By Kevin E. Noonan —

As we have noted in the past, the World Trade Organization (WTO) and Trade-related Aspects of Intellectual Property Rights (TRIPS) portion of the General Agreements on Tariffs and Trade (GATT) have not resulted in the general reverence for intellectual property protection intended by Western countries in the developing world, particularly with regard to pharmaceuticals (see "Not Getting It about Patented Drug Prices at The Wall Street Journal").  In particular, the combination of the Doha Declaration of 2001 and compulsory licensing provisions in national TRIPS implementing laws have created a crisis for Western pharmaceutical companies, who have seen the trend for compulsory licensing, or the threat of such licenses, expand from anti-AIDS drugs to other drugs less relevant to "national medical emergencies," to where the levels of protection may be lower in the post-TRIPS world than they were before the GATT treaty was signed.

Western drug companies bear part of the responsibility for this state of affairs, being (up until now) unwilling to address this real threat to their continued viability (and capacity to develop new drugs) in any coordinated way.  This paralysis may be changing, however, in view of remarks by Andrew Witty (at right), CEO of GlaxoSmithKline, to an audience at Harvard Medical School on February 13th.  In an address entitled "Big Pharma:  A Catalyst for Change," Mr. Witty squarely faced facts:  34 of the 50 poorest countries are in Africa, he said, and these countries were burdened with 24% of human disease.  He seemed to recognize what has been evident for some time:  that drug prices are the key motivator for governments in the developing world to grant compulsory licenses.  It would thus be prudent for Western drug companies to lower their own prices and thus blunt, if not forestall, the generic companies' justifications for government action.  There have been instances when this has happened (see, e.g., "Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing"), but there has been no coordinated effort by Western drug companies to develop a strategy around drug pricing in the developing world to address the compulsory licensing issue. 

Mr. Witty set forth four commitments directed to these concerns:

While forward-looking, Mr. Witty was able to cite existing GSK programs on malaria vaccines (the PATH Malaria Vaccine Initiative) that are entering Phase III clinical trials.  Should the vaccine successfully complete the trial, Mr. Witty said GSK needs "to make sure nothing gets in the way of access" to the vaccine for the children who "are among the poorest in the world."  He envisioned an international partnership to "mobilize the resources to pay for [the vaccine] and the infrastructure to deliver [it]."  

Other Western drug companies have proposed similar, more limited or focused efforts before.  GSK's commitment is reminiscent of Monsanto's proposal to use its technology to address world hunger (see "Monsanto Moves to Address World Food Shortages").  It is a bold first step; whether it is ultimately successful will likely depend on whether the remaining innovator drug companies see the benefits of such behavior and act accordingly.  Recent history indicates that such a coordinated strategy will be necessary if innovator drug companies are not to be left with none of the advantages that the TRIPS agreement was intended to have for their industry.