biotech companies to its drug discovery unit in Tres Cantos, Spain, and fund a number of these through a fund, started at $8M;

– Compound Library:  GSK will publish on the web the results of a 5-year screening study of its 2 million compounds against the malaria parasite, including structures and data.

Witty also announced a “sustainable” pricing strategy for its malaria vaccine (“RTS,S”) now in late stage testing.  The price will be set at the cost of product plus a small profit (he mentioned 5%) with the profit earmarked for GSK’s neglected disease drug research. Although he noted during the Q and A that this type of pricing would be product-specific (e.g., it did not apply to HIV therapeutics since HIV was not a neglected disease), I think this is a great precedent, but will also propose that, since $200M of the $500M of the vaccine development cost was donated by the Gates Foundation (as Witty noted), 2% of the 5% should go back to the Gates to support global health product innovation in other companies.

For the specifics, you can view the speech and Q and A at the Council on Foreign Relations website (CFR) and read the press release (GSK PR) and Andrew’s blog posting (GSK blog).

All good so far, with the devil being in the details.  I am looking forward to see how one applies for space and funding at Tres Cantos (I have a couple projects in mind) and how BVGH will administer the patent pool since one role of the administrator should be to qualify licensees and issue licenses.  In its press release, BVGH mentions only it “will organize disease-specific meetings that identify the gaps in expertise and intellectual property … [and] will then help global health researchers work with industry to fill these gaps ….” (BVGH PR).  It is also unclear if GSK will license out any of the anti-malaria hits it is not pursuing.  Still, these initiatives plus its other neglected disease programs (e.g., African Malaria Partnership grants, collaboration with Medicines for Malaria Venture, 19 products in development [GSK GH]) clearly put GSK ahead in the race.  But is there a race and who else is in it?

A quick look at the rest of Big Pharma finds two categories; those companies that have made addressing global health a priority in their drug discovery and corporate social responsibility (CSR) programs and those that haven’t.  In the first category are:

1)  GSK:  for the reasons above, but some skeptics, using their broadest, tarriest brushes, would say the GSK wants to distract attention from its record of influence-buying, market-rigging, price-gouging, and general capitalistic rapacity.  Other skeptics may say that so long as the bottom line isn’t negatively affected, shareholders won’t care and will let Andrew be Andrew.

2)  Novartis:  has an active free/affordable medicine access program, two institutes for global health drug/vaccine development, and foundation for “sustainable” development  (Novartis Access), and launched (with Medicines for Malaria Venture) the only pediatric med for malaria in 2009 (Coartem Dispersible).

3)  Merck:  a long-time donor of its meds for neglected disease with a serious commitment to affordable access to its HIV drugs and vaccines (Merck Access).

4)  Pfizer:  has long-term fellows program that places employees with global health non-profits, medicine donations, a health care delivery improvement program, and a relatively small and ineffective grants program (Pfizer GH).

5)  sanofi-aventis:  has a low profile meds access program and some drug development, primarily for malaria, but its vaccine group has a dengue fever vaccine in development (SA Access).

Global health is a low priority for:

6)  Roche:  has taken a small step in GH drug development through a collaboration with OneWorldHealth and has concentrated on HIV drug development and access (Roche GH).

7)  Eli Lilly:  says its is willing to “share” its expertise but has only one serious global disease drug development program in TB which has dual market appeal (Lilly GH).

8)  AstraZencea:  has only a program for TB drug development (AZ GH).

9)  Johnson and Johnson: seems to have minimal interest in neglected diseases for a global company, says it is “enhancing access” to its HIV meds (JNJ GH).

10)  Abbott:  claims to have a commitment to affordable pricing but no commitment to GH product development (Abbott GH).

11)  Bristol-Myers Squibb:  has a minimally-endowed foundation that gives grants, a few of which are relevant to GH (BMS GH).

Not much of a race, yet.

Is there a Bottom Line Behind the Headline?

Recently, the Welcome Trust, the British giant philanthropy, and Merck and Co., a leading member of Big Pharma, announced a “first of its kind” joint venture to advance vaccine development for diseases of the low-income countries (September 17, 2009, Merck press release).  While the venture’s objectives and funding are commendable, after a closer look for the bottom line (i.e., creating affordable, new vaccines) I’m inclined to view it as a well-intentioned effort that will fall short.

As described in the release, Welcome and Merck, specifically Merck’s Indian subsidiary, MSD, are going 50/50 on about $130 M of funding in a 7-year commitment to set up and operate a R and D facility in India that will develop new vaccines and possibly improve existing vaccines for developing world use.  The facility, named the Hilleman Laboratories after Maurice Hilleman, the outstanding vaccinologist of the 20th century, has as its vision, as given in the press release but oddly not on the Laboratories’ website (Hilleman Laboratories):  “A Sustainable, Not-For-Profit Operating Model to Turn Innovative Science into Practical Solutions for Those in Greatest Need.”  Although not made explicit in the release or on the website, the Operating Model seems to be that the Laboratory will invent (or acquire from academia?) candidate vaccines, conduct preclinical studies (with direct help form Merck?: “The Hilleman Laboratories will work to advance projects to ‘proof of concept’ by providing key expertise in product development and optimization that is typically available only within large vaccine companies”), conduct some degree of CMC/manufacturing development (“The Hilleman Laboratories will also work with vaccine manufacturers to ensure production can be scaled and that the vaccines are affordable”), and then?  It is not clear who/what/how will handle the clinical testing, registration, manufacturing, and distribution, i.e., the heavy lifting needed to get a vaccine into people’s arms.  Maybe no-cost licensing to PDPs (product development partnerships) already working on vaccines like the Sabin Vaccine Institute, Malaria Vaccine Initiative, International AIDS Vaccine Initiative, and Global Solutions for Infectious Disease?  Nothing beyond “productive partnerships” is mentioned.  Maybe out-licensing to for-profits with dual market objectives?  The press release has no comment on a business development/licensing function, just a hint that the founders “envisage” that the Lab will receive compensation for its innovations when used in higher income markets.

Further, it is not clear who in the organization will have the experience to watch the bottom line and build a truly sustainable operation that can deliver the goods.  The Chief Executive Officer is Altaf Lal, clearly a highly experienced scientist and bureaucrat.  The two named advisors are from the UK government and WHO.  Granted Dr. Lal is probably building his organization now, but I would hope he is engaging professional (non-academic) vaccine developers as employees and former/current biotech/Pharma executives as advisors.  I’m sure BIOVentures for Global Health could be helpful in the recruiting process for both employees and advisors.

So what’s in this for Merck?  Certainly good (and deserved) PR.  A cynic may say also a chance to guide the Laboratories’ project selection away from the development of competing products, but this is not likely since Merck has a solid history of corporate responsibility in global health (its donation of ivermectin to treat onchocerciasis/river blindness began in 1987) and has substantial R and D and access programs (Merck GH CR).  I would hope that Merck sees the Laboratories as an opportunity to attract academic ingenuity and generate vaccine candidates for its pipeline, i.e., get serious about making profitable vaccines for low-income markets.  Although the funding is helpful ($10M per year is less than half of one percent of its overall R and D budget), Merck’s direct involvement in the commercialization stages (i.e., product realization) is needed and would truly make the Hilleman Laboratories a venture and an innovation in developing affordable vaccines.