An Interview with GlaxoSmithKline CEO Jean-Pierre Garnier—Creating New Partnerships and Rules of Engagement
Dr. Jean-Pierre Garnier
July 2004—In our inaugural issue, the TREAT Asia Report interviewed Yusuf Hamied, Managing Director of Indian generic drug-maker Cipla. In this issue, we speak with GlaxoSmithKline's CEO Dr. Jean-Pierre Garnier to learn what the HIV/AIDS landscape looks like from the perspective of pharma.
As CEO of GlaxoSmithKline (GSK), presides over the world’s second largest pharmaceutical company, an annual R&D budget of US$4 billion, and more than 100,000 employees. GSK is also the world’s largest producer and developer of HIV therapeutics.
Before being named CEO of GSK in 2001, Garnier served as CEO of SmithKline Beecham and spent nearly three decades in a variety of leadership roles with SmithKline Beecham and Schering-Plough. A researcher by training, Garnier studied at the University of Louis Pasteur in France and Stanford University in the US.
The TREAT Asia Report spoke to Dr. Garnier about the challenges of developing drugs and vaccines against infectious diseases such as HIV, the role of the pharmaceutical industry in expanding access to treatment, and overall responses to the HIV/AIDS epidemic in Asia and throughout the world.
TREAT Asia Report: What is GSK doing to improve health in developing countries?
Dr. Garnier: GSK is committed to developing products for the whole world. We are the only pharmaceutical company with programs addressing both treatment and prevention of the top three killer diseases in the developing world: HIV, malaria, and tuberculosis. We have discovered 60 percent of the HIV drugs that are on the market today. Our CCR5 antagonist looks very exciting, and we also have other HIV drugs in development. Our second-generation HIV vaccine candidate will begin human trials this year, and we are exploring therapeutic use of this vaccine for people with HIV. We are also working on a promising treatment for malaria and have malaria and TB vaccines in clinical trials. We are especially optimistic about our malaria vaccine.
But as a for-profit corporation, we have to find new mechanisms to do this work. So we are doing it through public-private partnerships. We get support for research and development and commit to make the products available at low cost. The first time we did this was working with UNICEF to provide polio vaccines for Africa. We sold the vaccine at pennies per dose, but kept a higher price in Europe and the United States because somebody has to pay for the research. So we have this multi-tier pricing strategy in place.
TA Report: Are you concerned that for some of these products, there may not be any paying market?
Garnier: Absolutely. We have to be careful that the system provides economic returns. We are working on dengue and hepatitis E vaccines and these are unlikely to return anything financially. But it's very important for us to do this, while not penalizing our shareholders. It is very expensive to develop and manufacture these products. You have to build plants and prepare for delivery. But you always have uncertainty. For instance, if we have a successful malaria vaccine, we don't know what the demand would be or how much it would cost.
TA Report:Are you optimistic that there will be even better, safer drugs for people with HIV?
Garnier: This is one of my biggest concerns. Some companies are discouraged about the controversies that have surrounded companies that have discovered and developed effective HIV drugs.
Everybody was caught off guard by the speed at which HIV/AIDS spread and the lack of planning for the consequences of this epidemic. This has created some scar tissue everywhere. But I am not concerned about GSK, because we have the expertise and our scientists are working very hard to develop new generations of drugs and new approaches to the disease. And this will continue.
As long as we can maintain reasonable prices in the wealthier countries, we will be able to sell those same drugs at no profit in countries that can't afford them. But we are concerned about re-importation from very poor countries to wealthier countries. We have to keep the separation between countries that cannot afford the drugs and those that can.
TA Report: What are the other obstacles to making these drugs widely available in developing countries?
Garnier: The biggest problem now is the lack of basic infrastructure. We need dispensaries, transportation, and clean water, and people need to get tested.
Training health care workers is also essential. Look at malaria. Drugs are plentiful and they’re very cheap, yet many people have no access to these products. If agencies like the World Health Organization (WHO), the Global Fund to Fight AIDS, Tuberculosis and Malaria, and other groups can help develop the infrastructure, it will pay off in the long run. And as you develop better health care in a nation, the economic development can take place. The two are totally connected.
TA Report: Many countries in Asia have a limited number of health care workers who are trained to administer these complicated drugs. How do you change that?
Garnier: HIV is spreading in many countries in Asia. Look at China. HIV is a ticking bomb there, and it needs to be addressed very quickly. We're one of the leading pharmaceutical companies in China. For a while, there was a certain lack of political will to really attack the HIV/AIDS problem aggressively. But things have changed in the last six months. I think the SARS crisis and new leadership helped government officials realize that they had to take this seriously. Once a commitment is made, the administration in China is usually quite effective at delivering. I am optimistic that the health care training and all the elements that are essential to the mix will be implemented there.
TA Report: GSK's Positive Action Program works to build civil society capacity in HIV treatment in Africa and Asia. Will GSK maintain its commitment to programs like Positive Action and other community partnerships?
Garnier: Definitely. GSK is very proud of these programs. The average Fortune 500 company spends one percent of its profit on philanthropic undertakings. Our investment is valued at over five percent. Last year, our philanthropic activities were valued at over 500 million dollars. But it is increasingly expensive to develop new drugs. So there is a limit to how much we can do, but we do a lot.
When we built these programs, we went to specialists in Africa and other parts of the world. We asked, “What would be the most effective thing we could do for this problem?” They told us how important it was to provide resources and help educate the local communities.
TA Report: There were real conflicts between the pharmaceutical companies and other stakeholders on the issue of access to AIDS drugs in developing countries. What lessons were learned from those experiences?
Garnier: The lesson is that there are no rules. In a serious epidemic, the normal rules of engagement between government, pharmaceutical companies, and NGOs don't apply any more. When a crisis starts, you have to mobilize coalitions immediately and address the problem. And that includes issues of pricing, intellectual property, and all the rest. Unfortunately there was a lack of wisdom and planning from all parties, not just from our company and others in the industry, but also from the South African government, many other governments, and multilateral agencies. We didn’t see it coming and made some mistakes. Many of us reacted in a way that was not ideal. So there are responsibilities for every stakeholder. The key lesson is that improvement of health care in the developing world can only be addressed if the significant barriers that stand in the way of improved access are tackled as a shared responsibility by all sectors of global society—governments, international agencies, charities, academic institutions, the pharmaceutical industry, and others—working in partnership.
TA Report: The Global Fund, WHO, and other key players are working to get antiretroviral drugs to millions of people. Are you optimistic that we can make a real impact on people with HIV in developing countries?
Garnier: I think so. There is a positive impact already being felt. But we're dealing with a very large population of HIV-infected people and a lack of infrastructure. People want a quick solution and that's not going to happen.
The Global Fund has great potential because money has a lot to do with the solution. It's not the only ingredient, but without money it's very difficult to make significant progress. We need to rekindle the interest of many donor governments. With so many problems, it's hard to focus everybody's attention on one big issue. But HIV is the biggest issue of all.
And there are important roles for the philanthropic sector as well. The Gates Foundation, for example, has made a huge difference in HIV/AIDS and other global health issues. They have recruited a first class staff that understands that the delivery of results is critical.
TA Report: You mentioned GSK’s CCR5 antagonist. How far away is that product?
Garnier: Two or three years if everything goes well. There are new approaches to treating HIV and this one, which is an oral drug, has passed proof of concept. Every new mechanistic approach to this disease will significantly improve the lot of people infected with HIV. And if their medications are no longer effective at some point, it provides another opportunity. So this is very good.
The long-term solution is a vaccine, but that’s a long way off. There are lots of experiments but nobody has a clear pathway to success. So we have to be cautious that we don't give a lot of hope to people in terms of a vaccine.
TA Report: Many big pharmaceutical companies are not investing resources in developing drugs and vaccines for diseases such as HIV/AIDS, malaria, and TB. How do you drive more resources into developing products to fight these types of diseases?
Garnier: Science evolves based on fundamental discoveries. So it's not only a question of pouring more money into R&D efforts. It's a question of having a scientific breakthrough that opens up a discovery program. But with HIV, that's not an issue. There is enough fundamental science to pick from—new doors for entry of the virus and new approaches.
Why are some companies not more involved? I think it is know-how and expertise. But if companies do not see potential to make money in wealthy countries, it will take the incentive for research out of the equation. And if it becomes difficult to justify reasonable prices in countries that can afford such costs, R&D funding will decrease. That would be a very bad thing for anyone who wants to see even better, safer treatments for HIV.
I don’t think that this risk has materialized. In fact, when we discounted our HIV drugs more than 90 percent for poorer countries, we spoke with European and US officials about our concerns that we would be pressured to offer these prices in wealthy countries. They fully understood the stakes and never pressured us to do so.
So we have enormous price differentials, and that's indispensable. But for some companies, there is a real political risk with HIV drugs, and from a business perspective that is not a positive element.
TA Report: Do you think that Asia will be able to adequately address the challenges of the HIV/AIDS epidemic?
Garnier: Asia is an extraordinarily important region. It has 60 percent of the world’s population, and the epidemic is spreading rapidly in parts of the region. By working together to build effective coalitions and partnerships between governments, multilateral agencies, industry, and civil society, we have an opportunity to prevent the type of devastation that we have seen in sub-Saharan Africa. That is why GSK made a commitment to TREAT Asia. It is the type of regional partnership that can bring together stakeholders to provide much-needed education and training, build civil society capacity, and conduct useful clinical research.
We are trying to do our part by developing even better therapies and a vaccine against HIV. We also support a range of important programs developed by NGOs throughout the world. We continue to learn from our efforts and our partnerships. But to address this epidemic adequately—in Asia and throughout the world—we need the political will, sufficient resources, and a commitment by all key stakeholders to work together to build an effective infrastructure to deliver HIV treatment and care to those who need it.
TA Report: Thank you very much, Dr. Garnier.