Archrivals join hands for AIDS fight

The challenges of inventing new drugs, especially for life threatening diseases, is bringing down competitive barriers in the global drug industry faster than one could imagine.

In an unprecedented show of solidarity, archrivals GSK and Pfizer have come together to form a new company ideally created to tackle the pandemic of AIDS. The reasons to come together for both the companies are compelling at first glance. Both Pfizer and GSK have a vast presence in markets that have huge populations with AIDS and the number of affected is only growing.

GSK chief executive Andrew Witty said, “It requires a global mindset. A global health threat requires global solutions.”

The equity stakes in the proposed new company reflect the value of marketed products, and so, GSK has an overwhelming 85% control of the new company while Pfizer has the rest.

In terms of product synergies, perhaps GSK has the most comprehensive pipeline of drugs in the industry. Its lamivudine-zidovudine combination drug Combivir is by far one of the best selling drugs in the category, while Pfizer’s latest treatment, Selzentry, has been making steady progress in some of the target markets.

According to the press release, sales of Combivir, Kivexa and Selzentry could reach up to £1.6 billion. In all, 11 products will be sold through the new company and there will be potential to sell more combination drugs.

Also, the pipeline of future drugs suddenly looks bright for the two companies. While GSK has been struggling to match its old successes with delivery of new treatments and has 3-4 drugs in Phase II human trials, analysts are of the view that Pfizer has a more robust set of compounds, though the list may be short.

The GSK CEO admits the challenges of discovery of new anti-HIV drugs. “HIV remains a global threat with increasing incidence and viral resistance. This new company will be better placed to meet these challenges and improve access to treatments.”

Pfizer’s aggressive stand on retaining global leadership comes across through the statement of Jeff Kindler, chairman and CEO of Pfizer: “By combining Pfizer’s and GlaxoSmithKline’s complementary strengths and capabilities, we are creating a new global leader in HIV and reaffirming our ongoing commitment to the treatment of the disease.

With the strength of the companies’ current HIV products, as well as the complementary fit of Pfizer’s HIV pipeline and GSK’s global distribution capabilities, the new company is well-positioned to bring new and improved medicines to patients with more speed and efficiency. The new company can reach more patients and accomplish much more for the treatment of HIV globally than either company on its own.”

A few generic drugmakers, however, feel that monopolistic marketing of patented drugs may increase with the united efforts of two of the largest drug companies. In the late 90s, GSK, Boehringer Ingelheim and Bristol-Myers Squibb held on to their highly priced anti-retroviral drugs and their patents despite global pressure even as thousands perished in Africa fighting AIDS. The innovators had to finally bow after much humiliation when Cipla challenged them to market the same drugs at a fraction of the innovator’s prices.

The large companies seem to have learnt their lessons now. Both GSK and Pfizer have factored in pricing issues in the newly created entity. The press release issued by the two says the new company will continue GSK’s and Pfizer’s commitments to improve access to HIV medicines for everyone.

Not-for-profit pricing for HIV medicines will continue for those countries most in need and the new company will continue to facilitate new voluntary licences to diversify production and expand capacity in these markets.

The new company will also conduct research and development activities specifically to address appropriate access to HIV medicines in developing countries. In particular, the new company will increase its research effort into treatments and formulations for children living with HIV.

In the decades of its fight against AIDS, GSK has created the Positive Action programme which will be transferred to the new company. Since 2002, GSK has conducted 65 partnership projects across 63 countries and the new company, it claims, will continue to invest in Positive Action.

Pfizer, on the other hand, has made substantial investments in the fight against HIV/AIDS. The Pfizer Foundation has been supporting ConnectHIV in the US, the Diflucan Partnership Program in developing countries and the Infectious Diseases Institute, a global centre of excellence for teaching, research and healthcare delivery in Africa.