GSK publishes 2009 Corporate Responsibility Report

Issued: Tuesday 16 March 2010, London UK

In its 2009 Corporate Responsibility Report published online today, GSK reiterated its commitment to running its business responsibly and to making the company more responsive, more flexible and more open to the expectations of society.

GSK provided comprehensive details on a wide variety of its activities including raising ethical standards, increasing transparency in clinical research, improving access to medicines and enhancing research into neglected tropical diseases. For the first time, GSK also provided examples on how it is implementing its 2009 pledge to reinvest 20% of its profits made in least developed countries back into infrastructure projects. The company also reported an increase in its level of charitable support.

Progress made on commitment to increasing transparency of clinical research

Last year, GSK made a series of commitments to be more open and transparent with its clinical research, pledging to seek publication of the results of all clinical studies as full scientific papers in peer reviewed journals. If a paper is not selected for publication, GSK includes additional information to support scientific interpretation on the company’s Clinical Study Register.

• At the end of 2009, there were protocol summaries of all actively recruiting GSK clinical trials of medicines on the GSK Clinical Study Register, 186 in total.

• There were 3,687 clinical trial results summaries on GSK’s Clinical Study Register. This includes results summaries for observational studies and meta-analyses which evaluate medicines and vaccines.

• The names of the principal investigators participating in GSK-sponsored clinical studies, together with their research institutions, are now included on the Clinical Study Register.

• Speaking and consulting fees paid to US healthcare professionals have been published and data for Europe and other countries will be published during 2010.

• Research payments to healthcare professionals and their institutions will be reported. This will begin with payments in the US for research studies that commence in 2010.

• New standards have been set for funding medical education in the US for healthcare professionals, ensuring that the programmes that are supported bring the greatest improvements to patient health.

Details provided on measures to improve global public health and deliver new and better medicines to patients living in developing countries

GSK has provided more details on how it will form research partnerships and continue to open up its intellectual property and resources to scientists to support new research for neglected tropical diseases:

• GSK has reduced the prices of 11 patented medicines by an average of 45% to improve access in Least Developed Countries.

• 472 million GSK anti-retrovirals have been shipped to the developing world at preferential prices, including 439 million supplied by generic manufacturers licensed by GSK.

• GSK is reinvesting 20% of profits from medicines in Least Developed Countries back into projects that strengthen healthcare infrastructure and help widen access to essential medicines.
  
  First projects include:
• • £167,225 to provide motorcycle ambulances for pregnant women in Sudan.
  • £100,000 for 3 years to provide community-based maternal and neonatal support in Ethiopia.
  • £94,632 to provide water sanitation programmes in Myanmar.
  • £300,000 for 3 years to provide nurse-run clinics in Rwanda.
  • £100,000 for 3 years to improve neonatal and child health in Democratic Republic of Congo.

The report provides details of the launch by GSK and Pfizer of the specialist HIV company ViiV Healthcare, with the aim of delivering new and effective HIV medicines and support communities affected by HIV. In 2009, ViiV Healthcare committed £50 million available over ten years to the Positive Action for Children Fund, to help prevent mother-to-child transmission of HIV and to support orphans and vulnerable children. ViiV Healthcare will also provide £10 million seed funding to support a public - private partnership into the research and development of new HIV/AIDS medicines for children.

The report also notes commitments made in early 2010 to expand access to intellectual property and encourage new research into neglected tropical diseases such as malaria. These build on initiatives previously announced to make relevant patents and know-how available through the knowledge-pool:

• An open lab established at GSK’s Tres Cantos research facility with £5m seed funding for new research.

• 13,500 compounds active against malaria to be made freely available.

• New collaborations to share intellectual property for neglected tropical diseases.

• Pledge to create sustainable pricing model for the world’s most advanced malaria candidate vaccine.

Flexible pricing strategy to increase access to medicines and vaccines for patients in middle income countries (MICs)

In the report, GSK has outlined the principles of its strategy to extend its flexible pricing approach in middle income countries to improve the affordability of its medicines and vaccines, and therefore increase access for patients. This will also contribute to sustainable business growth in these countries.

The principles are:

• Optimising prices so that they reflect the markets’ ability to pay, with poorer countries paying less for medicines than better off countries.

• Introducing differential pricing structures within markets to reach new sectors of the population. This will include doing business with public sector organisations in markets where the company previously only dealt with the private sector.

• Working closely with health authorities and payers to agree innovative pricing programmes that help improve patient access to medicines.

• Closely monitoring prices with local competition.

• Ensuring that reductions in selling prices are passed on to patients where appropriate.

An example provided in the report demonstrates this strategy is yielding significant results in several MICs, where GSK has reduced prices for Cervarix, its vaccine to protect against cervical cancer. In the Philippines GSK reduced the price of Cervarix by 60%, which has resulted in a significant increase in monthly sales, settling at around six times the volume of vaccines sold before the price reduction was introduced. The company is continuing this price reduction strategy for Cervarix in other MICs and on March 5^th reduced the price of the vaccine in Nigeria by 50%.

Charitable support increased to £163m

GSK increased its level of charitable support from £124m to £163m, despite the global economic crisis. The £163m comprises £101m of product donations (valued at average cost of goods), £43m of cash donation delivered through partners, £17m of management costs and £2m of in-kind donations.

The £101m product donations include:

• Over £80m of free medicines provided to almost half a million patients in the US Patient Assistance Program.

• £8m of product donations provided through partners to under-served communities in 96 countries, including people affected by natural disasters in Asia-Pacific.

• Donation of 425 million albendazole tablets (£13m valued at average cost of goods) for the lymphatic filariasis (LF) elimination programme.

Following the outbreak of pandemic flu (H1N1) in 2009, GSK also made a commitment to donate 60 million doses of its H1N1 vaccine to the World Health Organization for use in developing countries.

The GSK African Malaria Partnership awarded four new grants in 2009, a total donation of £1.5m over three years.

GSK also launched the PULSE Volunteer Partnership, an international programme that gives high-performing employees the opportunity to use their professional skills to support non-profit partners for three to six months. From the 2009 intake, GSK had 58 PULSE volunteers working in 18 different countries for 25 non-governmental organisations (NGOs).

The full Corporate Responsibility Report can be found at www.gsk.com/responsibility. It covers responsibility issues including access to medicines, research and business ethics, the environment, employment practices, stakeholder engagement and investment in communities. The report can be accessed directly online or downloaded in full or as a bespoke report from selected pages or sections by using the ‘build your own report’ function.

Notes to editors

• When formulating pricing and other access policies, GSK tends to use three groupings in which there are some overlaps. These are the UN’s list of 49 Least Developed Countries (LDCs), the countries of sub-Saharan Africa (SSA), and middle income countries.

• LDCs and the countries of sub-Saharan Africa are well defined and fairly stable. They are generally where the ability to pay is least, or where the impact of the HIV/AIDS pandemic is most acutely felt.

• For middle income countries, the company normally uses the World Bank categories – lower-middle income and upper-middle income. There is some overlap between the World Bank middle income countries and the LDC and SSA groupings. For example, Angola, Botswana, Cameroon, Gabon, Kiribati, Namibia, Nigeria and South Africa are all classed as middle income by the World Bank.