Pfizer Makes Aid Pledge, Breaks Pact on AIDS Drug
13 November 2003 (Wall Street Journal)
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See online : Wall Street Journal - November 12, 2003
Scott Hensley, Staff Reporter of The Wall Street Journal
At Pfizer Inc., while one hand gave, the other was taking away. Tuesday, the pharmaceutical giant pledged $500 million toward eradication of a common form of blindness in the developing world. Yet almost simultaneously, Pfizer retreated from a novel licensing deal for an AIDS drug that had been hailed as a new way to get inexpensive medicines to poor countries.
Under the failed drug pact, Pfizer would have licensed patents for Rescriptor, an HIV medicine, to the Concept Foundation, a not-for-profit aid organization based in Pathumthani, Thailand. With a partner called the International Dispensary Association, an Amsterdam-based nonprofit that produces and distributes essential medicines to poor countries, the Concept Foundation would have arranged for generics makers to produce the drug. Pfizer acquired Rescriptor in April through its purchase of Pharmacia Corp., which helped devise the licensing deal.
The new approach promised faster, better production of generic drugs expressly for the developing world. Under the friendly technology transfer, generics companies would receive know-how beyond the patent, such as manufacturing expertise, from drug companies such as Pharmacia and Pfizer. The voluntary approach would also eliminate delays from legal fights that were likely if countries granted compulsory licenses, against the wishes of the drug makers, to generics companies.
The licensing deal for Rescriptor, known generically as delavirdine, was hailed as path-breaking at the World Economic Forum in Davos, Switzerland, where it was unveiled in January by officials from Pharmacia and its not-for-profit partners. Later that day, during a panel discussion on intellectual property, Henry McKinnell, chairman and chief executive of Pfizer, supported the concept, according to people who attended the session. In a written statement at the time, Pfizer said it welcomed Pharmacia’s "innovative initiative" but would evaluate it further after completing their merger.
Now the Rescriptor deal has fallen apart, Pfizer says. "While we are intrigued by the model, we concluded that this was not the right product," says Robert Mallett, senior vice president for corporate affairs at Pfizer in New York. He says it was a mutual decision based primarily on clinical drawbacks of Rescriptor, which must be taken three times a day compared with other AIDS drugs taken once or twice daily.
"This is just not a suitable product, so we don’t want to do it," Mr. Mallett says. "There are better drugs out there."
The advocates for the licensing approach reject Pfizer’s reasoning and say the end of the deal wasn’t mutual. "I would have taken it, if they would give it to me," says Joseph Gonzi, a consultant on AIDS medicines to the IDA who negotiated on its behalf with Pfizer.
The failure to pursue the experiment with Rescriptor, advocates say, hampers their efforts to make essential medicines invented in developed countries available at low cost in the developing world.
Rescriptor’s limitations were well known from the beginning, says Joachim Oehler, chief executive of the Concept Foundation. "This is hypocrisy," he says of Pfizer’s decision. Nobody at Pharmacia or the aid organizations, he says, considered Rescriptor’s drawbacks serious enough to impede creation of a new model for humanitarian aid. Indeed, he pointed out that Pfizer announced in July that it would provide Rescriptor free or at deep discounts to state AIDS programs for the poor in the U.S.
The Rescriptor project, Mr. Oehler explains, was intended to help patients and to show the feasibility of a voluntary licensing approach "without the limitations of drug-donation programs and without the hassles of public pricing battles between countries and activists on one side, and pharmaceutical companies on the other."
Michael Friedman, a former Pharmacia executive, says Rescriptor is a "good drug but not a perfect drug." Now president of City of Hope cancer center in Duarte, Calif., Dr. Friedman helped construct the licensing deal and then, with a merger in the works, tried to persuade Pfizer to pursue it.
"We knew the conduct of this experiment would depend on the enthusiasm, support and leadership of Pfizer staff," he says. "I hoped that we had addressed their questions."
Rescriptor is still sold in the U.S. and some other counties, including Canada, Pfizer says. But it has never been widely used. Rescriptor, which blocks reproduction of HIV, had U.S. sales of $7.4 million last year, according to Atlanta health-information provider NDCHealth.
Pfizer showed its support for traditional aid approaches Tuesday at United Nations headquarters in New York. The company pledged to donate 135 million doses of antibiotic Zithromax to fight blindness caused by trachoma infections over the next five years.
Trachoma, an infection that spreads easily in unsanitary conditions, was eliminated in the U.S. and Europe early in the last century. In the developing world, the infection is a leading cause of blindness, but it can be treated with a single dose of Zithromax, one of Pfizer’s biggest sellers. Pfizer’s commitment is valued at an estimated $500 million.
As a Pfizer manager responsible for Iran and Afghanistan 30 years ago, Mr. McKinnell saw the effects of trachoma firsthand. "I remember vividly children leading blinded parents around by the hand," he said. "It’s something I felt for a long time that the world needed to address."
The International Trachoma Initiative, founded in 1999 with Pfizer’s support, has already provided eight million doses of the antibiotic around the world.