Morning:
13°c
Glaxo charges £6 for £1 swine flu vaccine
Lucy Tobin and Anna Davis22.07.09
The drug company producing most of Britain's swine flu vaccine was today accused of profiteering from the pandemic.
It costs GlaxoSmithKline around £1 to produce the vaccine but it charges up to £6 per dose. The company would not confirm how much it is charging the NHS. The Government has ordered 60 million doses, meaning the drug giant's total profit is likely to run into the hundreds of millions.
Glaxo has sold £700 million worth of the H1N1 vaccine worldwide so far this year and can expect to sell billions more as foreign governments desperately stock up.
The company today announced profits of £2.4 billion for the last three months alone. It has also sold £60 million of its anti-viral flu treatment Relenza, which reduces the length and severity of the disease and is recommended for pregnant women with swine flu.
Liberal Democrat health spokesman Norman Lamb said: “This is clearly a bonanza for the company. They have done the work so should legitimately benefit, but this is a staggeringly substantial return. I will write to the National Audit Office to determine whether we got the best deal for the taxpayer.”
But Andrew Witty, the £1-million-a-year chief executive of GSK, denied his company was profiteering. He said: “We've been preparing and investing in something like this pandemic situation for a very long time. We've spent £1.2 billion on vaccine technology in the last four years.
“We've deliberately been very responsible about pricing — the vaccine is not being sold at a special premium and we have been very proactive about making sure there is enough capacity to produce the huge number of vaccines required.”
He added: “We have been spending on vaccines for the past 18 years, far longer than any other drug firm. It has been a tremendously long investment.”
Susi Squire of the Taxpayers' Alliance said: “We need an assurance from the Government that they have got the most competitive rate out of GlaxoSmithKline. It is good to hear that a company is doing well in the recession, but is it because they are charging over the odds for these vaccines?”
Geoff Martin of London Health Emergency said: “It's a scandal that any company could use the swine flu pandemic as an opportunity to jack up profits.
“The Government should step in and impose a windfall tax on private companies that have hit the jackpot as a result of the flu crisis.”
The drug company also admitted charging Western countries more for the vaccine than developing countries. Spokesman Stephen Rea said: “We expect the UK to pay more than developing countries. We're not going to shun the fact that we are profitable, but it's only through those profits that we can carry out research to enable us to respond to pandemics when they break out.”
Glaxo also pledged to donate 50 million vaccine doses to the World Health Organisation for distribution among the poor.
The drug giant refused to say how many of its own staff have contracted the disease but said it had provided some employees with free Relenza and Tamiflu.
Glaxo today said it is on track to deliver the Government's order of 60 million vaccine doses by the end of the year, and will begin to distribute them in September. Regulators will have only months to test the inoculation —vaccinations normally have trials lasting up to two years.
The company admitted that bringing the drug to market so quickly could affect quality.
Mr Rea said: “We expect there to be problems. Side-effects might include pain where the inoculation is given, and fainting. With a vaccine on this scale, other problems may be linked to it too.
“While the vaccine still has to go through clinical trials, there will be a balance between how extensive they are and regulators feeling a need to speed up its availability. We might not have the luxury of time on our hands.”
Reader views (8)
Large pharmacuetical companies spend millions/billions on research and development to find and produce the medicines that people need, especially in times like this. The 'profit' covers these costs as well as the production costs. These companies also donate, or sell at less than cost, medicines into the third world and so have to cover these costs in countries that can afford it. Pharmaceuticals is also one of the few remaining UK success stories, employing thousands of people and generating tax income for the state.
I guess everyone has a choice, if you don't like big pharma, dont take the products when you're ill.
Also, where does it say Tamiflu is a GSK product - it doesn't, GSK produce Relenza, an alternative antiviral.
If you're looking for a windfall tax target - what about the oil companies making huge profits when the oil price is high but the costs to get the oil hasn't changed.
- Rod, Sussex
GSK make Relenza (as stated in the article) not Tamiflu. Companies can only afford to help poorer nations with healthcare because they can be profitable elsewhere. Surely that should be encouraged as a good thing rather than saying they "admitted" to charging those less able to pay less like thats a bad thing. Somebody somewhere has to pay for the development of drugs. Unless you are offering to work for free?
- Ct, London
I await with some considerable interest the prospect of Paul H giving a "wide birth" to GlaxoSmithKline's products. Hope you have good child-bearing hips mate!
- Stephen B, London, UK
It was developed by US-based Gilead Sciences and is currently marketed by Hoffmann–La Roche (Roche) under the trade name Tamiflu. In Japan, it is marketed by Chugai Pharmaceutical Co., which is more than 50% owned by Roche. Oseltamivir is generally available by prescription only.[1]
Quote from Wikipedia... nuff said GSK
- James Macleod Ritchie, Oyster Bay Cove
As I recall GSK did not develop Tamiflu, it was developed in Switzerland? So this is firstly crass incompetence in NHS procurement allowing outright profiteering by GSK? Maybe an Indian pharma company could make it for 50p and sell it 150p and still make a thumping profit? Hmmm... anyone smell corruption is is it just yet more incompetence?[tax payer funded of course!].
- James Macleod Ritchie, Oyster Bay Cove
The cash cost of production ignores the hundreds of millions of pounds that drug companies spend in R&D and clinical trials each year. How do you think the current generation of drugs were funded - by the tooth fairy? No, by the "profiteering" from selling drugs above the cash cost of production over the last 2 or 3 decades.
- Thomas, London
Of course they're going to profiteer from the current pandemic - and any other that comes along. That's what deplorable companies operate like - profit first, everything else second.
While charities and charitable organisations around the world, and people who give to them, are helping to provide ant-viral and other drugs to people all over the world to help in the treatment and prevention of diseases and the saving of millions of lives, GlaxoSmithKline is lining its pockets by charging an extortionate amount for drugs urgently needed to prevent a potential worldwide huge loss of life.
In such emergency circumstances there should be provision (as there would probably be if we were in a World War) for the government to sieze compulsory control and fix a fair price.
It makes you wonder whether companies like this could have been in some way behind the spread of the disease in the first place. Obscene greed has, after all, been the motivation for obscene acts throughout history.
I, for one, will in future give a wide birth to products made by the likes of GlaxoSmithKline who exploit and make huge profits from natural disasters and other people's misfortune
- Paul H, London, UK
SO it is an opportunity for the government to levy a windfall tax to ease out the tremendous debts for the Nation!!
- Ck, NW London
