Earlier this month, FSG and GBCHealth co-hosted a webinar on how pharmaceutical and medical device companies can create shared value in global health, building on our paper, Competing by Saving Lives, which we launched earlier this year. We were privileged to be joined by a panel of four leaders from the field, representing GSK, Novo Nordisk, Abbott and Population Services International, to discuss their experiences implementing shared value efforts in global health. It was an insightful conversation – if you are registered ($49), you can watch the event again here; the slides are available for download for free from the same location.
During the webinar, we received many great questions from the audience that we did not have time to address. Over the next couple of weeks on the global health blog, we’ll be posting panelists’ answers to some of these. We’ll start with Duncan Learmouth, Senior Vice-President of the Developing Countries & Market Access at GSK; check back over the next few days to read more questions and responses from the other members of the panel.
Question: GSK's separate unit, the way it operates and its aspirations are quite impressive. Have all leaders in the company below the CEO truly embraced the commitment, or are there senior leaders who resist the significant change in mindset (e.g. lower margins, longer payback, volume vs. revenue)?
DL: You need to communicate consistently and very regularly so people in the organisation understand what the unit is about. The main challenge is around the fact that it dilutes margins but we are fast growing at the top line so that has been a big positive (and compensatory) factor. Our top line growth gives us the ‘currency,’ if you like, to invest more and for the longer term.
Question: You describe a new level of transparency in the pharma industry, with prices capped at 25% of UK prices and still creating economic value for GSK. How do you handle this issue with consumers in developed countries?
DL: We operate a tiered pricing policy across the whole company so high income countries pay more than low income countries for the same medicine. High income countries therefore support R&D for low income. Most politicians understand the reality of this.
Question: How is GSK addressing some of the country-level challenges around registration, pharmacovigilance and local manufacturing in order to achieve these increased volumes?
DL: For least-developed country markets, it’s about getting the basics right. So all of these areas are big challenges. Registration needs more resource and expertise from GSK in our countries and we need to better support ministry of health expertise. Pharmacovigilance is a big cultural/industry challenge. We are taking positive steps to educate here but it will take time. I am not a big supporter of local manufacturing because unless the population is very large, the volumes make this uneconomic locally. Of course there is a political dimension to this though that needs to be managed.