Big pharma more ethical in Europe20th June 2008
A new survey of how major pharmaceutical companies fare when it comes to ensuring access to medicines for the world's poorest people has put Britain's GlaxoSmithKline at the top of a list in which European firms outperform their counterparts in the United States.
An analysis produced by the Netherlands-based Access to Medicine Foundation found big differences between companies when they were ranked according to eight key criteria, including policies aimed at increasing access, patenting, research into diseases affecting the poor, and fair pricing policies.
Backed by 12 fund managers, who manage a total of US$1.2 trillion in assets, the analysis showed that European companies made more effort to provide affordable drugs and vaccines to millions in the poorest countries.
While the US-based Merck & Co ranked third in the list, after diabetes care specialist Novo Nordisk of Denmark, it was the only US company in the top seven.
The world's largest pharmaceutical company, Pfizer, ranked 17th out of 20, lagging behind India's Ranbaxy Laboratories and Cipla, both generic drug makers.
No Japanese drug companies featured on the list.
The index was published in order to give potential investors a new way of assessing the level of corporate social responsibility.
Access to Medicines' chief Wim Leereveld said he also hoped it would prompt companies with lower rankings to boost performance in this area. Leereveld said he believed the gap between European and US companies was largely cultural.
It also stemmed from the greater proximity of Europe to Africa, and stronger historical ties, he said. But he said that a 'transatlantic divide' could also be seen in other markers of corporate social responsiblity, like carbon emissions and climate change.
The move has come as long-term investors express increasing concern that the regulatory framework for big pharma will get a lot tougher unless the industry takes steps towards self-regulation. At the very least, larger companies' reputations will suffer unless some action is taken towards ensuring access to medicines in poor countries.
How the pharmaceutical industry responds to the access to medicine issue could impact materially on long-term shareholder value, according to the group of fund managers supporting the index initiative.
Fund managers including AMP, F&C, Morley, Sarasin, Henderson and Schroders said in a statement issued alongside the new rankings that such tools were needed to help investors and analysts assess the long-term investment value of drug companies.
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