Many deaths in developing countries could be avoided if essential drug prices were lowered. Ken Bluestone explains how pharmaceutical companies are being urged to take their social responsibilities seriously

Why not lower drugs prices systematically for developing countries? Can pharmaceutical companies become more flexible in their approach to patents in poorer countries? Are joint public private initiatives between pharmaceutical companies, governments and international organisations really helping the most vulnerable?

These are just some of the challenges that development agencies Voluntary Service Overseas, Oxfam and Save the Children are putting to the pharmaceutical industry in a new report, Beyond Philanthropy: The pharmaceutical industry, corporate social responsibility and the developing world.

The document proposes industry standards for pharmaceutical companies in responding to the health crisis in developing countries, particularly with regard to access to treatment. Targeted at investors and companies, the report proposes a series of benchmarks in five key areas against which their performance can be assessed: pricing, patents, joint public private initiatives, research and development (R&D), and the appropriate use of medicines.

VSO, Oxfam and Save the Children produced the report in response to the health crisis facing developing countries. Infectious diseases kill over 14 million people a year worldwide. Most of these deaths affect poor people in developing countries, particularly children under the age of five. HIV and AIDS alone account for 8,000 deaths a day. This places huge burdens on the governments of these countries.

But the issue is not simply about providing good healthcare. Diseases such as HIV and AIDS are undermining economic progress. Adults of income-earning age are worst hit, leaving communities populated with grandparents and orphans. Writing for the World Health Organisation’s commission on macroeconomics and health, Columbia University economist Jeffrey Sachs says: ‘Good health is the motor behind development and treatment is a key part of this equation.’

Pharmaceutical companies should not be expected to take full responsibility for the health of the world’s citizens. But companies can make a decisive difference, especially where the price of medicines is concerned.

The cost of medicines has a significant impact on healthcare in developing countries. Overwhelmingly, poor people in these countries pay for medicines out of their own pockets. They make enormous sacrifices to get treatment, sometimes at great financial risk to their families. One month’s course of fluconazole in Kenya, for example, costs more than an average year’s salary. But without it, cryptococcal meningitis and oral thrush are the painful fates awaiting many people infected with HIV. Reducing prices could mean extending a parent or income-earner’s life by a month, a year, or more. In the case of one patient being cared for by a VSO doctor in Uganda, the extra time allowed her to finalise pension arrangements to guarantee financial security for her children.

Some companies have started to lower prices in the past 18 months, which is a welcome development. But such price offers have not always brought the cost of medicines down to the lowest levels, nor is the range of drugs on offer best suited to meet each developing country’s healthcare needs.

A more systematic approach is needed, one that ensures low-cost supply to these countries and assures companies that lower priced products will not undermine their core markets. This places a special challenge on healthcare users in the UK and other wealthy countries. According to a National Opinion Poll commissioned by VSO last year, 87 per cent of the general public feel that developing countries should pay lower prices for drugs to treat diseases such as HIV and AIDS. Now it is up to the UK government and companies to respond.

Over the past year, the secretary of state for international development, Clare Short, has been chairing a working group, which includes industry representatives, to develop a proposal for lowering drugs prices in developing countries more predictably and sustainably. The prime minister is expected to have its report within months, which will serve as a starting point for developing an international response.

It is not only VSO, Oxfam and Save the Children that believe pharmaceutical companies should take these issues seriously. Over 14 investment firms and pharmaceutical companies expressed interest in Beyond Philanthropy at its launch in the City offices of Morley Fund Management. And the pharmaceutical companies who attended agreed with the basic premise of the report that their responsibility in this area must go beyond traditional philanthropic responses.

The questions that have been raised by the gross inequalities in healthcare in the developing world demand a response. It is vital that we continue to hold companies, and governments, accountable for their role in meeting the health needs of the majority of the world’s population.

There are no easy answers but VSO, Oxfam and Save the Children believe in the power of asking the right questions and anticipate that companies and investors will use the benchmarks set out in Beyond Philanthropy to challenge their own thinking and actions towards developing countries.