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EU pharma heading efforts to get drugs to the poor

A new ranking system for the pharmaceutical industry has revealed that European drug makers are out-performing their US competitors in efforts to increase the level of access to affordable medicines for the poor
A new ranking system for the pharmaceutical industry has revealed that European drug makers are out-performing their US competitors in efforts to increase the level of access to affordable medicines for the poor.

The Access to Medicines Index was launched on June 16 and shows that only one US manufacturer, Merck & Co, which came third, has made it into the top seven. GlaxoSmithKline came first, leading the way in providing drugs to the poor by using product price discounts and researching new medicines to tackle diseases such as malaria.

Founder of the index, William Leereveld, explained that drug companies in the EU are closer to the African continent, which might be the reason for their standing on the index. He also said that US companies are more proactive in terms of their philanthropic ventures.

"Rather than looking at the pharmaceutical industry as a black box, the Access to Medicine Index finds good practices within individual companies and holds them up as shinning examples to others," he said. "By ranking the companies, we create room for them to improve."

Leereveld said that the most striking fact is that the index, set up by the Access to Medicine Foundation, was done at all. According to a report in the Financial Times, the Index took two years to compile and met resistance from the pharmaceutical industry.

The index has, however, received the backing of 12 investors, including Morley, Schroders and F&C, who all signed a statement which states that ensuring access to healthcare provision is one of the 'major challenges of our time.'

"The drug industry has an important role to play in the global access to medicine challenge," said investors in the statement. "How the pharmaceutical industry responds to the access to medicine issue could impact materially on long term shareholder value."

Dutch company, Innovest, a global investment research firm, carried out the research for the index and assessed the pharmaceutical manufacturers on different criteria. These included management of policies increasing access, the amount of R&D being carried out into neglected diseases and implementing patenting and licensing for fair pricing systems.

Mathew Kiernan, CEO of Innovest, said that companies that do more to tackle the issue of medicines for the poor tend to be more far-sighted making them more attractive to potential strategic and long-term investors.

"For global pharma companies, managing access to medicine is a complex and daunting challenge," said Kiernan.

Other European companies that fared well were Novo Nordisk, which came second, Novartis, which came fourth, and sanofi-aventis, which came fifth. Only three generics companies, which are often commended for their role in lowering the price of drugs by non-government organisations, feature in the top 20 and appear near the bottom of the list.

16th June 2008

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