GSK overhauls patent policies for low-income countries to spur generics

GlaxoSmithKline ($GSK) plans a radical shift in patent policy that seeks to encourage copies of its medicines in poor countries, widening access and possibly diminishing calls for compulsory licenses or other challenges based on price.

In focus are low-income and the least-developed countries numbering 85 nations as well as another 51 lower-middle-income countries such as Vietnam where licenses would be granted to generic manufacturers to sell products in return for royalty payments, according to a company release.

The announcement shows that while CEO Andrew Witty is slated to leave his post in early 2017, he remains on track to implement a new vision for sales and marketing that was seen as the source of tension with the board and investors who wanted more aggressive financial strategies including a breakup of the company.

GSK CEO Andrew Witty

Witty however has been insistent that the way drugs are made and sold will change drastically in the coming years and the company needs to be in the forefront, especially in developing countries where volume is key.

"Intellectual property protection is a vital part of healthcare innovation, providing necessary incentives for investment in research to create new treatments which can help people around the world," he said in a statement.

"In itself, IP is not a barrier to access to medicines. However, we recognise that the global healthcare challenge requires us to be flexible in our approach and responsive to different needs, particularly as the disease burden shifts from infectious to non-communicable diseases. We continuously look at ways that GSK can further contribute to increasing access to medicines."

"The changes we are setting out aim to make it as clear and simple as possible for generic manufacturers to make and supply versions of GSK medicines" in poorer nations.

The news is particularly interesting for India which is battling Big Pharma over claims it uses compulsory license provisions too freely and recently denied claims by the U.S.-India Business Council that it would stop the practice in order to reassure overseas companies of its commitment to protecting IP.

Filing patents in many countries is standard for multinational pharmas, but Witty called it a "patchwork" approach that just made access harder.

"By doing this we're taking away one potential issue or excuse … which is that generic companies hold back because they don't know what intellectual property exists," he said.

Witty also pointed to China where GSK's ViiV Healthcare unit last year signed a deal to have Shanghai-based Desano Pharmaceuticals manufacture HIV therapy Tivicay (dolutegravir) with speculation that a cheaper version in the Middle Kingdom could make it to reimbursement this year on a list not updated since 2009.

- here's the release from GSK
- and a take from the WSJ (sub. req.)