Important note: Information in this article was accurate in 2002. The state of the art may have changed since the publication date.

Reuters NewMedia - Thursday, November 28, 2002
Richard Woodman

The new scheme, backed by GlaxoSmithKline GSK.L and AstraZeneca AZN.L , proposes that pharmaceutical companies provide drugs at or near to cost to the poorest countries, whose governments guarantee that drugs will not be re-exported.

The scheme would be limited initially to medicines for AIDS, TB and malaria but might be extended later to products for other diseases as more companies and countries accepted the principle of differential pricing.

Several companies have already slashed prices of HIV drugs by up to 90 percent in response to public pressure. If the proposals are accepted, there would be mechanisms to ensure this happened systematically and that differential pricing became the operational norm.

The proposals were drawn up by Clare Short, UK Secretary of State for International Development and representatives from the UK pharmaceutical industry, the United Nations and the European Commission.

Blair met the group in Downing Street to discuss how to take their recommendations forward.

The group's report says the first goal is to secure international commitment to setting up a framework for differential pricing in time for next year's G8 Summit in France.

"Early engagement with the French government to ensure this is on the G8 agenda will be important," it said. "The European Commission has laid much of the groundwork for this agenda (but) further work will need to be done to secure the commitment of European governments and industry."

The report underlined that working with the U.S. government and gaining their support would be "critical" given the size and importance of the US pharmaceutical industry.

Short, who chaired the group, said in a statement: "If implemented, I believe the report will help bring about widespread, sustainable and predictable access to medicines for the poor for the first time."

Chris Viehbacher, President of GlaxoSmithKline Pharmaceuticals Europe, said the company was already making an important contribution to efforts to improve access to medicines in poor countries but wanted to do more.

"So I am delighted that we are making good progress in securing regulatory approval for differentiated packaging that will help prevent illegal diversion of preferentially priced product."

The report said EU regulations to stop cut-price medicines being diverted back for sale in Europe would be tabled by the end of the year. Other high-income countries should take similar action, it added.
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