GlaxoSmithKline: Getting AIDS Drugs To More Sick People

When Jean-Pierre Garnier took over as CEO of GlaxoSmithKline (GSK ) seven years ago, the company's reputation on corporate social responsibility was at its nadir. As part of a coalition of 39 pharmaceutical companies, the drugmaker was suing Nelson Mandela's South African government for voiding patents on prescription drugs. Mandela's top priority was giving desperately sick patients access to HIV treatments, and GSK—the world's largest supplier—was standing in the way. "It was a public relations disaster," Garnier concedes.

The experience convinced Garnier that GSK should lead the crusade to improve access to medicine. In 2001, GSK became the first major drugmaker to sell its AIDS medicines at cost in 100 countries worldwide. And it has granted eight licenses to local companies to produce generic versions of these medicines.

In fact, GSK sells 90% of its vaccines, in volume terms, at not-for-profit prices to customers in the developing world. In 2005, it set a new paradigm in the vaccine industry. It chose Mexico over other, wealthier nations as the launch pad for Rotarix, a new vaccine against gastrointestinal rotavirus. "We wanted to get the vaccine to the children who needed it most," Garnier explains.

Creating medicines for the Third World while still posting a profit required fancy financial footwork. GSK has formed 14 different partnerships with the World Health Organization and other nongovernmental bodies, and with philanthropies such as the Bill & Melinda Gates Foundation. These programs provided funding for research on two different HIV vaccines, new treatments for tuberculosis, and a pediatric vaccine against malaria. In the latter case, a collaboration with the Gates Foundation and a group called the Malaria Vaccine Initiative led to a vaccine that provides a minimum of 18 months of protection against malaria. It could be on the market within four years. "The commitment [of GSK] to developing a malaria vaccine is outstanding," says Dr. Tore Godal, the former head of the Global Alliance for Vaccines & Immunization (GAVI).

Garnier says efforts such as these give the company several advantages over its rivals. Top scientists are drawn to GSK because they want their research to make a difference. Doing good, and being admired for it, also boosts general morale at the company, he says. "This creates a more aligned and engaged workforce, which helps us outperform our competitors."

By Kerry Capell

    Before it's here, it's on the Bloomberg Terminal.