The British Company GSK has touched several sore spots in its latest annual report with strong statements about intellectual property, pricing controls, and emerging markets’ protectionist policies.
The British Company GSK has touched several sore spots in its latest annual report with strong statements about intellectual property, pricing controls, and emerging markets’ protectionist policies.
In the report, the company says: “We operate in markets where intellectual property rights, particularly patents and data protection, are less enforceable as governments seek to control prices and increase access to medicines for their population by limiting such rights.
The company specifically refers to Argentina when stating that “countries such as India, Brazil and Argentina have introduced or are considering practices that may restrict the grant of patents for certain types of inventions that are commonly available in developed countries”. See annual report.
GSK also asserts that some countries are considering a more widespread use of compulsory licensing, which allows any company seeking to use another’s patents to do so without prior authorization of the rights holder, through the payment of a set- usually low- fee for the license.
The company says that across emerging markets, prescription medicines are regulated in a variety of ways in different countries, which represents a great challenge to the industry because it is leading to requirements for additional market-specific documentation.
For instance, countries such as China, India, Russia, Vietnam and Nigeria are now requiring local clinical data in order to implement greater regulatory requirements.
At the same time, GSK says that many governments, such as Indonesia, China and India, are looking to expand the population covered by the government funded health schemes. This may increase the opportunities for high-volume tenders, tough GSK is also aware that this kind of strategy may have a direct impact on pricing.
On the other hand, GSK points out that in many of the larger emerging markets, such as Brazil, Russia, China and India, governments are trying to manage health costs through pricing controls. And it says that other trend in emerging markets is to include protectionist policies that help local companies.
The company has also published its Pre-Quarterly Results Communication for the First Quarter 2014, where it details its performance in the emerging markets.
GSK states that in this region its results were deeply affected by the legal case related to the alleged “Bribery in China”.
GSK seems optimistic despite all the difficulties it is facing in countries where the company’s rights are being infringed. The company is moving forward, in spite of all the problems, investing in countries such as Nigeria and India. See report.
