Defying skeptics, GlaxoSmithKline (GSK) has persisted with its quest for a malarial vaccine for 30 years. The company is hopeful of filing for regulatory approval for it next year said CEO, Andrew Witty in an interview to CNBC-TV18.
He said the vaccine will not be priced with an eye on profits as there is no point in pricing it at a level where the people who really need it cannot have it. "So, what people can be assured of is whatever the lowest cost we can get it to, that will be the price it gets passed through," said Witty.
Malaria vaccine is a good example of the company's broad commitment to innovate and improve access to medicine and healthcare for people. It is not just a programme or a PR campaign, he said.
When asked what he would advise Indian companies facing compliance issues, probes etc in the US, Witty said: "My advice to other companies is you have got to be very focused on what is your regulator signaling to you. I don't think there is much evidence to suggest that regulatory assertiveness is going to diminish."
Witty said he could not comment on the probe against the company in China because investigations were still on. "We have over several years been absolutely committed to being prepared to evolve our business model and the way we operate to try and ensure that we absolutely meet the expectations of the societies in which we operate," he said.
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Excerpts of his interview on CNBC-TV18
Q: Before I get down to talking about India, the recent investment that you announced in what a lot of multinational companies (MNC) and pharma companies see as a very highly regulated difficult market to operate in - Let me get your thoughts on the Malaria vaccine. When are you launching that?
A: Malaria vaccine - we have had very encouraging data over the last two years. We continue to analyze all of that data but we are hopeful and optimistic we are going to be able to file for regulatory approval during 2014. If all goes well that should give us the opportunity to start to look for approvals and then recommendations on use during I guess the end of 2015 and early 2016.
We already have the first manufacturing capabilities built. First dosage will come out of Belgium. We have built a relatively small facility there. However, we have enough there to start. We are just going through the process of deciding where to install our next expansion capacity ready for higher demand. So, it is a very exciting period.
This programme began in the early 1980s, so, 30 years. Up until 5 years ago many people thought we were either crazy or dreaming to believe that we could ultimately find a vaccine and yet the data we are now seeing gives us a high degree of optimism that we could infact have the first potential vaccine for Malaria - not perfect - it won't cover everything but could make a very material impact. That is why we are committed to going forward to file for approval.
Q: I head you in a conversation with Steve Forbes where you said you will sell this almost at cost but how much will it be priced at?
A: We haven't finalised. We are still working to get the price as low as possible and a little bit it depends on how much the volume is.
What we are committed to do is essentially to sell this not for profit price. So, what people can be assured of is whatever the lowest cost we can get it to that will be the price it gets passed through into.
Q: Would your shareholders be happy? It is 30 years in the making and you are not going to make a whopping profit out of it?
A: I hope they will be because we all understand that the communities who stand to benefit from a potential malaria vaccine really have very limited economic resources. So, to sit here and say we spent 30 years developing this incredible potential breakthrough and yet then to price it at a level where the very people who need it cannot have it seems to me to be wrong.
Obviously, as a company of the size of GSK this fits within the portfolio of everything else we do; of course there is a cross subsidisation from other parts of our business to help us do this to some degree.
Often people look at big companies and say what is your corporate responsibility activity - very often companies are criticised for whether it is just superficial? At GSK it is very hard to argue that. There is real evidence in several areas including the malaria area where we are really deploying our core business model to try and do the right thing in terms of help and improve health status not just for rich people but for everybody in the world.
So, for me this fits within that really broad commitment that it is not just a programme, it is not just a PR campaign, we have a commitment to innovate and improve access to medicines and healthcare wherever people are. Malaria is a really good example of that and it sits very proudly alongside all the other things we do.
Q: Where are you on the Chinese probe?
A: It is still ongoing. Unfortunately, I can't really say anything about it because the investigation is still ongoing. We obviously are responding to and working with the authorities as necessary. We very much respect that process and because of that, I am not able to really go into more details. Obviously, when it is concluded we will be able to talk about it. However at this point in time we are working our way through the issues in China.
Q: Some people categorise this as an MNC witch hunts - what are your thoughts on that? Especially for a company that is trying to develop a malaria vaccine, a company that is gone out and said it will share its clinical trial results with the public? These two just don't go together.
A: I don't have any particular view about why or whatever has happened in China and again until we get to the end it is not wise for me to make speculation. We want to work our way through it and to resolve this as soon as possible.
From a broad perspective at GSK one thing is very clear - we have over several years been absolutely committed to being prepared to evolve our business model and the way we operate to try and ensure that we absolutely meet the expectations of the societies in which we operate.
We have been happy and willing to go forward on that because we are determined to make sure that as a company that has the potential to deliver so much in terms of innovation, we want to also be a company that fits the expectation of people who watch us and we are going to continue to do that.
This period that we are in at the moment doesn't in anyway distract us from our drive to be prepared to innovate our business model.
Q: Is there a lesson there for Indian companies that are today facing compliance issues, probes, fines in the US? Is there a lesson there?
A: We need to recognise that global regulators and regulators in many countries are increasing their scrutiny. Regulators in many countries are raising their levels of scrutiny and we are definitely in a period I think where companies are having to then raise their game. Sometimes that is about increasing levels of controls, sometimes it is about changing your business model. Actually, you need to change your business model because the expectations have moved on and it does feel to me that we are living in an era where expectations are shifting and companies have to respond.
Sometimes you can respond quickly enough and sometimes unfortunately companies don't respond quickly enough if something happens.
Our goal is to try and be responsive. My advice to other companies is you have got to be very focused on what is your regulator signaling to you. My sense is we are probably going to see a continuation of this. I don't think there is much evidence to suggest that regulatory assertiveness is going to diminish.
