Gsk

Group 1

Ethics - BUS8300

Case Title: GlaxoSmithKline, Bristol-Meyer Squibb, and AIDS in Africa

Case Background

* In 1981, the US first noticed an alarming increase of a rare cancer among gay men. It was known to have afflicted a Bantu male in 1959 and possibly jumped from monkeys to human centuries earlier.

* In1982, the disease was termed AIDS (Acquired Immune Deficiency Syndrome) caused by HIV (Human Immunodeficiency Virus)

HIV is transmitted through the exchange of body fluids including blood, semen, vaginal fluids and breast milk; The main modes of infection are through unprotected sex, intravenous drug use and child birth.

* By 2000, according to United Nations, 5 million people were newly inflicted with AIDS each year, bringing the worldwide total of 34,300,000. Approximately 3 million people died of AIDS each year.

* Of the 5 million new cases of AIDS, 70% or 4 million were located in sub-Saharan Africa, which emerge as the ones most desperately in need of the treatment.

* In 1996, Dr. David Ho discovered the "cocktail", a combination of three or four classes of antiretroviral drugs. This new combination treatment will enable AIDS patients to live once again a normal, healthy life.

* The price of the combination treatment cost about $10,000 a year which patients in the sub-Saharan Africa could not afford considering their annual income at only $500.

* GlaxoSmithKline and Bristol-Myers Squibb and the other big drug companies are the patent holders of the antiretroviral drugs and they did not want to lower their prices.

* Patents in the US are the exclusive right to keep anyone else from making their newly invented drugs for 15-20 years; In India, patents are aimed to protect the "process" by which a drug was made therefore allowing others to make the same drug formula if they can figure out another process by which to make it.

* Pressured by the governments of the large drug companies to require all WTO (World Trade Organization) members provide uniform patent protections on all intellectual properties, the WTO adopted an agreement known as TRIPS (Trade-Related aspects of Intellectual Property Rights) in 1997. Under the agreement, all countries of the members of the WTO were required to give patent rights to make and market their inventions for a period of 20 years in their countries. Developing countries were given until 2006 before they had to implement the TRIPS agreement.

* Also, in a "national emergency" WTO developing countries could use "compulsory licensing" to force a company that owned a patent on a drug to license another company in the developing country to make the drug. And in national emergency, developing countries could also import drugs from foreign companies even if the patent holder had not licensed those foreign companies to make the drugs.

* In 2001, Cipla, an Indian drug company, made a surprise announcement: It had copied 3 of the patented drugs and put them into a combination antiretroviral course of therapy. The cost of the annual supply was only $350 as compared to $10,000 of the original manufacturer.

* Accused of stealing intellectual property, Cipla responded that the TRIPS agreement did not take effect in India until 2006 and Indian patent law allowed it to make the drugs so long as it used a new process. Cipla also claimed that AIDS was a national emergency in many developing countries particularly in sub-Saharan nations.

* From then on, 3 other Indian drug companies announced that they were manufacturing and selling the combination drugs at a lower price.

* Since the combination drugs contained copies of GSK's and Bristol-Meyer Squibb's patented drugs, they branded the as "pirates" and asserted that what they were doing was theft even if they broke no laws.

Framework for Ethical Decision Making.

1. Is there something wrong personally, interpersonally, or socially? Could the conflict, the situation, or the decision be damaging to people or to the community?

Yes.

A. People inflicted with AIDS to the community of sub-Saharan nation

* Family life destroyed by deaths of married couples leaving orphans to fend for themselves

* Increased rate of crime and violence

* Decline in Agriculture as the orphaned farm children are left uneducated

* Decrease in labor productivity

* School and hospital systems were decimated

* Entire national economies were on the verge of collapse

* Increased in percentage that virus will spread

B. GSK and SQUIBB to the AIDS patients in Africa:

* Overpricing on the AIDS treatment that sub-Saharan could not afford

The following were their arguments:

1. It was better for poor countries to spend their limited resources on educational program that might prevent new cases of Aids that on expensive drugs that would merely extend life for the small number of patients that might receive the drugs.

2. Most AIDS patients in developing countries have limited access to medical personnel who will monitor taking the prescribed drugs and ensure that drug-resistant versions of the virus did not develop.

3. The development of new drugs was extremely expensive.

* On their reason no.3, the defense on high prices for new drugs saying that this will have to cover costs for the research and development, however, most new drugs launched are just slight variations of existing medicines which was funded by government funds, public research and subsidies.

* Refusing to make the drugs affordable is also depriving the AIDS patients to have a chance to live a healthy life. - The Right to Live

* Other matters that pharmaceutical companies are being alleged of:

a) sell products in developing countries that are withdrawn in the West;

b) sell their products by persuasive and misleading advertising and promotion;

c) cause the poor to divert money away from essential items, such as foodstuffs,