gsk on addressing aids issue in african countries

8/13/2019 GSK on addressing AIDS issue in African countries

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GlaxoSmithKline and AIDS Drugs for Africa

Presented by (Group 4) :

Nakul Agarwal (D004), Sanket Guhagarkar(D020),Tanvi

Gupta(D026),Piyush Jain(D029), Saurabh Jain(D030)


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Overview of GlaxoSmithKline

GlaxoSmithKline (GSK) British Multinational pharmaceutical, biologics, vaccines

and consumer healthcare company:

Worlds fourth largest pharmaceutical company

Established in 2000 by the merger of Glaxo Wellcome plc and SmithKline

Beecham plc


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Mission

7% of total global pharmaceutical sales

Total company sales: 21.2 bn / $31.8 bn

Our International Region covers 80% of the worlds population

GSKs mission is to improve the quality of human life by enabling people to do

more, feel better and live longer


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GlaxoSmithKline (GSK) operates in three primary areas of business: Pharmaceuticals, which includes prescription pharmaceuticals

Vaccines; which includes developing preventive vaccines for major diseases

Consumer Healthcare; which includes oral health, nutrition, wellness, and skin

health consumer health products

GSK is the only company in the world that holds the patents over the drugs used

for HIV/AIDS treatment

In 2009, GSK (85 %) partnered with Pfizer(15%) to institute a global specialist HIV

company ViiV Healthcarewhich is a dedicated to delivering advances in

treatment and care for people living with HIV.

Primary Areas of Business


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HIV / AIDS in Africa

Major public health concern

Sub-Saharan Africa alone account for

an estimated 69% of all people living with

HIV and 70% of all AIDS deaths in 2011

Southern Africa worst affected regionon the continent


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Core Interest of GSK in Africa

Huge opportunity for GSK s HIV / AIDS drugs as more than 25 million people were

infected with HIV causing virus in 2001

Developed countries accounted for 90% of the sales

Criticism

Glaxo has been criticized by human rights and shareholder activists for not doing enough

to make available HIV / AIDS drugs to people in Africa


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Access To Medicine (ATM) Outlook

Developed a sustainable long-term approach to improve Access to Medicine (ATM).

Targets Index Diseases (IDs)

GSK has strengthened its flexibility in its approach to Intellectual Property relating to

neglected diseases and pricing

In the ATM Index 2010, GSK Ranked1st overall

Above average ATM Performance

Management system

Above average and diverse stake-Holder engagement for numerous

access initiatives


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Developing Countries and Market Access

(DCMA)

Aim : To improve access to GSKs HIV medicines to Lesser Developed

countries(LDCs) in Africa and Asia at an affordable price

Mission: `Bringing more affordable, quality GSK medicines and vaccines to patients

who need them in the worlds poorest countries.

GSK also has three corporate strategies comprising its Access to Medicine

Corporate Principle, as follows:

Pursuing flexible pricing strategies;

Refocusing R&D activities to reflect the needs of developing countries; and

Seeking innovative partnerships to try to reach people who would otherwisenot have access to medicines and vaccines.


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Governance: Performance Management

& Incentives

Focus on Volume Growth rather than Delivery of Profit

GSK instituted bonus schemes for its senior managers for effective delivery of

its initiatives that improve access to medicines in LDCs

GSK has instituted bonus schemes in its DCMA units to directly incentivize

managers who increase access to medicine

The rewards are based on volume growth rather than the delivery of profit

The company has also instituted a Presidents award scheme to formally

recognize examples of initiatives that improve access.

This also ensures sustainability, because though the medicines are made

available at a reduced price, the total number of customers are increased by

increasing its availability thus leading to equitable profits


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Stakeholder Engagement

Customers : Patients who need

Antiretroviral drugs and doctors whoprescribe them are primary stakeholders

GSK has the moral obligation to provide

the ingredients of each drug so that

Doctors can access the effectiveness of

particular drug

Core Stakeholders : They are scientists

who create effective drugs by dedicated

R & D and investors who invest in GSK

for funding these R & D projects

GSK should utilize these funds efficiently to create a value for their stakeholders

Society : Aids inflicted population of Sub saharan region. GSK should provide cheap

drugs and create awareness about health and hygiene

Business Partners : This includes Regulators and Distributors who help GSK ti effectively

spread the drugs to the concerned patients.


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Equitable Pricing, Manufacturing and

Distribution

Tiered (or equitable) Pricing schemes:

For HIV/AIDS medicines, GSK through ViiV Healthcare offers not-for-profit

prices in LDCs, in all of sub-Saharan Africa, and in all LICs

In middle-income countries, GSK has also introduced intra-country tiered

pricing, within markets, to reach new sectors of the population based on

assessing the patients ability to pay

GSK publicly discloses the proportion of its global revenues covered by tiered

pricing programs for HIV/AIDS medicines only

In LDCs where it is the sole supplier in that market, GSK caps the prices of its

patented medicine including (HIV/AIDS) and vaccines at not more than 25% of

prices in the UK, provided this price covers its manufacturing costs


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Positives from tiered pricing approach

Prices were reduced by an average of 45%. Sales volumes for the majority of

products have increased significantly following the price decreases, and GSK states

that this has increased access to these products to more patients.

The increased volume for these products in these markets shows that the business

model is sustainable and reflects the increased number of patients who now haveaccess to these branded products including HIV/AIDS drugs.

Equitable Pricing,Manufacturing and Distribution


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GSKs stand on Patents and Licensing

Public disclosure of pro-access position statements regarding TRIPS and

compulsory licensing

Although the company holds some patents in LDCs, it has made a commitment not

to enforce those patents

The company has issued 11 Non-Exclusive Voluntary Licenses (NEVLs) for ARVs for

producing HIV related drugs, in places where GSK does not have accessibility at the

moment

Patents and Licensing


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Trade Aspects of Patents:

Full respects towards TRIPS flexibilities

Patents not filed in Index Countries

Access-orientated IP/deal-making strategy for ICs

ViiV Healthcare has issued NEVLs to 12 generic companies for the manufacture

and supply of its regulatory approved products as follows

The licenses provide each generic manufacturer the option for the manufacture

and supply of ViiV Healthcare's entire antiretroviral portfolio for supply to all

LDCs, all LICs, and all countries in sub-Saharan Africa

Aspen Feza

Adcock Ingram Ranbaxy

Biotech Cosmos Universal Ltd

Cipla MedPro Universal Corp

Strides Specpharma

Emcure Aurobindo


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Support for Medical Patent Pool(MPP)

GSK has not yet shared any of its HIV drug molecules to MPP

However, GSK has entered formal negotiations with MPP through ViiV Healthcare

since Jan 2011, and since then has held several constructive meetings


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GSK and Millennium Development Goals

GSK has developed pediatric formulations in the form of Anti-Retrovirals (ARV) to treat

the children Embarked a global partnership with Save the Children to ensure that every childreceives essential healthcare and reduce mother-child HIV transmission

Reduce ChildMortality

GSKs R&D pipeline includes a Phase I biopharmaceutical and a Phase III asset

Votrient, both aimed at treating ovarian cancer, and also research is under way ontreatments for breast cancer

Improve MaternalHealth

GSK carries our drug donations in line with WHO guidelines on Product Donations

ViiV healthcare works exclusively on research, development and commercialization ofHIV treatments

Combat HIV /AIDS, malaria and

other diseases

Created a Green Chemistry Performance Unit to research ways to replace hazardouschemicals and processes with lower impact alternatives.

Ensureenvironmentalsustainability

GSK is working with various stakeholders to provide access to HIV/AIDS drugs in lesserdeveloped countries through tiered pricing and various partnerships

Develop a globalpartnership for

development


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Sustainable Philanthropy

In 2011, GSK reinvested approximately USD 6 million due to the companys commitment

to reinvest 20% of profits in LDCs

In 2010, GSK dedicated approximately USD 84 million in resources to philanthropic

projects in ICs, and approximately USD 54 million in 2011

In 2010, GSK started a skills-based volunteering initiative called PULSE that empowers

employees to make a sustainable difference for communities and patients in need


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Book References:

Anne T. Lawrence & James Weber (2010), Business and Society:Stakeholders, Ethics, Public policy (12th ed.). New York, NY, 10020

Webpages:

GSK, (2013), GSK Annual Summary 2012. Retrieved from

http://www.gsk.com/content/dam/gsk/globals/documents/pdf/GSK-Annual-

Summary-2012.pdfGSK, (2011), GSK on compulsory licenses, Retrieved from

http://www.gsk.com/content/dam/gsk/globals/documents/pdf/GSK-on-

compulsory-licences.pdf

GSK, (April 2011), GSK on IP and access to medicines in developing

countries, Retrieved from

http://www.gsk.com/content/dam/gsk/globals/documents/pdf/GSK-on-IP-and-access-to-medicines-in-developing-countries.pdf

Access to medicine index, August 2012, Company profile access to medicine

index 2012, Retrieved from

http://www.accesstomedicineindex.org/sites/www.accesstomedicineindex.org/file

s/company/downloads/company_profile_access_to_medicine_index_2012_03122

012_final_gsk.pdf

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gsk on addressing aids issue in african countries

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