Pharmaceutical companies will on Monday be told by their shareholders to do more to help improve the health of the developing world.
They will also be warned that they are not ready to face the coming demand for drugs for diseases other than Aids.
The Pharmaceutical Shareowners Group (PSG), which brings together 14 big international institutional investors, such as Legal & General and Schroders, has spent a year investigating the policies and plans of seven of the leading drug companies.
It considers that the industry has done just enough to deflect criticism over the cost of Aids drugs in poor countries — which caused it a great deal of damage — but is not prepared for future crises over drug shortages in the developing world.
The furore over the court case brought by 39 drug companies in 2001 to try to stop the South African government obtaining drugs from countries where they were cheaper, followed by the World Trade Organisation negotiations over patents which keep drug prices high, has brought about ”marked shifts in societal perceptions” about the industry.
”A view has emerged that pharmaceutical companies have not been playing their part in tackling the public health crisis,” the group says.
The shareholders were concerned that this negative view would damage the reputation of the industry and affect its ability to ask high prices for its drugs in the developed world.
The drug companies came to the same view, says the group’s report, and now believe they have to make a ”proactive response”.
The report says many of the companies have made ”considerable progress” — although it is only in the last year or two that senior management has been involved and issues in the developing world have become part of the core business. It praises GlaxoSmithKline and Merck, which cut their Aids drug prices in poor countries and launched other programmes to help with diseases in developing countries.
But although the industry thinks it has done enough and is no longer on the back foot, and although the main focus has returned to governments, the shareholders are still concerned that the drug companies are only reacting when crises develop.
The growing power of emerging markets such as Brazil and China, the continuing impact of Aids, and the increasing numbers in the developing world affected by diseases typical of rich countries, such as heart disease and cancers, mean that ”the public health crisis in emerging markets is going to become a greater challenge year on year,” says the report. ”We did not hear a convincing story that the sector is ready for this.”
Jo Allen, PSG chair and head of engagement strategy at the Cooperative Insurance Society, said it welcomed the progress that had been made. ”However, we think that all companies could do more.”
Daniel Berman, of Médecins sans Frontières, which has exerted considerable pressure on the drug companies to cut their prices in poor countries, is not impressed. While the report suggested the industry could be in danger of breaking the social contract with society, ”our perspective is that they have already broken that contract”.
MSF would like to see governments force the drug companies to lower their prices consistently across the board — not just for certain drugs in certain disease areas, he said.
Yet the big drug companies were only reluctantly beginning to talk to new not-for-profit organisations about potentially useful drugs that might be languishing undeveloped on their shelves. – Guardian Unlimited Â