Corporate Responsibility of Pharmaceutical Companies under conditions of market failure and failing...

Corporate Responsibility of Pharmaceutical Companiesunder conditions of market failure and failing states

Third International Conference for Improving Use of Medicines,

Antalya November 15th, 2011

Klaus M. LeisingerNovartis Foundation for Sustainable Development

The social and economic context

Despite significant progress made in poverty alleviation and health-related Millennium Development Goals achievements

2.5 billion people continue to live in poverty (US$ 2.50 per day), thereof about 1.4 billion in extreme poverty (US$ 1.25 per day);

Their living conditions are characterized by nutritional deficiencies, lack of access to safe water and sanitation, squalid housing, insufficient knowledge about health, lack of access to preventive and curative medical services and lack of access to safe medicines, lack of voice and visibility – therefore lack of political power;

Due to neglected tropical diseases alone, • millions of children, women and men die prematurely,

• the number of disability-adjusted life years is in the dozens of millions, and

• the economic burden adds up to an amount beyond US$ 15 billion per year.

| Antalya ICIUM lecture| Klaus M. Leisinger | November 2011

Good health has a lot of influencing factors......and many stakeholders contributing to health care and prevention

Source: Dahlgren G. / Whitehead M. (1991): Policies and strategies to promote social equity in health, Stockholm


The societal context

People all over the world rate “health” as one of their top personal concerns;

For people living in low-income countries HIV/AIDS, tuberculosis, malaria and other infectious diseases rates are most important (> 5 mio deaths p.a.), along with malnutrition, access to clean water, access to medical care, above all ante-natal, peri-natal and postnatal care;

Pharmaceutical products (medicines and vaccines) play an important role – along with well-trained and motivated staff medicines are the most important means available to prevent, alleviate and cure illnesses;

Lack of access to essential medicines and vaccines is seen to result in more than 10 million premature deaths;

Many NGOs and civil society media see patents and prices to be the most important obstacles for the access to medicines.

The access to medicines debate is a political debate, using methods and techniques of the political communication, including agitation;


“Health” as an international political subject-matter:UN Millennium Development Goals

The Millennium Development Goals (MDGs) were adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000.

Goal 1: Eradicate extreme poverty and hunger Goal 2: Achieve universal primary education Goal 3: Promote gender equality and empower women Goal 4: Reduce child mortality Goal 5: Improve maternal health Goal 6: Combat HIV/AIDS, malaria and other diseases Goal 7: Ensure environmental sustainability Goal 8: Develop a Global Partnership for Development

... to be achieved by 2015.


Be successful in the core competencewith integrity and comply

with applicable laws and regulations

Corporate Responsibilitybeyond legality:

Legitimacy in thespirit of international norms

Corporatephilanthropyand pro bono

work

Desirable(can)

Expected(ought to)

Essentials(must)

Corporate responsibility excellence

Good management practices

What are companies competing with integrity responsible for?


Corporate responsibility challenges Market failures and failing states

Who is in charge if markets fail due to the lack of purchasing power of patients and / or the state authorities not able or willing to deliver a basic package of primary health care goods and services?

Under which conditions can a pharmaceutical company be expected to do what for whom until when?

What is “appropriate” in a world with 2.5 billion people living in absolute poverty? How much is enough? Who has the legitimacy to determine this?

What medicines and vaccines should be offered with differential pricing?

What is a “fair” proportion of research dedicated to neglected diseases?

What would a “Stakeholder-Solution-Team” consist of, given the dimension and complexity of the global health problems?


Access to medical care : A complex and multi-dimensional issue

Obrist B. et al. (2007): Access to health care in contexts of livelihood insecurity: A framework for analysis and action. In: PLoS Med 4( 0): e308.doi: 0. 37 /journal.pmed.0040308

Are there enough points of care to serve the population? Do drug supplies suffice?

What is the geographical distance between points of care and the homes of intended users?

Do the prices of services match patients‘ ability to pay?

Does the organisational set up meet patients‘ needs and expectations?

Does the information and treatment provided take local values into account?


Differential (preferential) pricing;

Licensing for market failure;

Corporate philanthropy incl. donations;

Pro Bono research;

Screening of patent library;

Project and program co-operation with development institutions;

Management support (Human Resources, logistics, etc.);

Other innovative and creative private sector skills and methods as well as innovative business models.

Corporate responsibility tool box for „Access to Medicine“


Political and Economic Preconditions for Differential Pricing

preferential prices (and donations!) can only benefit poor patients in the context of a functioning health care and supply system;

market segmentation and separation must be possible to prevent leakage of products that are offered at low prices to the poor into the “normal” market of insurance covered and well-to-do patients;

Differential prices must not be used as benchmark for reference price regulation schemes in industrialized countries;

Acceptance of governments, health insurances and patients in high-income counties for preferential pricing in low-income countries;

more (international) resources are needed even if all medicines would be given away at preferential prices.



Differential Pricing Controversial Issues

DifferentialPricing

· For what products? · For countries or for patients? · Who controls proper access?

Donations

Pro Bono Research

Constructiveuse of patents

· What products? · For Whom? · How long?

· What diseases?· Also Improved efficacy / side effect profiles?

· Access to patent library?· What products?· Who develops the medicines?

Example of stakeholder network for the supply of the anti-malarial Coartem

Procurement UNICEF

WHO

NGOs

Others

Funding organizations Global Fund (G8 countries)

UNITAID

USAID / US President‘s Malaria Initiative (PMI)

Artemisinin sourcing Chinese partners

External Chemical production

(USA, China)

Development and regulatory

WHO• Roll Back Malaria

Medicines for Malaria Venture (MMV)

Swissmedic

Local regulatory bodies

FDA

EMEA (European Medicines Evaluation Agency)

NovartisMalaria Initiative

Recipient countries Local ministries

National Malaria Control Program

Key opinion leaders

Media Key journalists

Complex issues require „multi-stakeholder-solution teams“

Different actors in society have different resources, skills, experience and networks: International community, national governments, local and international NGOs and the private sector

The entirety of all brought together in a constructive way is the best precondition for innovative and sustainable solutions.

Our overall experience is positive. (ICATT: WHO, Swiss Tropical & Public Health Institute, Sirius; Leprosy Work: WHO,

leprosy NGOs, etc., ACCESS:Swiss Tropical & Public Health Institute, Ifakara Health Institute, district authorities, Millennium Villages: UNDP, Millennium Promise, Millennium Villages Project)

Back up


Health-related projects of the Novartis Foundation for Sustainable Development

| Access to Medicines UC Berkeley| Klaus M. Leisinger | October 2011


Saved 10’000s of lives, particularly of children under 5, and improved livelihood of millions of people in low-income countries;

Contributed with new concepts towards bringing leprosy down from about 13 million patients in 1985 to less than 220’000 (2010) and helped to cure more than 5 million leprosy patients, preventing more than 4 million disabilities;

Developed innovative “Access to Medicines” systems (e.g. patient-based TB therapy) and did innovative research on obstacles to access (e.g. Malaria);

Developed and field-tested innovative “bare foot health insurance” as well as computer-based learning and diagnosis program for IMCI;

Developed and scaled up psychosocial support programs for vulnerable children;

Developed and field-tested performance-based funding system, measuring outcome rather than input;

Are in the process of setting new benchmark for telemedicine in Africa.

Overall results of the Novartis Foundation health projects and programs

In 2010 Novartis supported more than 85 million patients with access-to-medicine programs

1Novartis Institute for Tropical Diseases; 2Novartis Vaccines Institute for Global Health; 3Based on approximate market value

2010

Programs and research valued

at USD 1.5 bn

Coartem® subsidized > 82 million treatments shipped – cumulatively delivered > 380 million treatments, helping to save about 950,000 lives of mostly children under 5 years

Leprosy medication free of charge> 5 million patients cured since 2000

Tuberculosis medicine donations500,000 treatments committed, 50% delivered

Glivec® patient assistanceFree to >37,000 patients in about 80 countries

NITD1 in SingaporeFocus on tuberculosis, dengue fever and malaria

NVGH2 in Siena, ItalyVaccines research institute for neglected diseases

| Access to Medicines UC Berkeley| Klaus M. Leisinger | October 2011

We are helping to make a differenceKey indicators are showing progress

2004

* Estimate** 2009***2008

Every 30 secondsChildmortality

Every 45 seconds***

Malaria Cases

225 million**243 million

12 countries served

Coartem®deliveries

Patient shareof ACT market

Countriesserved

30% ACT market share 50% ACT market share*

60+ countries served

Average priceper treatment

USD 1.57 per treatment Price for public-sector buyers has dropped by over 50%

82 million treatments4 million treatments

2010

Novartis Malaria Initiative | June 201118

Tuberculosis(Prevalence/100,000 – WHO 2004)

Dengue Fever(Incidence/100,000 – WHO 2005)

NIBR Efforts to Address Medical Needs in the Developing World: Infectious Disease Examples (1/2)

Malaria(Prevalence/100,000 – WHO 2004)


<1>250Known risk

<25>25000

<50>1000

Infectious Diarrhea

(Mortality rate/100,000- WHO 2002)

1-5>100

Chagas(Prevalence/100,000 – WHO 2002)

<1000>6000

Typhoid Fever(Incidence/100,000 – WHO 2004)

>10010-100<10

Malaria TBInfectious Diarrhea

Dengue Fever Typhoid FeverChagas Disease

Incidence250 million (Tropics, mostly Africa)

9 million (Developing World)

2.5 billion children(Dev World)

50 million(Tropics & Subtropics)

16-33 million(Developing World)

10 million(mostly Latin America)

Mortality (per year)

1 million(mostly children)

1.3 million (often AIDS patients)

1.6 million children (3-5 million total)

>100,000 (mostly children)

>200,000 (mostly children) >10,000

Organism Plasmodium Myco-bacterium

GI bacteria (incl. cholera) Flavivirus Salmonella Trypano-soma

Medical need/issue

Drug resistance (incl. Coartem)

Multi /extensive drug resistance;treatment length;HIV co-infection

Drug resistance; rapid dehydration

No effective treatment for hemorrhagic fever

Drug resistance;no pediatric vaccine (<2yrs)

No available treatment for chronic disease

CollaborationNITD, GNF & two European Research Centers

NITD, GNF & TB Alliance, NIAID Grand Challenges in Global Health (GC11) grantees

NIBR (RESP) & OneWorldHealth

Singapore Dengue Consortium (incl. NITD)

NVGH NIBR (ID), NITD and GNF

Outside Funding

MMV, Wellcome Trust & Singapore Gov

Gates Foundation & GC11 Grant

Gates Foundation

Singapore Government & Novartis Foundation

Wellcome Trust, Gates Foundation, Local Gov & Siena Foundation

NIH & Drugs for Neglected Disease initiative

Research Status

Drug candidate NITD609 entering clinic

Compound discovery

Lead optimization

Compound discovery

Vaccine vi-CRM197 in Phase II trials

Screening & biomarker discovery

NIBR Efforts to Address Medical Needs in the Developing World: Infectious Disease Examples (2/2)


Why become involved in health and access issues beyond the conventional business model?

Because it is the right thing to

do!

You cannot have a first class economic performance and be perceived not to care about preventable mortality and morbidity, predominantly in children under 5 years of age.


Plausible arguments for a “Business Case”

Engagement in corporate responsibility for the achievement of the health-related UN Millennium Development Goals mainly depends on top-management’s normative thinking. But

Saving lives, curing patients and preventing illness by providing innovative solutions is also likely to

Engender employees’ motivation and identification;

Enhance the attraction of the corporation as a partner for cooperation, ethical investment, excellent people, and critical customers);

Be positive from a political point of view as being “part of the solution” of one of the most difficult social issues ought to trigger good will and overcome negative stereotypical thinking.


Corporate Responsibility of Pharmaceutical Companies under conditions of market failure and failing...

Documents

Transcript of Corporate Responsibility of Pharmaceutical Companies under conditions of market failure and failing...