The Access to Medicine Index released – Ranking Pharmaceutical Companies

Starting from the Pretoria patent litigation in South Africa to the Novartis patent litigation in Chennai last year the big pharmaceutical companies in the world have endured a particularly brutal image bashing exercise due to a series of strategic mistakes which have (rightly and wrongly) portrayed them as putting profits over patients. Obviously the negative publicity was beginning to worry institutional investors and when these concerns were coupled with philanthropic charities such as the Access to Medicine Foundation, the world was presented with the Access to Medicine Index – a novel index to measure how the top 20 pharmaceutical companies were dealing with the question of access to medicines for the global poor. The index serves as a tool for ‘socially’ responsible institutional investors to choose the best companies for future investments. The hope is that such an index would create pressure amongst pharmaceutical companies to improve their practices. (The report can be found here)

The initiative was spearheaded by the Netherlands based Access to Medicine Foundation along with several institutional investors and market research agencies. The top 20 companies were measured on 8 criteria – Management, Influence, R&D, Patenting, Capacity, Pricing, Drug Donations & Philanthropy. What was refreshing about this initiative was the fact that it is one of the few reports that does not view the pharmaceutical industry in terms of black & white i.e. it does not pander to the usual stereotypes of classifying all innovator patent owning companies as bad and all generic companies as good. Instead the report does realize that there are several shades of grey and that there are quite a few innovator pharmaceutical companies which have engaged in creditable ventures to increase the access to medicines to the poor. Demonizing the entire industry is not going to help anybody and the ATM index is the first step in helping to clarify this point. In this regards the ATM index will hopefully shift the access to medicines debate away from its current patent-centric focus to a more diverse range of factors.

Results: GSK was ranked number one 1 as the company having the best access to medicine practices. Two Indian companies Cipla and Ranbaxy feature in the list at ranks 14 and 16. Both Indian companies are ranked above global MNCs such as Pfizer but still far below the favourite whipping boy of the Indian NGOs – Novartis – which is ranked at number 4! On the whole European companies are reported to have much better practices than American companies especially when it comes to the question of Africa. (The entire ranking can be viewed here)

Possible shortcomings of the Report: In the section regarding investments into R&D for neglected diseases the report does mention several initiatives by MNCs to develop drugs for neglected diseases. It however completely forgets to mention that most of these ventures are Public Private Partnerships where the research is heavily subsidized by charitable organizations. In my opinion it was very important to clarify this point since not doing so conveys the wrong impression that it is the investor’s money which is being used in such research while this is clearly not the case. Moreover it is necessary to keep harping on the point that IP regimes are not the only factor influencing R&D instead it is more often the market and funding priorities which dictate decisions to invest in particular types of R&D. (SpicyIP had carried a detailed note on this point earlier.)

Overall however the Report is a very interesting initiative. More details can be found at the ATM foundation’s extremely informative website.