BMI Core View: Corporate social responsibility is an underappreciated business activity in the pharmaceutical industry. Like all commercial entities, drugmakers are fully entitled to focus on the generation of profits and shareholder value. However, recent bad publicity - such as product recalls, inappropriate pricing in developing countries and dangerous production processes - means that pharmaceutical companies are increasingly accountable to employees, governments, the environment and, most importantly, patients. Firms that do not embrace CSR will lose investors and underperform compared with their rivals.
Novartis has entered into a development and licensing agreement with India-based Biological E for two vaccines to protect against typhoid and paratyphoid fevers. According to the Switzerland-headquartered multinational, the agreement helps the firm to 'deliver accessible and affordable vaccines that address unmet medical need in endemic regions'. The involvement of Novartis in this area of corporate social responsibility follows the launch of the Global Health Innovative Technology Fund in April 2013. This fund is Japan's first public-private partnership to develop new treatments to fight infections diseases in the developing world. Key partners include: Japan Ministry of Foreign Affairs and Japan Ministry of Health, Labour and Welfare, Astellas, Daiichi Sankyo, Eisai, Shionogi, Takeda, the Bill and Melinda Gates Foundation and the UN Development Programme.
Prevalence Of Typhoid And Paratyphoid Fever
According to the World Health Organization (WHO), the annual incidence of typhoid is approximately 17mn globally. The two forms of fever are caused by the bacteria Salmonella typhi, and are transmitted through ingestion of food and drinks contaminated by the faeces or urine of infected people. Contaminated water is one of the most common transmission pathways. While there are already available vaccines against the bacteria causing typhoid fever, there are no licensed vaccines for paratyphoid fever. This situation, combined with the growing resistance to available treatments, highlights the need for a new form of vaccine.
Data from the WHO show that while total unimproved drinking water sources as a percentage of total population has improved significantly for several developing countries in the Asia Pacific region, these figures are still a distance away from the 0% achieved by developed countries such as Australia, Singapore, Denmark and France. Consequently, this represents a continuous source of typhoid fever (and, by extension, revenue opportunities) in these countries. Moreover in 2012, annual per-capita expenditure on pharmaceuticals remains very low in these countries, such as Cambodia (US$11.90), India (US$12.50) and Indonesia (US$25.50). Therefore, while Novartis has the ability to market the vaccines in these countries independently, BMI highlights that should the vaccine be patented (and, presumably, priced fairly high), most people in these countries will be unable to afford these vaccines.
|Poor Drinking-Water Sources|
|Total Unimproved Drinking Water Sources As A Percentage Of Total Population In Selected Countries (LHS) And Low Per-Capita Pharmaceutical Spending (RHS)|