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Intellectual property

Corporate Responsibility Report 2008

Intellectual property

Intellectual property (IP) refers to creations of the human mind. There are laws in most countries to stop those creations being used by others. These include patents, copyrights and trademarks.

At an international level, IP is protected through the World Trade Organization’s (WTO) Trade Related Aspects of Intellectual Property Rights Agreement, commonly known as TRIPS.

Patents and other IP rights play a vital role in encouraging the innovation needed to develop new treatments for many of the most serious and life-threatening diseases. We invest considerable time and money to develop each new pharmaceutical product - an average of $1.2 billion¹ and 10-12 years per product. For every 5,000 to 10,000 compounds tested, an estimated five reach clinical trials and only one reaches the market².

If a new product could immediately be copied and sold by others, we would not be able to continue to fund new research. This would discourage innovation and limit research into newer and better medicines and vaccines.

In relation to the healthcare crisis in the developing world, intellectual property, specifically patents, has been criticised for two broad reasons. Opponents claim that:

The market-driven IP-based R&D system has led to a mis-prioritisation of R&D resources. This means that R&D prioritisation is based on developed world market opportunities rather than on unmet medical need. This has led to an R&D deficit into diseases of the developing world
IP has acted as a barrier to access. This has two facets: firstly patents have led to monopoly pricing and have prevented generic competition being able to drive prices down. Secondly, patents have acted as a barrier to follow-on innovation such as the development of fixed-dose combinations

We believe that these concerns have been overstated, but we recognise that we need to seek new approaches to IP to help tackle the healthcare crisis. We believe that the IP system is compatible with R&D into diseases of the developing world. GSK and others in the industry have expanded research into neglected diseases in recent years. In November 2008 the international trade association, the IFPMA, published data that showed that the number of medicine and vaccine projects undertaken by companies with product development partnerships or on their own had increased to 67, up from 58 in November 2007³.

We believe that patents are a minor issue in preventing people in the developing world from getting access to medicines. There is little or no patent protection for many vital medicines such as treatments for malaria, tuberculosis and diarrhoeal diseases, which kill millions of people a year. Over 95 per cent of the medicines on the World Health Organization’s (WHO) Essential Medicines List are not patent protected anywhere in the world, yet the WHO says that one-third of the world’s population does not have regular access to these drugs. In Africa and parts of Asia this figure rises to two-thirds of the population.

Poverty is the biggest barrier to effective healthcare in the developing world because it is usually associated with a poorly developed healthcare infrastructure with little or no access to doctors and hospitals. The significant barriers that stand in the way of access to medicines in the developing world must be tackled as a shared responsibility by all sectors of global society.

However, traditionally we have only allowed access to our intellectual property in very controlled situations. We are now exploring ways to be more flexible with our intellectual property that relates to neglected diseases.

IP’s primary objective is to incentivise and reward research. However, there are a number of neglected tropical diseases, such as leprose and cholera, where there is a serious lack of research, for a variety of complex reasons. We need to explore how to address this gap, including the use of IP.

One approach might be for a patent pool to encourage more research into neglected tropical diseases. GSK is placing over 500 granted patents and over 300 pending applications, relating to approximately 80 patent families, in a pool to help others to develop potential medicines for neglected diseases. In addition to providing access to these patent filings, GSK will set out a mechanism to enable third parties to request access to other intellectual property and know-how about its medicines which may help researchers to develop new medicines for neglected tropical diseases.

The aim of any such pool must be to encourage research that would otherwise not happen. If, as we hope, something new comes out of such research, then the full benefits must go directly to the LDCs. Such a pool has to be voluntary, so as to foster an atmosphere of cooperation and to encourage others to join.

A pool is one mechanism we are exploring to achieve these aims. We will also consider new ways of stimulating research.

We will continue to defend our IP robustly outside the pool. Our business is sustained through being rewarded for the discovery and development of innovative medicines. However, in the poorest countries we plan to be much more flexible and will develop our work in this area throughout 2009.

Intellectual property laws can help prevent the distribution of counterfeit products, which present a serious health risk for patients.

1. Tufts Center for the Study of Drug Development

2. Pharmaceutical Industry Profile 2008, Washington DC, PhRMA March 2008

3. www.ifpma.org/News/NewsReleaseDetail.aspx?nID=10975