GSK, patent pooling and open innovation

by Andrew Watson on 16 February 2009

The Guardian on Friday had a story about GlaxoSmithKline (GSK) changing their strategy towards medicine in the developing world: Drug giant GlaxoSmithKline pledges cheap medicine for world’s poor. As part of this strategy, GSK is pledging to:

Cut its prices for all drugs in the 50 least developed countries to no more than 25% of the levels in the UK and US – and less if possible – and make drugs more affordable in middle-­income countries such as Brazil and India.

Put any chemicals or processes over which it has intellectual property rights that are relevant to finding drugs for neglected diseases into a “patent pool”, so they can be explored by other researchers.

Reinvest 20% of any profits it makes in the least developed countries in hospitals, clinics and staff.

Invite scientists from other companies, NGOs or governments to join the hunt for tropical disease treatments at its dedicated institute at Tres Cantos, Spain.

While all of these initiatives are laudatory, the cynic in me thinks that this is just one huge dose of “Corporate Social Responsibility” as a way to counter negative publicity (the article mentions The Constant Gardner and AIDS treatment pricing in developing countries as examples). Beneficial, but still ultimately self-serving. On the IP front, the patent pooling is no exception (though again, can definitely be a Good Thing).

Why? Because as I understand it, “neglected diseases” are neglected because of basic commercial reasons – finding a cure or treatment doesn’t represent a significant financial opportunity. These diseases aren’t likely in the core scope for GSK’s future blockbuster drug research, and so pooling these patents doesn’t impact their future commercial plans. The upside for GSK in sharing these patents (and perhaps the know-how behind them) is that they may lead to a cure or treatment and thus lead to more positive PR for GSK.  The upside for humanity is that previously neglected diseases may see cures/treatment.

Sounds like a win/win.

This also leads me to note that thinking about open innovation could include ways to spin out or transfer IP for effects beyond simply generating revenue. Here, GSK uses IP it has already developed to derive a different kind of benefit. It follows what I see as the core thought behind open innovation:

Don’t only look within your company as part of your innovation/business strategy.

What do you think?

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MOVE Design (+45 3511 0518) » Designers’ social responsibility
07.28.09 at 5:30 pm

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Alexander Schroll 02.26.09 at 9:33 am

Very interesting article!

As outbound open innovation is still unknown and unpopular it is fantastic that GSK is stepping forward and just published their unused intellectual property. I hope many more examples like that will arise in the future.

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