Company lobbyist joins Oxfam campaign for cheaper HIV drugs

A former lobbyist for SmithKline Beecham on Tuesday accused pharmaceutical companies of burying their heads in the sand over the price of HIV drugs while 20,000 people die of AIDS every month in South Africa.

“That is a situation that would not be allowed to continue in the northern hemisphere,” said David Earnshaw, who left SKB as part of the merger with Glaxo and now runs Oxfam’s European campaign for affordable drugs in developing countries.

Earnshaw told Reuters Health in a telephone interview that industry efforts to make HIV drugs more widely available in developing countries have failed to do more than scratch the surface. Only a few hundred people in countries like Mali, Senegal and Uganda have gained access to therapies, while there are 36 million people living with HIV and AIDS in Africa.

The former SB director of government affairs and public policy warned: “If the industry does not change, the international community will act against it by attacking intellectual property protection. Even today, it would be a remarkably brave company that attempted to defend its patents in Africa.”

Earnshaw said companies had “completely mishandled the [drug pricing] issue in developing countries, kept their heads in the sand and refused to change.” The industry’s reputation had sunk and it was now in the bizarre position of “trying to fight the world.”

The solution does not require philanthropy “simply a new business model based on low prices and high volumes coupled with guarantees to stop cheap products being re-exported to the developed world.”

Drugs were currently sold at between 20 to 100 times their marginal cost. This implies that prices could be cut up to 100-fold, he said. “If you get down to this kind of price reduction, just think how many millions get your product. It would be a win-win situation for the pharmaceutical industry.”

Earnshaw said the industry’s refusal to improve on its offer to cut HIV drug prices by more than 90% was an “instinctive response” that had to change. “We need to move towards some kind of price-setting mechanism for developing countries.” He said the major firms would then have to compete with generic drug manufacturers, such as Cipla, which is now offering HIV therapies for 350 dollars a year. Eventually, however, he hopes money from international agencies will be made available to help developing countries purchase medicines.

Earnshaw insisted his beliefs about the price of medicines were not new and added: “I don’t think that your values are determined by the organisation that employs you.”

He pointed out that he first suggested the low-price, high-volume model in a speech in 1999 while still working for SB. Since then, he said, GlaxoSmithKline’s CEO J.P. Garnier had “said broadly the same thing.”

The problem was that the pharmaceutical industry lives in a “remarkably comfortable cocoon in which change happens very slowly, in which people are worried about speaking out and where there is bureaucratic inertia.”