Abstract
On April 22nd 2014, after a difficult year in which GlaxoSmithKline (GSK) had been accused of bribery in China and fined $3 billion by American regulators for marketing malpractice in the US, the pharmaceutical company announced a complex three-part restructuring deal with Swiss giant Novartis. The deal, one of a slew of multibillion-dollar deals in the global pharmaceutical industry, would allow GSK to focus on four key business areas – HIV, vaccines, respiratory conditions and consumer healthcare. It was seen as a win-win deal, offering both companies economies of scale that were increasingly vital for ‘big pharma’. Analysts believed it would ‘unlock significant shareholder value’, not least because it would allow GSK to return £4 billion to investors through a B share scheme.
“Today we live longer, healthier lives on average than at any time in history. Global life expectancy increased faster in the last 40 years than it did in the preceding 4000 – but not all groups benefited equally”.
Challenging inequalities in health – from ethics to action. Rockefeller Foundation
GSK’s mission: “to improve the quality of human life by enabling people to do more, feel better, live longer. We are doing this by developing innovative products and improving access to health care for patients around the world.”
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Notes
- 1.
Andrew Witty interview WSJ, 2011: http://live.wsj.com/video/does-a-company-have-a-soul/BF2AC683-9FC8-493C-9089-6EEB09646F97.html#!BF2AC683-9FC8-493C-9089-6EEB09646F97
- 2.
with Glaxo and SmithKline shareholders holding approximately 58.75% and 41.25% of the share capital of GSK respectively. The deal created the second largest research-based pharmaceutical and healthcare company in the world, with a global workforce in excess of 100,000 and a combined market capitalisation of £114 billion.
- 3.
The eight Millennium Development Goals (MDGs) were established following the Millennium Summit of the United Nations in 2000, with targets to be achieved by 2015.
- 4.
International AIDS Vaccine Initiative (IAVI), 2001.
- 5.
“AIDS in Africa: the Orphaned Continent,” BBC News Report at http://news.bbc.co.uk
- 6.
United Nations Basic Facts, December 2000
- 7.
Barton Gellman (2000), “The Belated Global Response to AIDS in Africa,” Washington Post, July 5 2000, p. A1
- 8.
Kurt Shillinger, “AIDS Drug Victory Sours in South Africa: Government Still Refusing to Supply AZT,” The Boston Globe, 23 April, 2001, p. A8
- 9.
AIDS in Africa: the Orphaned Continent, BBC News Report at http://news.bbc.co.uk
- 10.
In collaboration with Save the Children and Voluntary service Overseas
- 11.
- 12.
Attaran 2004, how do patents and economic policies affect access to essential medicines in developing countries?
- 13.
This had happened to GSK when they offered 50% lower prices in Kenya than in UK. As 80% of pharmacy shops in Kenya are run Indians. These Indians resold to cousins with pharmacy shops in UK—Source: Klaus Leisinger 10/4/2011: http://www.youtube.com/watch?v=9drMaDVg2eY
- 14.
- 15.
GlaxoSmithKline’s CR Report 2005 – Ignoring the big issues, Jan 15, 2007:
www.ethicalcorp.com/content/glaxosmithkline%E2%80%99s-cr-report-2005-%E2%80%93-ignoring-big-issues
- 16.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an international agreement administered by the World Trade Organization, set minimum standards for many forms of IP, including patents
- 17.
Attaran 2004, how do patents and economic policies affect access to essential medicines in developing countries?
- 18.
November 2007, Oxfam briefing paper: ‘Investing for life’
- 19.
In 2007
- 20.
- 21.
Excerpted from Andrew Witty quote during BBC Newsnight, June 13, 2011:
- 22.
- 23.
Ibid.
- 24.
GSK corporate social responsibility report 2013
- 25.
Ibid.
- 26.
Countries where gross per capita income was less than US$1570 would get the lowest prices
- 27.
Documentary patent or patients for Dutch TV, July 2011
- 28.
GSK Position on IP-and-access-to-medicines-in-developing-countries, April 2011
- 29.
GSK policy on Intellectual Property & Access to Medicines in Developing Countries, April 2011
- 30.
- 31.
- 32.
Untangling the Web of ARV Price Reductions, released July 2013 by the international medical humanitarian organisation Médecins Sans Frontières/Doctors Without Borders (MSF) at the International AIDS Society conference in Kuala Lumpur, http://www.msf.org.uk/article/hiv-generic-competition-pushing-down-drug-prices-patents-keep-newer-drugs-unaffordable
- 33.
Ibid.
- 34.
Ibid.
- 35.
In 2011, ViiV Healthcare and its licensees supplied an estimated 1.1 billion ARV tablets.
- 36.
GSK corporate social responsibility report 2013
- 37.
GSK corporate social responsibility report 2013
- 38.
GSK donated medicines and vaccines in response to natural disasters and planned programmes. In 2008, GSK valued its donations (calculated according to the industrialised retail price), in-cash social investments, and other charitable projects at £124 million.
- 39.
GSK Corporate Responsibility Report 2013
- 40.
- 41.
GSK corporate social responsibility report 2013
- 42.
GSK policy on Intellectual Property & Access to Medicines in Developing Countries, April 2011
- 43.
Ibid.
- 44.
GSK were a founding member
- 45.
GSK corporate social responsibility report 2013
- 46.
Jon Pender discusses GSK’s efforts in Africa, May 22, 2012: www.youtube.com/watch?v=oHKX7gkj9M0
- 47.
GSK – Our commitment to fighting Malaria, Oct 2013
- 48.
Through the launch of its Clinical Trial Register on the internet in 2004
- 49.
A public private partnership founded in 2001 between the Bill and Melinda Gates Foundation, WHO, UNICEF and the World Bank as part of the ‘Decade of Vaccines Collaboration’
- 50.
A vaccine that protects children against Rotavirus
- 51.
(Included supplying at least 30% of the vaccines for the Global Polio Eradication Initiative (a public private partnership of national governments and the WHO) until 2017). GSK corporate social responsibility report 2013
- 52.
WHO website 2014.
- 53.
GSK – Our commitment to fighting Malaria, Oct 2013
- 54.
- 55.
- 56.
- 57.
- 58.
Partnering with the Path Malaria Vaccine Initiative, a non-profit group FT, 25 April 2014: http://www.ft.com/cms/s/0/21788c96-be6d-11e3-a1bf-00144feabdc0.html#ixzz2ztByUsuq
- 59.
GSK corporate social responsibility report 2013
- 60.
GSK responded by promising to reveal all its trials and to publish all its data, regardless of their outcome, and other large drug companies followed. FT April 16, 2014 -When use of pseudo-maths adds up to fraud
- 61.
Bad Medicine: The Glaxo Case: http://www.youtube.com/watch?v=NJh9o-MCPXw. When Eckard issued warnings to shut down the plant & detailed 9 high risk areas in the plant, no one listened & she was subsequently sacked
- 62.
http://video.ft.com/2563890263001/Mild-pain-relief-for-GSK/Companies, Jul 24, 2013: GlaxoSmithKline has become embroiled in a corruption probe concerning some of its Chinese staff and FT April 2, 2014 Big pharma’s rise in China not held back by scandals and Chinese woe for GSK, The Times, 5 April 2014
- 63.
ITV news at 10 pm, 10 May 2013:
https://www.youtube.com/watch?v=B9kwBxXXXCs&list=PLvDyxtKlIcnhWNg8UevNidThqmxxtj9kU
- 64.
Novartis Foundation—Klaus Leisinger 10/4/2011: http://www.youtube.com/watch?v=9drMaDVg2eY
- 65.
- 66.
Source: WHO 2008
- 67.
GSK: Evolving our business model- https://www.youtube.com/watch?v=j1uWVMOlhdw
- 68.
Regulatory News Service, Apr-22-2014:GSK announces major transaction with Novartis. It was expected to complete during the first half of 2015
- 69.
The deal included Novartis’s promising new Bexsero vaccine for meningitis B, but excluded flu vaccines
- 70.
Regulatory News Service, Apr-22-2014: GSK announces major transaction with Novartis.
- 71.
These revenues would be split across Pharmaceuticals 62%, Consumer Healthcare 24%, and Vaccines 14%, (FT 22/04/2014: Novartis buys GSK business for up to $16bn http://www.ft.com/cms/s/0/2bc1c1c0-c9e6-11e3-ac05-00144feabdc0.html#ixzz2ziPC13dI)
- 72.
FT 26/04/2014
- 73.
Pharmaceuticals Industry Profile: Global, April 2014, 1–33, MarketLine
- 74.
Pharmaceuticals Industry Profile: Global, April 2014, 1–33, MarketLine
- 75.
Ibid.
- 76.
IMS health 2011
- 77.
Source –Kresse and Shah, 2010)
- 78.
According to the pharmaceutical industry, it cost around $1 billion to bring a new drug to market and the average time from discovery to approval of new medicine was 13 years, with a success rate of less than 5%. Source US National Institute of Health
- 79.
Source: J. Mestre-Ferrandiz, J. Sussex and A. Towse, The R&D cost of a new medicine, Office of Health Economics, December 2012
- 80.
FT April 25, 2014 Drug innovation: In the recovery room
- 81.
HIV medicines – technology and market landscape, UNITAID, March 2014
- 82.
Global update on HIV treatment 2013: results, impact and opportunities published by UNAIDS, the WHO and UNICEF in June 2013
- 83.
Ibid.
- 84.
In 2012, an estimated US$ 18.9 (16.6–21.2) billion was available for HIV programmes in low- and middle-income countries; GLOBAL REPORT UNAIDS report on the global AIDS epidemic 2013. Care and treatment services consumed more than half (55%) of HIV expenditure in 2012, while prevention programmes represented 19% of HIV spending, 12% was spent on programme management and administration. Source: GARPR 2013
- 85.
Price of a WHO-recommended one-pill-a-day first-line combination (tenofovir/lamivudine/efavirenz)
- 86.
zidovudine/lamivudine + atazanavir/ritonavir
- 87.
- 88.
Untangling the Web of ARV Price Reductions, released July 2013 by the international medical humanitarian organisation Médecins Sans Frontières/Doctors Without Borders (MSF) at the International AIDS Society conference in Kuala Lumpur, http://www.msf.org.uk/article/hiv-generic-competition-pushing-down-drug-prices-patents-keep-newer-drugs-unaffordable
- 89.
Under the 2010 WHO guidelines, 61% (57–66%) of all persons eligible
- 90.
- 91.
reported at the 2012 XIX International AIDS Society conference
- 92.
the annual number of newly infected children in 2012 was 260,000 (230000–320,000) in low- and middle-income countries, 35% lower than in 2009; GLOBAL REPORT UNAIDS report on the global AIDS epidemic 2013
- 93.
GLOBAL REPORT UNAIDS report on the global AIDS epidemic 2013
- 94.
HIV medicines – technology and market landscape, UNITAID, March 2014
- 95.
Ibid.
- 96.
Ibid.
- 97.
GLOBAL REPORT UNAIDS report on the global AIDS epidemic 2013
- 98.
HIV medicines – technology and market landscape, UNITAID, March 2014
- 99.
HIV treatment guidelines provided by the WHO (WHO), issued in June 2013, recommended starting treatment when an individual’s CD4 count fell below 500 cells/μL and immediately for pregnant women, HIV-positive partners in serodiscordant couples, children younger than five and people with HIV-associated tuberculosis and Hepatitis B.
- 100.
HIV medicines – technology and market landscape, UNITAID, March 2014
- 101.
Nearly 15 times the price of first-line treatment. Untangling the Web of ARV Price Reductions, released July 2013 by the international medical humanitarian organisation Médecins Sans Frontières/Doctors Without Borders (MSF) at the International AIDS Society conference in Kuala Lumpur, http://www.msf.org.uk/article/hiv-generic-competition-pushing-down-drug-prices-patents-keep-newer-drugs-unaffordable
- 102.
- 103.
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Smith, N.C., Jarisch, D. (2019). GSK: Profits, Patents and Patients: Access to Medicines. In: Lenssen, G.G., Smith, N.C. (eds) Managing Sustainable Business. Springer, Dordrecht. https://doi.org/10.1007/978-94-024-1144-7_8
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