PREFERENTIAL PRICING
GSK recognises that it has a responsibility to make its products as affordable as possible in the poorest countries. We have offered our vaccines to public health programmes at significant discounts for over 20 years. We set a single, sustainable, not-for-profit preferential price for each of our antiretrovirals ARVs) and anti-malarials to a wide range of customers in the Least Developed Countries and sub-Saharan Africa – a total of 63 countries. These customers include the public sector, not-for-profit NGOs, aid agencies, UN agencies, and international purchase funds such as the Global Fund to fight AIDS, TB and Malaria. We also extend our offer of not-for-profit prices on ARVs to employers in sub-Saharan Africa who provide care and treatment through workplace clinics and similar arrangements.

GSK is committed to contributing to health improvements in a sustainable manner, so we set our preferential prices for ARVs and anti-malarials at levels that cover direct costs but on which we do not make a profit. In this way we can offer these prices for as long as patients need treatment⁸.

We have pledged to pass on cost efficiencies as shipments to the developing world increase. For instance, in September 2002, we further reduced the not-for-profit preferential prices of our HIV/AIDS medicines by up to 33 per cent and our anti-malarial medicines by up to 38 per cent⁹.

By the end of 2002, we had secured 124 arrangements to supply preferentially-priced ARVs to 50 countries. This includes 49 arrangements made during 2002. These arrangements are with a wide range of stakeholders, including governments, NGOs, public hospitals and employers such as Heineken and Anglo American, with whom we commenced partnerships in 2002.

As a result, we increased shipments of Combivir to the developing world from 2.2 million tablets in 2001 to nearly 6 million tablets in 2002 – the equivalent of about 3 million daily doses. These figures exclude the product destined for patients in Africa which was diverted back to Europe. The victims of this trade are HIV/AIDS patients in Africa and the only beneficiaries are the illegal importers. GSK has introduced special ‘Access’ packs to make this illegal trade more difficult. We look to regulatory authorities and our customers to also take measures to prevent diversion.

GSK’s ability to provide preferential prices to the developing world requires a sustainable framework. Our commitment to preferential pricing must be combined with commitments from others to prevent product diversion and to avoid referencing developed country prices against preferentially-priced medicines. Clearly diversion threatens this framework.

Additionally, in 2002, we started small-scale shipments of a wider range of preferentially-priced products to the five pilot projects we have in partnership with NGOs in Tanzania, Uganda, Nigeria, Zambia and Malawi. These projects are designed to assess the impact of preferential pricing for a broader range of products.

COMMUNITY INVESTMENT PROGRAMMES
We have a wide range of partnerships in the developing world. Our focus is on health and education programmes for under-served communities around the world¹⁰. In 2002, GSK invested over £12 million in its public health programmes.

Our partners range from the World Health Organization and the World Bank to local schools and community-based organisations. Where possible, we ensure that our programmes are sustainable and can be repeated in communities with similar needs.

Our programmes comprise major initiatives in public health, support for education, product donations, and support for employee involvement activities.Our public health programmes, for example, include:

The Global Alliance to Eliminate Lymphatic Filariasis – GSK is a key partner in the global effort to eliminate lymphatic filariasis (LF), also known as elephantiasis. This is a disabling and disfiguring disease that currently affects 120 million people, and threatens a further one billion, in some of the poorest nations of the world ¹¹.

GSK is a founding member of the partnership that includes the World Health Organization, the Ministries of Health of the LF-endemic countries, and 40 organisations in the public, private and academic sectors. GSK donates its antiparasitic drug albendazole, one of three drugs used to stop transmission of the disease. Over the anticipated 20-year life of the programme, this commitment will build to an estimated six billion tablets as more countries join. In addition, we provide significant financial resources and staff expertise to support coalition-building, advocacy, research, community mobilisation, and educational initiatives.

In 2002, the fourth year of the programme, 66 million tablets (worth £8.7 million) were donated to 31 countries, bringing the total number of albendazole tablets donated to date to 145 million. Grants totalling £750,000 were also made. A huge mobilisation of effort is required for the fight against LF. This is exemplified by the more than 45,000 health workers and volunteers in Sri Lanka who worked together to deliver preventative medicines to 9 million people in a single day in July 2002.

Positive Action programme – In 2002, GSK’s international programme of HIV education, care and community support, backed 25 international programmes in 32 countries¹². Activities funded by Positive Action support the two-year ‘Live and Let Live’ World AIDS Campaign launched by UNAIDS on World AIDS Day 2002. For example, Positive Action-funded studies by the International Center for Research on Women, conducted in Ethiopia, Tanzania and Zambia, have confirmed that societal discrimination based on HIV fuels the spread of AIDS. Positive Action also announced funding for new community initiatives in Kenya and Mexico¹³. During the 14th International AIDS Conference, held in Barcelona in July 2002, Positive Action contributed over £90,000 to support attendance and participation of community representatives from under-resourced regions.

The GSK France Foundation – supports programmes that prevent the risk of vertical transmission of HIV; provide medical care, monitoring and treatment; and improve access and quality of care for people living with HIV. In 2002, the Foundation supported 13 programmes involving 42,000 people as part of a four year £1.3 million commitment in eight African countries¹⁴.

African Malaria Partnership (AMP) – in November three organisations were selected to share grants totalling £1.0 million over three years under the AMP. Through this programme, GSK is funding behavioural development initiatives to combat a disease that kills over one million people every year. In total nearly two million people will be reached by the programmes in the seven countries involved¹⁵.

8 www.gsk.com/about/nfp_pricing_guide.htm 9 www.gsk.com/press_archive/press_09052002.htm 10 www.gsk.com/community/index.htm 11 www.gsk.com/filariasis/index.htm 12 www.gsk.com/positiveaction/index.htm 13 www.gsk.com/press_archive/press_11282002.htm 14 www.gsk.fr/gsk/fond/mp.html 15 www.gsk.com/malaria/index.htm