PRESENTATION TO PORTFOLIO COMMITTEE ON HEALTH

CAPE TOWN - 10.05.2000.

1. Introduction

Glaxo Wellcome is very pleased to be part of this forum to discuss our initiatives regarding HIV/AIDS. We have been calling for a joint initiative such as this one for several years, and applaud the government for moving forward in such a constructive way.

This presentation will deal with the broad outline of "who is Glaxo Wellcome", and will move on to cover our social responsibility and partnership programmes, our research initiatives, our contribution to cost and affordability of HIV medicines, and vision and hope for collaborative ventures in inclusive fora such as this one, in our mutual search to demolish this scourge that is threatening the fabric of our society.

2. The Glaxo Wellcome Group

Lead by research

Glaxo Wellcome is a research-based company whose people are committed to fighting disease by bringing innovative medicine and services to patients throughout the world and to the healthcare providers who serve them.

Glaxo Wellcome is one of the two largest pharmaceutical companies in the world operating in 76 countries and employing about 54 000 people. Glaxo Wellcome also has a long history in South Africa, with the establishment of Burroughs Wellcome here in 1902 and Allen & Hanburys in 1918. Glaxo built the first factory south of the equator in South Africa capable of sterile filling and able to process antibiotics in 1954. The company made a major investment in plants and offices in 1990, and currently employs over 600 people

Current areas of excellence

The company is a recognised leader in the pharmaceutical industry in South Africa and a market leader in four therapeutic categories - respiratory, allergic rhinitis, HIV/AIDS and migraine.

Many of Glaxo Wellcome's products are household names, including the largest selling drug of all time, the anti-ulcer treatment Zantac®, and the AIDS drug, AZT®.

Internationally, Glaxo Wellcome spends about £1,2-billion (R12 billion) a year on research and development, with the greatest allocation of the funding going to HIV/AIDS research

The company's strong research and development focus has given it many 'firsts' in the pharmaceutical world. These include the introduction of a diphtheria vaccine as early as 1894, the production of penicillin on a commercial scale, the vaccine for rubella (German measles) and the first inhalation therapy for asthma.

3. Glaxo Wellcome and HIV/AIDS

* Glaxo Wellcome has been involved in the fight against HIV since its first appearance in the 1980s. In 1987, an anti-retroviral drug called Retrovir®, which showed success in delaying the progression of HIV in tests at Wellcome's research laboratories in the United States, was launched. The drug became known as AZT®, and its initial promise has been proved in the intervening years. AZT® is now among the most investigated treatments available, with clinical trial literature approaching 5 000 citations, and has significantly extended the lives and improved quality of life for millions of people living with HIV and AIDS.

* Apart from being used to slow the onset of AIDS in HIV-positive individuals, AZT® is also used as a preventative therapy. Research has shown that HIV-positive women treated with AZT® in the last stages of pregnancy can halve the transmission rate of the virus from mother to child.

* As well as AZT®, Glaxo Wellcome markets another AIDS treatment - a reverse transcriptase inhibitor called 3TC® - generally used in combination with AZT®. These two drugs have been combined into one tablet to form Combivir®, which is currently awaiting approval from the South African Medicines Control Council.

* The success of AZT® as an AIDS treatment put Glaxo Wellcome at the forefront of negotiations worldwide about supplying the drug as efficiently and affordably as possible, especially to the developing world where the AIDS epidemic is growing rapidly. This has led to the company reducing the price of AZT® for developing countries, or for special programmes. In South Africa Glaxo Wellcome is trying to keep the price of AZT® as the lowest in the world, while the World Health Organisation recently added AZT to the Essential Drug List.

* Glaxo Wellcome is currently working with UNICEF to help prevent mother-to-child transmission and is a co-founder of the UNAIDS Access to Treatment pilot project in a number of developing countries.

* A significant proportion of Glaxo Wellcome's research is in the field of HIV and AIDS. The company is also involved in research and development of an HIV/AIDS vaccine and is a long-term corporate sponsor of the International AIDS Vaccine Initiative.

* In South Africa, Glaxo Wellcome has developed and registered a post-HIV exposure starter pack for healthcare workers who may have been exposed to the virus during the course of their work. The first of its kind in the world, Glaxo Wellcome extended the benefits of the initiative by supplying a free pack to every South African dispensary to issue to those accidentally exposed to the virus, either through work with infected patients or by other means.

4. Partnership approach

A: Positive Action:

The company's commitment in HIV goes beyond developing new therapies to a much wider concept of Positive Action, a long-term global development programme of HIV education, care and community support. Established in 1992, Positive Action is based on the principle of partnership. Working closely with affected communities, local non-governmental organisations, international agencies and governments, Positive Action is designed to help address the far-reaching social, economic consequences of the epidemic. By working in partnership, listening to and acting upon the advice of people affected by HIV, it is hoped that the company's resources could be put to the optimum use and maximum benefit of those affected. In addition, by having closer links with the HIV community, the company is able to operate in a way that takes into account the views, needs and expectations of those affected.

In developing countries, Positive Action seeks to support local communities to access the latest accurate information, acquire and develop new skills and address prevention and care in an integrated, systematic and culturally sensitive manner.

Community Programmes

The company has committed millions of Rands to programmes aimed at helping to prevent the spread of HIV/AIDS and improve the quality of life of those living with HIV/AIDS. These include:

* HIV Infant Care programme - Gauteng. Glaxo Wellcome South Africa is one of two corporate sponsors supporting this unique endeavour run by the National Institute of Community Development and Management (NICDAM) and Cotlands Baby Sanctuary. There is a special focus on orphaned and HIV-infected children.

* Sweetwaters Drop-in Centre, KwaZulu-Natal. This centre has a dual purpose: to provide a refuge for people with HIV/AIDS and to educate the community on the prevention of HIV/AIDS and the care of those with the disease. It is being developed by Glaxo Wellcome South Africa under the auspices of the HIV/AIDS Directorate of the province's Department of Health, supported by the local community and NGOs.

* HIV/TB initiative - pilot programme. Glaxo Wellcome is also sponsoring the pilot phase of an HIV/TB initiative, which is being run under the auspices of the University of the Witwatersrand in conjunction with the regional Department of Health. Its main aim is to measure the impact of community intervention on the spread of HIV/AIDS and tuberculosis, two of the country's biggest killers.

* Victim-friendly crisis centres in Gauteng: In response to the plea by President Mbeki for the speedy establishment of centres for abused women and children, Glaxo Wellcome has committed its support to five of ten crisis centres being established by the Department of Health throughout Gauteng. The company is sponsoring the refurbishment of these facilities to make them a safe and comforting haven for victims of violence. The aim is to ensure that all the services and trained personnel required to treat and process victims of violence in a sympathetic but efficient manner will be available on a 24-hour basis at one convenient location in each district.

iCME: HIV training/literature . Under this programme, which has been running for more than 8 years, trained nursing sisters go out to rural communities to train healthcare workers in the State sector, doctors and patients in the prevention and treatment of HIV/AIDS. There is no monetary benefit to the company.

The company has now expanded our education activities to include 'centres of excellence'. In March, our HIV/AIDS team held a weekend seminar in Rivonia for general practitioners at which all aspects of the disease were discussed - not only treatment but also psychosocial and legal issues. Among the speakers were attorneys, medical leaders in HIV/AIDS, people with AIDS, as well as our CME nursing sisters.

B: Developing countries' initiative

As 90 percent of people with HIV/AIDS live in developing countries, Glaxo Wellcome has a strong 'Developing Countries Initiative'. It was also a founding partner of the UNAIDS HIV Drug Access Initiative. The primary aim of this two- to three-year pilot programme, announced in November 1997, is to find ways to adapt or augment health infrastructure in developing countries to support the effective distribution and use of HIV medicines. Both programmes also look at opportunistic diseases and sexually transmitted diseases (STDs). There is no short-term monetary benefit to the company from such initiatives.

C: Internal company policy

Glaxo Wellcome South Africa's first policy on HIV/AIDS was introduced in 1991, long before most corporations had taken any steps to help employees. The programme includes the following:

* Policies and practices that are clearly defined, understood and consistently followed.

* Formal and informal education activities for all staff - educational material such as leaflets and posters are distributed to employees.

* Condom distribution systems that make condoms readily and consistently available.

* Diagnosis and treatment, at our on-site Occupational Health Centre, of STDs.

* Counselling and support services for employees and families.

* Voluntary and confidential testing services.

D: South African Business Council on HIV/AIDS (SABCOHA)

Glaxo Wellcome is a charter member of the Council, a business initiative to help fight HIV/AIDS in South Africa.

5. Research

Worldwide, Glaxo Wellcome spends a large portion of its research and development budget on HIV/AIDS research, which is a tope priority for the company, as is research on other diseases endemic to developing countries - such as malaria, hepatitis B and tuberculosis. The increasing incidence of TB parallels the dramatic increase in the prevalence of HIV/AIDS, especially in South Africa. Recognising this and responding to a call from the World Health Organisation, Glaxo Wellcome initiated Action TB several years ago.

This unique research project is a collaborative effort involving not only Glaxo Wellcome scientists but also academics in the UK, South Africa, Canada and the USA. Its aim is to deliver a new drug that will either shorten treatment duration or effectively tackle multi-drug resistant tuberculosis. The company committed a further 10 million Pounds Sterling to the study in 1998, bringing its total funding thus far to 20 million Pounds Sterling.

Action TB is the largest research project of any description in South Africa, and about R40 million has been invested locally to date. A significant offshoot of Action TB has been the development of numerous community projects, especially in the Western Cape, aimed at the upliftment of people living with HIV/AIDS and TB.

The company is also a long-term supporter of the International AIDS Vaccine Initiative, in the search for a vaccine which will help prevent people from acquiring the virus. Clinical trials are expected to begin later this year.

6. Cost of HIV/AIDS Treatment

Affordability of the drugs that ease the pain and suffering of people living with HIV/AIDS has caused confrontation between drug manufacturers, activists and government ever since the HIV/AIDS epidemic began.

At its heart are people living with HIV/AIDS who want drugs to be made available to them by the Government. These expectations heighten tension between government and pharmaceutical manufacturers

Preferential pricing and mother-to-child transmission

Glaxo Wellcome is committed to making its medicines affordable in developing countries. It is, for example, as far as we know, the only company to have a clear, global public sector preferential pricing policy for developing countries whereby our HIV medicines are offered at up to a 75 percent reduction from world average prices.

Recent research published in the prestigious British Medical Journal shows that, at this price, AZT® is highly cost-effective for the prevention of mother-to-child transmission of HIV in a developing country setting and can even save overall healthcare costs.

The company's preferential pricing on AZT has advanced from being an offer to actually being implemented through the State Tendering Authority. Glaxo Wellcome has repeated the preferential offer on numerous occasions since but have had no firm response from the South African government.

Cheaper drugs as part of a broader solution

Pharmaceutical companies play an important role in assisting people infected and affected by the disease, but Glaxo Wellcome strongly believes the persistent focus on the price of AZT is misleading and unhelpful - and that cheaper medicine is not the primary issue.

The facts are that:

iMany persons living with AIDS in South Africa do not have access to anti-retroviral medicines. The government has recently declared its policy not to concentrate on providing anti-retrovirals, but rather to focus on opportunistic infections. Glaxo Wellcome appreciates the huge challenge that faces government, but believes that providing anti-retrovirals to prevent mother-to-child-transmission is one option which should be considered, and the company would welcome the opportunity to be a player in this regard.

* The company strongly believes that the persistent focus on the price of AZT® is misleading and unhelpful - and that cheaper medicine is not the primary issue. There is virtually no difference between the price of AZT from Glaxo Wellcome in South Africa, and generics available from other countries.

* In order to address the broader needs of HIV/AIDS patients, the company sees a need for 'a clear Government-led policy, adequate infrastructure, appropriate budgets and integrated programmes'. The disease will only be successfully managed in the presence of a clear Government-led policy, adequate infrastructure, appropriate budgets and integrated programmes. Drugs alone could not offer the solution.

* In a larger context, to view the cost and availability of HIV/AIDS drugs within a vacuum is also detrimental. These treatments constitute only a small part of the overall cost of combating the disease - which necessitates various elements including diagnostic tests, counselling, medical and nursing costs, STD screening and treatment of opportunistic infections.

* This is not about profit. A Government decision today to introduce universal access to AZT treatment for mother-to-child transmission would have no meaningful impact on the company's profitability in South Africa, nor on Glaxo Wellcome's global share price.

* AZT is only one of nine anti-retrovirals available in SA from a number of manufacturers, and one of the least expensive. AZT is usually taken in combination with other drugs and in triple therapy, used for general treatment of HIV, constitutes only 17% of the overall treatment costs. In preventing mother to child transmission, the cost of AZT constitutes 30% of the total treatment costs (or projected at less than 0.2% of the national health budget). Not only is this affordable, but independent published research has shown this to be truly cost-effective in the South African context.

* Beyond South Africa's borders, where government's have shown their willingness to move forward, Glaxo Wellcome's initiatives with other African countries, including Uganda, Côte d'Ivoire and Botswana, are already providing positive benefits. Within established policy and infrastructure in these countries, Glaxo Wellcome has, together with donor agencies such as UNICEF and others, offered a combination of free drugs and preferential pricing, so that the drugs can be more affordable.

CONCLUSION

There are many role-players who must become involved in the fight against HIV/AIDS in South Africa - both within and beyond the healthcare sector - if the country is to have any chance of stemming the epidemic. From Glaxo Wellcome's side, in addition to preferential pricing, the company will continue its commitment to a broad programme of HIV education, prevention and community care, which forms part of the company's Positive Action campaign and its contribution to the Partnership Against AIDS programme.

Glaxo Wellcome would welcome playing a big part in bringing affordable healthcare to South Africa, and would want to be engaged in reconstruction and involvement in broader solutions.

We applaud the government for holding these public hearings on HIV/AIDS and welcome the move forward towards a clear, coherent strategy. If this is formulated with input from all stakeholders, including the pharmaceutical industry, it will then attract donor funding from outside the country to help the government deal with its most pressing and significant public health problem.