The corridors of power...
It is depressing to think that anyone would seek to profit from the AIDS epidemic in Africa, yet this is precisely the problem faced by GlaxoSmithKline.
As the leading maker of anti-retroviral drugs, the global drugs giant has led the way in supplying cheap pills to third world countries.
GSK has been supplying HIV drugs to African countries at cost -ð effectively, £10 for a monthly course of Combivir, its leading HIV product. The same course costs about £320 a month in the UK.
The mark-up has proved an overwhelming temptation to profiteers, who intercept the drugs in Africa and channel them back for sale in Europe. GSK has smashed several such rings, but the drugs are still getting through. Now it has come up with the idea of dyeing ‘at cost’ pills red to distinguish them.
It is easy to knock pharmaceutical companies, but they are doing some good. JP Garnier, GSK’s chief executive, told me that GSK gave away £550m in the last financial year in donations, cash and free drugs for the poor. The sum is equal to 5.4% of GSK’s profits ð five times more than the average multinational.
Garnier personally signed off $1bn to be spent over 20 years immunising 1.5 billion people against elephantiasis, that nasty, disfiguring tropical disease.
He cites this as ‘probably the most important thing I’ve done in my career as CEO’. Yet he is the first to admit that ‘pharmaceutical company does good’ is not the sort of thing that makes the headlines.
The 2003 shareholder row over Garnier’s remuneration raised questions about how much any one man is worth to an organisation. Yet GSK deserves some credit for its philanthropic activities. It’s not just about buying PR.
Jon Ashworth is business features editor at The Times