Company Report Cards

Access to Medicine Index 2016

The 2016 Access to Medicine Index includes a set Sales and Operations of 20 company report cards, which each provide a General description of the company’s operations, contextualised analysis of one company’s perfor- revenue per region and geographical reach. mance in the 2016 Index. This includes a summary of its strengths and weaknesses, any best and Portfolio and Pipeline innovative practices, as well as the drivers behind Analysis of the company’s portfolio of marketed changes in its ranking. Each report card includes products and pipeline of R&D products that fall overviews of the company’s portfolio and pipe- within the scope of the Index, in line with specific line, and identifies tailored opportunities for it to inclusion and exclusion criteria. This section looks increase access to medicine. at the size and focus of the company’s portfolio The report cards are divided into six sections: and pipeline, whether the company has products that are considered first-line or are on the WHO Performance Essential Medicines List; whether it is developing Explanation of the company’s position in the 2016 innovative products or adapting existing products Index and summary of its access-to-medicine per- to suit the needs of people in low- andmiddle-in- formance, including the drivers behind the compa- come countries, and whether it develops products ny’s changes in ranking and the main areas where it through partnerships. scores well or poorly compared to peers. Performance by Technical Area Changes since 2014 Overview of the company’s performance in each Update on where the company’s access-to-med- area measured by the Index, including descriptions icine performance has notably changed since the of: 2014 Index (positive and negative changes), and • The company’s position in the Technical Area where its performance has remained static. It subrankings; includes new or expanded commitments, strate- • Main areas where the company performs well or gies, activities and programmes. poorly; • Significant changes and developments since Opportunities 2014; and Tailored opportunities for the company to improve • Innovations and best practices. access to medicine, taking account of its R&D pipeline, product portfolio, current equitable pricing strategies and approach to IP management, among other factors.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 79 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . GlaxoSmithKline plc 1 (2014)

Stock Exchange: XLON • Ticker: GSK • HQ: Brentford, UK • Employees: 101,255

Ranking by technical area Ranking by strategic pillar Management 4.2

Compliance 2.2

R&D 3.6 Leader

Pricing 3.2 Leader

Patents 3.4

Capacity 3.7 average leader 0 0 4 Leader 8 . Donations . . 4.0 . 1 4 3 3 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

GSK is in 1st place for the fifth time. It is the most access-ori- projects that target independently identified, high-priority ented company in the Index, with a clear access-to-medi- product gaps. It leads in product donations and in applying cine strategy that aligns with its corporate strategy, and com- equitable pricing strategies, and is a leader in voluntary licens- pany-wide ownership and accountability for access. Its leading and capacity building. However, GSK falls back in compli- ership is reflected in many areas: it has clearly committed to ance: e.g., it was found to have breached criminal law in China R&D for low- and middle-income countries, bases R&D part- for bribery. GSK has taken steps to prevent such breaches in nerships on access-oriented terms, and has the most R&D the future, including eliminating individual sales targets.

CHANGE SINCE 2014

• Has new policy for mitigating risks of conflicts • Has made progress toward four specific R&D • Commits to disclosing the status of its patents of interest following recruitment from the commitments, and toward one to improve clin- in the future. public sector. ical trial data transparency. • Publishes a new policy on not filing for • Was found to have breached laws and codes • Signed the Declaration by the Pharmaceutical, or enforcing patents in Least Developed related to corruption and unethical marketing Biotechnology and Diagnostics Industries on Countries and low income countries (LICs). multiple times, including a breach of criminal Combating Antimicrobial Resistance. law in China for bribery. • Commits to licensing products in lower-middle • Has multiple new R&D IP-sharing agreements income countries (LMICs). • Has more products with equitable pricing (via WIPO Re:Search). strategies than in 2014. • Increases capacity building efforts, with an • Improves its accountability for its sales agents’ innovative approach to building R&D capacity pricing practices. in Africa that targets local skills gaps.

OPPORTUNITIES

Continue innovating to strengthen compliance status of all of its products, providing informa- Continue to target known needs through inno- systems. GSK has introduced innovative initia- tion on where each product has been filed for vative and adaptive R&D. GSK should leverage tives and policies to strengthen its compliance registration and where it has been approved, as its strength at engaging in R&D that addresses with laws and regulation. It has an opportunity well as the dates of registration, per country. global health priorities. The company can con- to further foster innovation in this area, and to tinue to develop diverse product types that share its findings with the industry. Operationalise new commitment to engaging target defined, high-priority product gaps. in voluntary licensing. GSK can actively identify Provide pricing guidelines to third-party sales generic medicine manufacturing partners for the Ensure access to products on the WHO EML. agents. GSK can provide pricing guidelines as non-exclusive voluntary licensing of products GSK has one of the largest numbers of prod- a standard practice to third-party sales agents for high-burden diseases outside of HIV/AIDS. ucts on the WHO Model Essential Medicines (distributors, wholesalers, etc.) in low- and mid- Possible products could include fluticasone furo- List (EML). GSK can evaluate access barri- dle-income countries, depending on the local ate (Flixotide®) and salbutamol (Ventolin®), ers to these products in all low- and middle-in- market, supply chain, and legal and regulatory both first-line treatments for respiratory dis- come countries. It can ensure their availabil- systems. eases listed on the WHO Model Essential ity and affordability, aligning with demand and Medicines List (EML). In support of this commit- the availability of alternative products in specific Publish information about products’ registra- ment, GSK can also fulfil its commitment to dis- countries. tion status. GSK can publish the registration close patent statuses.

80 Access to Medicine Index 2016

Sales in countries in scope Turnover by segment (2015) 72 MN

6,028 MN

GBP 23,923 MN

3,657 MN 14,166 MN

Pharmaceuticals Corporate and other Vaccines unallocated turnover Consumer Healthcare In scope, has sales Turnover by geographic region In scope, has no sales

Not in scope 26,000 24,000 22,000 MN GBP 20,000 SALES AND OPERATIONS 1 8,000 1 6,000 1 4,000 GSK operates through three divisions: phar- research, development, and commercialization 1 2,000 maceuticals, vaccines and consumer health- of HIV/AIDS medicines. In 2014, the company 1 0,000 8,000 care. Its core areas of research in pharmaceuti- acquired Novartis’ vaccine business (excluding 6,000 cals are: HIV/AIDS and infectious diseases, oncol- its influenza vaccines), and divested its marketed 4,000 2,000 ogy, immuno-inflammation, respiratory and rare oncology portfolio to Novartis in return. As part 0 diseases. Sales in emerging markets account of the deal, the two companies created a new 2011 2012* 2013* 2014 2015 for approximately 25% of total sales. GSK holds consumer healthcare business, with GSK retain- Rest of world Europe USA Other a 77.4% stake in ViiV Healthcare, a joint ven- ing majority control. *Revenue from divestments. ture with Pfizer and Shionogi focused on the

PORTFOLIO AND PIPELINE Products per disease category 9 GSK has one of the largest portfolios of rele- Among its most recently registered products vant products, and a similarly large pipeline of are first-line treatments for asthma, chronic projects that address the needs of people in obstructive pulmonary disorder and HIV/AIDS. 52 countries in scope: with 111 medicines and vac- Its diverse pipeline targets all four disease cat- 111 cines, and 57 R&D projects. It has a wide range egories in scope. Since 2014, ten of GSK’s R&D 45 of off-patent products that are still relevant for projects progressed along the pipeline: includ- diseases in scope: e.g., albendazole (Zentel®) ing vaccines for paediatric respiratory syncyt- 1 4 for soil-transmitted helminthiasis, amitriptyline ial virus and malaria, which moved into clinical Communicable Non-communicable for unipolar depressive disorders and migraine development. Many of its R&D projects target Neglected tropical Multiple categories prophylaxis, amoxicillin (Amoxyl®) for infec- high-priority product gaps with low commercial Maternal and neonatal tious diseases and clopidogrel (Gridokline®) for incentive, including its preventive vaccine can- GSK’s portfolio includes products for multiple ischaemic heart disease. didates for HIV/AIDS, malaria, TB, typhoid fever infectious diseases, HIV/AIDS, neglected tropical and shigellosis. diseases (NTDs) and mental health conditions.

Pipeline projects First-line treatments and essential medicines

42% 23% 35% 60 11 10 30 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

GSK has multiple R&D partnerships based on terms for ensuring access to A high proportion of GSK’s relevant products are listed on the WHO EML successful products. Together these cover all disease categories, with part- and/or as first-line treatments: e.g., abacavir (Ziagen®), lamivudine (Zeffix®) ners including Fiocruz, Johnson & Johnson and Monash University. and fluticasone (Flixotide®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 5 5 10 4 CD 2 9

NTD 2 2 NTD

MNH MNH 2

NCD NCD 2

Multiple Multiple 0 5 10 15 20 25 30 35 40 45 50 55 0 5 10 15 20 25 30 35 40 45 50 55 Discovery Pre-clinical Phase I Phase II Phase III Received Market Approval Discovery Pre-clinical Phase I Phase II Phase III Received Market Approval

GSK’s innovative pipeline includes several maternal and neonatal health pro- GSK is adapting a range of products, including paediatric formulations, fixed- jects: retosiban for spontaneous pre-term labour, a maternal vaccine for res- dose combinations and products with new routes of administration. It is piratory syncytial virus and a Group B Streptococcus vaccine. adapting a component of its candidate malaria vaccine for thermostability.

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GlaxoSmithKline plc

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Elimination of individual sales targets. GSK has and out-sourced clinical trials are conducted MANAGEMENT implemented a system for compensating sales ethically. RANK 3 SCORE 4.2 professionals that eliminates individual sales targets. Sales staff performance measurements High transparency around clinical trials data. Loses leadership but remains on podium. GSK now include level of technical knowledge, quality The company has high standards of clinical trial drops two positions to 3rd, as peers gain the of services delivered and overall performance of data transparency, including providing scientific edge in access management. It maintains an GSK’s business. Nevertheless, GSK does not dis- researchers access to patient-level data upon overall good performance here, with strengths in close the payments it makes to healthcare pro- request, via clinicalstudydatarequest.com. all areas of measurement except innovation. fessionals working in countries in scope. ▶ Innovation: signing on to combat antimi- Access strategy aligns with corporate strategy. Lobbying activities are transparent and appear crobial resistance. GSK signed the Declaration GSK’s access strategy aligns with its corporate responsible. GSK is transparent about its policy by the Pharmaceutical, Biotechnology strategy and focuses on pricing, innovative per- positions on access. It has a policy of not making and Diagnostics Industries on Combating formance incentives and marketing. It includes political contributions, including in the USA. Its Antimicrobial Resistance in January 2016, an Africa 2020 strategy with access objectives. US branch has a Political Action Committee for thereby committing to investing in R&D that Access is a driver for the company’s vaccines and employees to make contributions. aims to meet public health needs. ViiV Healthcare businesses. Has breached criminal law in China for bribery. Shares intellectual property with several part- Company-wide ownership of access. GSK’s GSK has been found in breach of criminal law in ners. GSK shares intellectual property for Corporate Executive Team is accountable for China for bribery of non-government person- research into HIV/AIDS, malaria, TB and NTDs. ensuring access objectives and progress toward nel to obtain commercial gains. It received a fine The company has reached several new agree- each target are achieved. Each layer of targets of GBP 297 mn. It has also been found in breach ments via WIPO Re:Search, as of 2015, includ- and actions has accountable owners. Progress of codes of conduct for ethical marketing three ing providing a researcher at the University of against these commitments is reported to the times, and of civil law in the US during the period British Columbia with a set of proprietary com- board-level Corporate Responsibility Committee. of analysis. pounds with different anti-malarial properties.

Top performer in stakeholder engagement. ▶ Innovation: revolving-door policy to prevent GSK has a clear strategy for stakeholder engage- conflicts of interest. GSK introduced a “cool- PRICING, MANUFACTURING & ment, which includes processes for engagement ing-off” period for new employees from the DISTRIBUTION by its local offices. Local stakeholder perspec- public sector: for six months, they cannot work RANK 1 SCORE 3.2 tives are collected during all phases of the com- on projects they were involved with in their pre- pany’s activities. GSK publishes its stakeholder vious role. This includes a ban on direct engage- Rises six places to become the leader. GSK engagement information. ment with former colleagues still working on jumps from 7th to 1st in 2016, taking the lead those projects during the cooling-off period. in equitable pricing, notably for its considera- Uses financial and non-financial incentives to tion of socio-economic factors in equitable pric- reward performance. GSK uses both finan- ing strategies across its portfolio. All its prod- cial and non-financial incentives to reward good RESEARCH & DEVELOPMENT ucts with equitable pricing consider socio-eco- performance and motivate employees to per- RANK 1 SCORE 3.6 nomic factors. form on access-related issues. Its Partnership Associates Programme allows employees to R&D commitments tied to clear targets. GSK Equitable pricing strategies for more products. complete internal secondments and work on has a long-standing commitment to develop- GSK has more products with equitable pricing Positive Action, the company’s HIV/AIDS com- ing products and technologies for the benefit of strategies than in 2014, covering a broad range munity partnership programme that has been global health. Its R&D commitments are regu- of diseases, including HIV/AIDS, lower respira- implemented in more than 30 countries. larly reviewed and updated in response to stake- tory infections, asthma, pertussis and hyperten- holder feedback. Progress is published yearly in sive heart disease. Some (38%) of GSK’s prod- its Responsible Business Supplement. ucts have equitable pricing strategies that target MARKET INFLUENCE & COMPLIANCE priority countries (disease-specific sub-sets of RANK 9 SCORE 2.2 Commitment to R&D partnerships, but no countries with a particular need for access to policy. GSK has a broad commitment to con- the product in question). These reach 35% of Compliance failure, including in China, leads to ducting R&D and engaging in partnerships that corresponding priority countries. In absolute drop of four positions. GSK dropped four posi- support access. However, the company has no terms, GSK has the most products with equita- tions, out of the top five, due to poor compliance clear policy to ensure access-oriented terms are ble pricing strategies that target priority coun- and multiple settlements relating to unethical included in its research partnerships. tries. It considers more socio-economic factors behaviour. GSK is now implementing new sys- that determine affordability than any company tems and policies for improving compliance. Takes measures to ensure clinical trials are per strategy, on average. conducted ethically. GSK has policies in place and takes measures to ensure its in-house

82 Access to Medicine Index 2016

Tracking products to the pharmacy to facilitate include access-oriented terms, and cover a com- ▶ Best practice: approach to R&D capacity recalls. GSK has product tracking systems in paratively high number of middle income coun- building. GSK has many local R&D partnerships, countries in scope that can trace products to the tries with high HIV/AIDS prevalence, through, for particularly in sub-Saharan Africa and Latin wholesaler and distributor level, with onward example, a tiered royalty structure for dolutegra- America. Most specifically address local needs, traceability via local systems to the pharmacy vir (Tivicay®), a treatment for HIV/AIDS. and some are long-term, such as the GSK’s level. The company uses this system to monitor engagement with Fiocruz in Brazil to develop stock returns from agreed outlets (e.g., whole- Broad acknowledgement of countries’ rights, new medicines for NTDs, initially Chagas disease salers, pharmacies, etc.) and report on stock as codified in the Doha Declaration. GSK makes and leishmaniasis. recoveries in the case of a recall. a comparatively broad acknowledgement of the rights agreed for national governments in the ▶ Innovation: strengthening research and Pricing guidelines for in-house employees. Doha Declaration on the TRIPS agreement and supply chain management capacity in Africa. GSK has pricing guidelines and monitoring and public health, and outlines its process for dis- GSK has two innovative capacity building initi- auditing mechanisms that govern in-house tancing itself from trade association positions atives: through its Africa 2020 strategy, it aims employees. (e.g., on access) that it disagrees with. to fill local R&D skills gaps; and its mVacciNa- tion partnership aims to improve vaccine supply Weak disclosure of registration information. ▶ Best practice: clarity in approach to intellec- chain management in Mozambique (scaled up GSK does not publish its decision-making cri- tual property management. GSK clearly indi- since 2014). teria or product registration status. GSK’s reg- cates where it is prepared to forego filing for istration commitment is confidential. The com- or enforcing patents (in LICs and LDCs), where pany performs relatively poorly. It has filed to it is prepared to license, for which products PRODUCT DONATIONS register the majority of its 10 newest products in and it gives an indication of the terms it would RANK 1 SCORE 4.0 some (32%) priority countries (disease-specific consider. sub-sets of countries with a particular need for Leader in product donations. GSK moves from access to the product in question). ▶ Best practice: permitting supply where pat- 3rd to 1st position. It donates the largest volume ents are not enforced. GSK achieves a broad of products, through its lymphatic filariasis (LF) Leader in adapting brochures and packag- geographic scope in its licence for dolutegravir and soil-transmitted helminthiasis donation pro- ing materials for rational use. GSK adapts bro- (Tivicay®) by agreeing to permit supply outside gramme, to which it is committed long-term. chures and packaging in a variety of ways in of the agreed territory where patents are not in order to facilitate rational use at different levels force, regardless of whether a patent is in place Pledged to donate albendazole (Zentel®) to of the health system. For example, it addresses in the country of manufacture. WHO until elimination. GSK has pledged to language needs using tri-lingual export packs for donate albendazole (Zentel®) to WHO until vaccines, addresses literacy needs by using pic- LF is eliminated. It has committed to donating torial comic books for patients and images for CAPACITY BUILDING Zentel® to control soil-transmitted helminthia- administrators. RANK 2 SCORE 3.7 sis among school-age children. It has donated 1.7 billion tablets since 2014: it is the largest dona- ▶ Best practice: equitable pricing for first-line Consistently strong in meeting local capac- tion programme of any company in scope. broad spectrum antibiotic. GSK’s equitable pric- ity building needs. GSK improves on its strong ing strategy for amoxicillin/clavulanate potas- performance in 2014 with a comprehensive Has structured international donation poli- sium (Augmentin®) takes multiple socio-eco- and innovative approach to building capacity in cies. GSK publishes its global pharmaceutical nomic factors into account: (1) disease burden; response to local needs in a range of countries. policy for its donations approach. In July 2015, (2) healthcare system funding; (3) demograph- The company is particularly strong in building it updated its standard operating procedure ics and population distribution; (4) level of eco- capacity outside the pharmaceutical value chain (SOP) with a new approval process and report- nomic development; (5) inequality levels; (6) and in pharmacovigilance. ing requirement for ad hoc donations. Its policy supply chain factors; (7) patient awareness; and complies with WHO and PQMD guidelines. (8) appropriate use by patients and physicians. It Leader in strengthening pharmacovigilance targets high-need countries, with different pric- systems. GSK voluntarily shares safety data with Involved in numerous emergency relief efforts. ing mechanisms in different countries. authorities and updates safety labels for prod- GSK donated antibiotics and other essential ucts in countries in scope. It has an above-aver- medicines for humanitarian aid in 93 countries, age number of activities to build local pharma- through its partners AmeriCares, Direct Relief, PATENTS & LICENSING covigilance capacity, focusing on Latin America. IMA World Health, MAP International and Project RANK 2 SCORE 3.4 HOPE. The company is transparent about the Leader in building capacity outside the value value of its product donations, reporting figures Among the leaders once again in IP manage- chain. GSK’s approach to philanthropic activi- per partner on its website. ment. This is due to its consistent approach to ties is very strong: it aims to sustainably address supporting affordability and supply by licensing local health needs and requires impact assess- Strict monitoring and auditing requirements. its HIV/AIDS products and through the transpar- ment. The company discloses a number of initia- GSK requires annual shipping reports from part- ency of its intellectual property strategy. tives to build capacities outside the pharmaceu- ner organisations. GSKs partners and third-party tical value chain, including through its Save the consultants conduct field visits to evaluate and Committed to patent transparency. Though Children partnership. assess in-country partners. In addition, part- GSK has not yet made any disclosure of its ners are required to send impact reports demon- patent statuses in countries within scope, it has Above average in building manufacturing and strating use and reach. For longer-term health- committed to doing so. supply chain management capacity. GSK has care programmes, they must also send narrative a relatively high number of activities to build reports and case studies. Consistent engagement in voluntary licens- manufacturing capacity in-house and with third ing. GSK continues to pursue a broad licensing parties (for example, in India and Brazil) and approach for ARVs via ViiV healthcare and the strengthen local supply chains (e.g., in Pakistan Medicines Patent Pool. Its licensing agreements and Vietnam).

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 83 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Johnson & Johnson 3 (2014)

Stock Exchange: XNYS • Ticker: JNJ • HQ: New Brunswick, NJ, US • Employees: 127,100

Ranking by technical area Ranking by strategic pillar Management 3.9

Compliance 2.3

R&D 3.3

Pricing 2.6

Patents 2.1

Capacity 3.1 average leader 2 . 2 3 3 0 . . Donations 3.8 . 3 3 3 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Johnson & Johnson rises one place to 2nd, with leading multiple socio-economic factors when setting prices between approaches in several areas. Its strong performance is driven countries, as well as in demonstrating that pricing strategies by a broad access strategy, with a clear direction for its long- have been implemented. It has expanded its commitment not term access programme in Africa. It has a large relevant pipe- to assert patent rights. It is the most active in product dona- line, and has moved a greater proportion of projects along the tions, with six programmes across three disease areas. It is pipeline than in the previous Index. Its use of equitable pric- strong in building capacity, particularly in supply chain man- ing remains constant. It is among the leaders in considering agement and pharmacovigilance.

CHANGE SINCE 2014

• Has a new Global Public Health organisation, • Has moved more projects along the pipe- plants in India, providing tailored support for established to address global health problems line than during the previous analysis period achieving high standards (e.g., by assigning a in specific disease areas. (2012-2014). person-in-plant).

• Increases the transparency of its marketing • Has equitable pricing strategies for the same • Newly commits to long-term product donation and lobbying activities. number of products as in 2014. programmes for TB and HIV/AIDS.

• Has a 50% larger pipeline for diseases in scope • Has expanded the geographic scope of its than in 2014, with new projects for a wide pledge not to assert IP rights over darunavir range of diseases. (Prezista®)

• Is piloting a comprehensive process for assessing capacity gaps in third-party manufacturing

OPPORTUNITIES

Expand Global Public Health access approach Set registration targets for key diseases. For erage these strengths to become an industry to more disease areas. Johnson & Johnson is pipeline products, Johnson & Johnson can set frontrunner at bringing products to market for active in a wide variety of disease areas. The disease-level targets for registering products high-need diseases. company can expand the remit of its new Global in countries in scope. This helps ensure early Public Health organisation to cover access to access to products in countries that need them Extend pledge not to enforce patent rights, medicine for more disease areas. most. The company can register existing prod- and its engagement in voluntary licensing. ucts, e.g., bedaquiline (Sirturo®), in more coun- Johnson & Johnson can extend its pledge not Expand use of equitable pricing strategies, tries with high disease burdens. Bedaquiline is to enforce IP rights to more high-need products. with addition of intra-country segmentation. on-patent, is used to treat multi-drug-resist- Likewise, Johnson & Johnson can expand its use Johnson & Johnson can expand its inter-country ant TB (MDR-TB) and is on the WHO Model of non-exclusive voluntary licensing to ensure equitable pricing strategies to more products. Essential Medicines List (EML). access to and supply of its on-patent high-need The company can also implement intra-coun- medicines. try equitable pricing strategies in markets with Implement time-bound R&D targets for devel- high-levels of inequality and/or high out-of- oping high-need products. Johnson & Johnson pocket payments. clearly ties its R&D commitments to global health priorities, and is efficient at moving projects along its pipeline. The company can lev-

84 Access to Medicine Index 2016

Sales in countries in scope Sales by segment (2015)

1 3,507 MN

25,1 37 MN USD 70,074 MN

31 ,430 MN

Consumer Pharmaceutical Medical devices In scope, has sales Sales by segments In scope, has no sales Not in scope 70,000

60,000 MN USD

SALES AND OPERATIONS 50,000

40,000 Johnson & Johnson operates in three segments: 30,000 Consumer Healthcare, Pharmaceuticals and Medical Devices. Its Pharmaceuticals segment 20,000 is focused on: cardiovascular and metabolism; 1 0,000 immunology; infectious diseases and vaccines; 0 neuroscience; and oncology. Johnson & Johnson 2011 2012 2013 2014 2015 is present in 69 countries in scope, and its sales Rest of world Asia-Pacic/Africa Europe USA in emerging and frontier markets account for approximately 20% of total sales.

PORTFOLIO AND PIPELINE Products per disease category 4 Johnson & Johnson has a mid-sized portfolio date medicines for four communicable diseases of products for diseases in scope: 49 medicines, and four neglected tropical diseases (NTDs), as 18 3 preventive vaccines, and 4 diagnostics. This well as several vaccines. Together with Cue Inc., includes products for liver diseases, heart dis- Johnson & Johnson is developing a point-of- 56 26 eases, mental health conditions and diabetes. care viral load test for HIV/AIDS. 3

Johnson & Johnson has one of the largest pipe- A number of projects have moved along the 5 lines of projects that address the needs of pipeline since 2014. In 2015, the FDA approved Communicable Non-communicable people in countries in scope: 57 R&D projects three-month paliperidone palmitate (Invega Neglected tropical Multiple categories in total, approximately a third of which target Trinza®) for schizophrenia, which is being regis- Maternal and neonatal high-priority product gaps with low commer- tered in multiple countries in scope. Its portfolio covers all disease categories in scope. cial incentive. Its pipeline has a strong focus on The majority of its projects for communicable dis- mental health conditions, and includes candi- eases target HIV/AIDS and viral hepatitis.

Pipeline projects First-line treatments and essential medicines

1 8% 21 % 61 % 10 7 14 21 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Several research partnerships, such as with GSK and the TB Alliance, include Approximately 60% of Johnson & Johnson’s medicine and vaccine portfo- provisions for broader access to the product following market approval. lio is listed on the WHO EML and/or as first-line treatments: e.g., simeprevir (Olysio®), risperidone (Risperdal®) and darunavir (Prezista®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 11 3 5 CD 5 4

NTD 3 NTD

MNH MNH

NCD 11 3 NCD 2

Johnson & Johnson is developing a range of innovative products. It is target- Johnson & Johnson is adapting a range of products for people in high-need ing respiratory syncytial virus through several projects, including preventive countries, including several fixed-dose combinations for HIV/AIDS and paedi- vaccines for infants and the elderly, which have moved to phase I since 2014. atric formulations targeting TB and soil-transmitted helminthiasis.

85 Access to Medicine Index 2016

Johnson & Johnson

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE accountable to its policies. It regularly con- considers access in emerging economies and MANAGEMENT ducts due diligence and background checks on resource-limited settings. RANK 6 SCORE 3.9 third-parties to check compliance with its policies. It also requires third-parties are trained, Commitment to R&D partnerships, but no Drops 2 positions, as peers improve faster. and for contracts to include specific contractual policy. Johnson & Johnson commits to includ- Johnson & Johnson moves from 4th to 6th, with commitments to abide by all applicable anti-cor- ing access-oriented terms in its R&D contracts. a good overall performance and strengths across ruption laws. However, the company does not have a policy most areas of measurement. that ensures or specifies inclusion of these Some transparency of lobbying activities. measures in its partnerships. Broad access strategy and new Global Public Johnson & Johnson states that it publishes Health organisation. Johnson & Johnson’s the political contributions it makes in countries Comprehensive policy to ensure clinical trials access strategy includes pricing, in-country reg- where this is required by law. The company pro- are conducted ethically. Johnson & Johnson has istration, supply-chain development and drug- vides a list of trade associations of which it is a policies and takes measures to ensure its clin- safety monitoring. The company has established member, but does not disclose how much finan- ical trials are conducted ethically. Its policies a new Global Public Health organisation with the cial support it has provided to them. Johnson & are strong: they include measures on scientific objective of addressing global health issues in Johnson publishes its policy for managing con- requirements, research protocols and provisions maternal, newborn and child health, HIV/AIDS flict of interest. for post-trial access to investigational medicines. and TB. Found to have engaged in unethical behaviour. High transparency around clinical trials. The Top performer in stakeholder engagement. The Johnson & Johnson was found to have breached company upholds high standards of clinical trial company has a clear strategy for stakeholder civil law and codes of conduct multiple times data transparency, including providing scientific engagement, which is needs-based and includes related to unethical marketing activities and fail- researchers access to patient-level data upon directions for its subsidiaries. The company’s ure-to-warn cases. request via an independent review panel (under Global Public Health strategy is based on the the Yale Open Data Access Project). inputs and insights of numerous actors around Comprehensive audit system in place. The com- the world and across sectors. The company is pany’s Corporate Internal Audit division con- ▶ Innovation: signing on to combat anti- transparent about its stakeholder engagement ducts independent audits of its businesses, microbial resistance. Johnson & Johnson activities and processes. addressing compliance, corruption and privacy. signed the Declaration by the Pharmaceutical, Its operating companies are generally audited Biotechnology and Diagnostics Industries on Uses secondment as non-financial perfor- every three or five years, depending on the risk Combating Antimicrobial Resistance in January mance incentive. Its Trust Secondment Strategy profile. 2016, thereby committing to investing in R&D Programme allows employees to share their that aims to meet public health needs. skills and knowledge with NGOs during second- Limited performance in ethical market- ments of three to six months. The programme ing. Johnson & Johnson has a marketing code ensures NGOs gain access to skill-sets they lack, of conduct that also applies to third parties. PRICING, MANUFACTURING & while employees learn about needs in the field. Nevertheless, it has no incentives for sales DISTRIBUTION agents other than sales targets. The company RANK 2 SCORE 2.6 Market Access Counters to track performance. also fails to disclose information about its mar- Among other tools, Johnson & Johnson has a keting activities in countries in scope. Rises 3 places to join the leaders. Johnson & tracking system for measuring the prevalence of Johnson rises into the top three. It is a leader diseases in particular countries. Using public and when it comes to considering socio-economic private reimbursement data, it generates a real- RESEARCH & DEVELOPMENT factors in its inter-country equitable pricing time patient counter based on sales and treat- RANK 3 SCORE 3.3 strategies. It is also a leader in demonstrating ment assumptions. that its strategies are being implemented (evi- Continued strong performance with a large dence is provided in the form of price and vol- pipeline of high-need products. Johnson & ume-of-sales information). It is also a leader in MARKET INFLUENCE & COMPLIANCE Johnson continues to perform strongly in R&D. how it facilitates the rational use of its products RANK 6 SCORE 2.3 Its pipeline is 50% larger than in 2014, and the for populations in need. company has moved a significant portion of its Rises 11 places due to improved enforcement projects along its pipeline since 2014. Same number of equitably priced products. processes. Johnson & Johnson climbs from 17th Johnson & Johnson has equitable pricing strate- into the top ten in this area. This is due to the R&D commitments linked to public health gies for the same limited number of products as good quality of its enforcement processes for rationale. Johnson & Johnson commits to devel- in 2014. Its pricing strategies mainly cover HIV/ third parties and its increased transparency. oping products in order to achieve the maxi- AIDS products, as well as products for TB, viral mum public health impact globally. Its commit- hepatitis and meningitis. Only a few (9%) of its Enforcement processes for third parties. ments are tied to stakeholders’ priorities and to products have pricing strategies that target pri- Johnson & Johnson holds key third-parties major global disease burdens. It systematically ority countries (disease-specific sub-sets of

86 Access to Medicine Index 2016 countries with a particular need for access to PATENTS & LICENSING building local pharmacovigilance capacity, includ- relevant products). Yet, together, these strate- RANK 7 SCORE 2.1 ing a long-term partnership in China. gies target the majority (59%) of corresponding priority countries. For two-thirds of its products Improved performance in multiple areas. Building manufacturing capacity in a range of with inter-country equitable pricing strategies, Johnson & Johnson has climbed into the top countries. Johnson & Johnson demonstrates a the company has taken socio-economic factors ten in this area, in part by engaging with the comprehensive commitment to assessing and into account: including economic development, Medicines Patent Pool and with the Paediatric building capacity for in-house and third-party public health need, disease burden, state of the HIV Treatment Initiative. It has expanded the manufacturers. The company undertakes a healthcare system, costs and the level of out-of- scope of its pledge not to assert patent rights to number of capacity building activities, in Egypt, pocket payments. darunavir (Prezista®). India, Morocco, South Africa and Vietnam.

Pricing guidelines for sales agents. Johnson & Broad geographic scope for Prezista® non-as- Building R&D capacity in China. It has several Johnson’s contracts with sales agents (includ- sert pledge. Johnson & Johnson has expanded partnerships with local research organisations to ing third-party) include price restrictions. Sales its policy of not enforcing its patent rights over build R&D capacity in diverse countries, includ- agents’ prices are monitored and audited for Prezista®, an ARV. This non-enforcement pledge ing their long-term Tsinghua-Janssen Joint some products, in line with local compliance law. now covers 128 countries, including a mix of Research Center on Infectious Diseases in China. lower- and upper-middle-income countries. Partial transparency about where products are Strong approach to philanthropy. It has a very registered. Johnson & Johnson does not pro- Limited transparency around non-exclusive strong philanthropic approach, including target- vide evidence of disease-specific registration voluntary licences. Johnson & Johnson has ing local needs. However, it does not demon- targets. It publishes some information about agreed non-exclusive voluntary licensing terms strate how it identifies, prevents or mitigates products’ registration status (not including when with five or more manufacturers for rilpivir- conflicts of interest when building capacities submissions were filed or approved) for Janssen ine (Edurant®), an ARV. However, it is not fully outside the pharmaceutical value chain. products. Johnson & Johnson has filed to reg- transparent about the terms and conditions. ister more than half (60%) of its newest products in some priority countries (disease-spe- Increased engagement with the Medicines PRODUCT DONATIONS cific sub-sets of countries with a particular need Patent Pool. Johnson & Johnson has built its RANK 3 SCORE 3.8 for access to relevant products). Most of these engagement with the Medicines Patent Pool products were launched between 2011 and 2013. through the Paediatric HIV Treatment Initiative. Rises three positions. It has the most structured One of PHTI’s priorities is to develop an opti- donation programmes: six programmes covering Consistent recall guidelines. Johnson & mised, generic fixed-dose combination of darun- three disease areas, with two new programmes Johnson has globally consistent guidelines for avir and ritonavir for children living with HIV. launched in the period of analysis. issuing drug recalls in all countries in scope where its products are available. It does not pub- Limited support for the Doha Declaration. Launched new HIV/AIDS and TB donation pro- lish information on drug recalls. Johnson & Johnson publicly supports the Doha grammes. In 2015, Johnson & Johnson launched Declaration on the TRIPS agreement and public two new donation programmes. In its new HIV/ Leader in facilitating the rational use of its health. Its support for compulsory licensing is AIDS donation programme, it supports China’s products. Johnson & Johnson provides evidence limited to when the alternatives are exhausted. efforts to treat HIV/AIDS in intravenous drug of adapting brochures and packaging for its HIV/ users. It will donate rilpivirine (Edurant®) to AIDS products, including using local languages Low patent transparency. Johnson & Johnson treat up to 500 HIV/AIDS patients in selected in Anglophone, Francophone and Lusophone makes no direct public disclosure of patent methadone clinics. In collaboration with USAID, Africa, as well as diagrams to take account of status, but publishes the contact details of the Johnson & Johnson will provide 30,000 treat- varying literacy levels. For use at the point of dis- specific person at the company who provides ment courses of bedaquiline (Sirturo®) for TB. pensation, Johnson & Johnson provides dosing them, and invites requests for information. guidelines for its donated paediatric HIV/AIDS Commits to supporting controlling soil-trans- medicines. To address environmental considera- mitted helminthiasis. Johnson & Johnson tions, it uses blister packs in some settings. CAPACITY BUILDING has committed to providing up to 200 million RANK 3 SCORE 3.1 doses annually of mebendazole (Vermox®) for ▶ Best practice in inter-country equitable de-worming treatments until 2020. pricing. For darunavir (Prezista®), which is Strong overall performance in capacity build- on patent and on the WHO EML, Johnson & ing, targets local needs. Johnson & Johnson Commits to quality medical donations. Johnson Johnson considers four socio-economic fac- maintains its solid performance: it is active in all & Johnson’s commitment to quality medi- tors when setting prices. Its pricing strategy for areas with key strengths in building supply chain cal donations is reinforced by its Guidelines for darunavir applies in all priority countries for HIV/ management and pharmacovigilance capacity. Product Donations (GPD), which complies with AIDS (countries with a particular need for access Many of its activities target specific local needs. WHO and PQMD guidelines. to relevant products). Johnson & Johnson sets a not-for-profit price for all sub-Saharan Africa Leader in improving supply chain management. Involved in donations for emergency relief. and all Least Developed Countries. The 800mg It is very active in building supply chain manage- Johnson & Johnson provided ad hoc donations, daily dose of Prezista® is used in second-line ment capacity through partnerships and infor- including diagnostics, pharmaceutical and con- regimens. It is offered at USD 36 per unit (USD mation sharing. Its focus is on sub-Saharan sumer products, and disaster relief donations. 1.20 per patient per day ex-factory) in sub-Saha- Africa (e.g., in Sierra Leone and Zambia). ran Africa and in Least Developed Countries (for Strict monitoring and auditing requirements. both public and private markets). Leader in strengthening pharmacovigilance Johnson & Johnson requires donation partners systems. Johnson & Johnson voluntarily shares to submit annual reports. It coordinates a two- safety data with authorities and updates safety year auditing process to ensure compliance with labels for its products in countries in scope. The agreed conditions for product donation. company has a number of diverse activities for

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 87 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Novartis AG 4 (2014)

Stock Exchange: XSWX • Ticker: NOVN • HQ: Basel, Switzerland • Employees: 122,966

Ranking by technical area Ranking by strategic pillar

Management 4.9 Leader

Compliance 1 .6

R&D 3.2

Pricing 2.5

Patents 1 .4

Capacity 4.0 Leader average leader 1 6 8 0 . 3.5 . . Donations . 1 3 2 3 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Novartis rises one place to 3rd. It has an access strategy tropical diseases (food-borne trematodiases and leprosy). embedded in its broader corporate strategy, and which Novartis takes a comprehensive and innovative approach addresses all segments of the socio-economic pyramid. It is a to capacity building, consistently addressing local needs. leader in filing products for registration, and has applied equi- However, its strengths are not reflected in its compliance table pricing to significantly more products than in 2014. It system or in the transparency of its marketing and lobbying is also a leader in donations: two programmes stand out for activities. Novartis also does not publish patent statuses and their reach and broad coverage, which both target neglected has not engaged in licensing.

CHANGE SINCE 2014

• Established the Novartis Access programme • Is developing an approach that will value the • Has signed the Declaration by the in 2015, which offers a portfolio of 15 on- environmental, social and economic impact of Pharmaceutical, Biotechnology and and off-patent products for non-communica- some of its initiatives. Diagnostics Industries on Combating ble diseases (NCDs) at USD 1 per month, per Antimicrobial Resistance. treatment. • Falls back in compliance, with a settlement following a case of corruption in a country in • Has not published the status of its patents. • Has more than doubled the number of its scope (China). products with equitable pricing. • Partnered with national regulatory authorities • Established a Global Health Group for improv- in Egypt and Mexico in 2015 to improve aware- • No improvement in its accountability for its ing R&D by building a better understanding of ness of the importance of pharmacovigilance. sales agents’ pricing practices. unmet medical needs in low-income countries and responding to them.

OPPORTUNITIES

Plan for the long-term sustainability of its Increase sensitivity of affordability assess- Strengthen and innovate compliance system. Novartis Access programme. Novartis can take ments in low- and middle-income coun- Novartis has general guidelines for interacting steps to ensure the longevity of its new Novartis tries. Novartis can expand its consideration with public officials and supporting political and Access programme. If the programme proves of socio-economic factors in its inter-coun- policy advocacy. It can strengthen its compliance not to be economically sustainable, Novartis can try equitable pricing strategies, to ensure prod- system by building on these with new, specific agree with local stakeholders to ensure patients ucts are affordable, for example, for omalizumab guidelines governing all interactions with differ- covered by this programme retain access to (Xolair®), which is the only registered recombi- ent actors along the medicines supply chain. medicines following the pilot phase. nant monoclonal antibody to treat moderate to severe allergic asthma. Ensure access to products on the WHO EML. Continue to target known needs through inno- Novartis has one of the largest numbers of prod- vative and adaptive R&D. Novartis can leverage Operationalise commitment to voluntary ucts on the WHO Model Essential Medicines List its strength at engaging in R&D for global health licensing. Novartis can operationalise and (EML). It can evaluate access barriers to these priorities. The company can continue to develop broaden its commitment to engaging in vol- products in all low- and middle-income coun- innovative medicines that target defined, untary licensing in Least Developed Countries tries. It can ensure their availability and afforda- high-priority product gaps, and continue its stra- (LDCs) to increase access to its patented prod- bility, aligning with demand and the availability of tegic expansion of adaptive R&D for high-bur- ucts. Further, Novartis can broaden this commit- alternative products in specific countries. den diseases. ment to enable supply to other countries.

88 Access to Medicine Index 2016

Sales in countries in scope Net sales by segment (2015)

9,1 57 MN

USD 9,81 2 MN 49,414 MN 30,445 MN

Pharmaceuticals Alcon Sandoz In scope, has sales Net sales by geographic region In scope, has no sales Not in scope 55,000 50,000

MN USD 45,000 SALES AND OPERATIONS 40,000 35,000 30,000 Novartis is organised in three divisions: company divested its vaccine business (exclud- 25,000 Innovative Medicines, Alcon (eye care products) ing influenza vaccines) to GSK in an assets swap 20,000 and Sandoz (generic medicines). Its pharmaceu- that included the acquisition of GSK’s marketed 1 5,000 tical division focuses on: cardiovascular disease, oncology portfolio. As part of the deal, the two 1 0,000 5,000 respiratory diseases, neuroscience, immunology, companies created a new consumer healthcare 0 dermatology and oncology. The company aims business, with majority control being retained 2011 2012 2013 2014 2015 to expand its portfolio with products for infec- by GSK. Novartis has sales in 77 countries within Asia/Africa/Australasia Europe Americas tious diseases, regenerative medicine and aging. the scope of the Index. Novartis’s focus has recently shifted: in 2015, the

PORTFOLIO AND PIPELINE Products per disease category 7 Novartis has one of the largest portfolios for rel- keting authorisation for three medicines for rele- 12 2 3 evant diseases of all companies in the Index, vant diseases in the next two years, including for and one of the largest pipelines of projects that cardiovascular disease and asthma. address the needs of people in countries in 74 scope: with 74 products and 45 R&D projects. Novartis is developing medicines for ten NCDs, six communicable diseases, four neglected trop- In Novartis’s portfolio, 50 medicines target ical diseases (NTDs) and three maternal and 50 one or more NCDs, including hypertensive and neonatal health conditions. Its candidates for Communicable Non-communicable ischaemic heart disease and unipolar depres- malaria, TB and NTDs target high-priority prod- Neglected tropical Multiple categories sive disorders. In Q4 2015, the company gained uct gaps with low commercial incentive. Several Maternal and neonatal EU approval for sacubitril/valsartan (Entresto®), of its product candidates have progressed along Novartis has 74 medicines for relevant diseases, which has a new mechanism of action for treat- the pipeline since 2014. mainly for infectious diseases, heart diseases, ing heart failure. Novartis expects to file for mar- mental health conditions and respiratory diseases.

Pipeline projects First-line treatments and essential medicines

1 3% 87% 32 10 17 15 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Novartis is collaborating to develop medicines for malaria and dengue, A high proportion of Novartis’ products for diseases in scope are on the among others. WHO EML and/or that are first-line treatments: e.g., omalizumab (Xolair®), budesonide (Miflonide®) and lamprene/rimactane/dapsone.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 4 2 CD

NTD 7 NTD

MNH MNH

NCD 1 9 4 2 NCD

Novartis is developing innovative medicines for all four disease categories. Novartis is adapting products for malaria, TB, maternal haemorrhage, hyper- The majority are in early stages of development. tensive heart disease, lower respiratory infections, diarrhoeal diseases, meningitis and kidney diseases.

89 Access to Medicine Index 2016

Novartis AG

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE MARKET INFLUENCE & COMPLIANCE ing in R&D to meet the needs of people living MANAGEMENT RANK 15 SCORE 1.6 in LICs. The company has a newly established RANK 1 SCORE 4.9 Global Health group that aims to improve R&D Below average compliance results in a drop of by increasing the understanding of unmet med- New leader in this area. Novartis ranks 1st here, four places. Novartis moves from 11th to 15th ical needs in LICs. Novartis has published its rel- rising one position since 2014. The company is position. This is due in part to the settlement evant R&D targets and has a system for annually a leader in all areas, with a best-practice access of a case of corruption in a country in scope reviewing its progress against them. strategy, as well as by innovations in business (China). models and performance management systems. Commitment to R&D partnerships, but no Transparent in some dimensions, but not about policy. Novartis includes access-oriented terms Centralised performance management system, memberships. Novartis is transparent about its in its R&D partnerships for communicable dis- tracks costs of access initiatives. The company lobbying activities and public policy positions, eases and NTDs. However, it does not have a has a centralised performance management including anti-counterfeiting and non-enforce- systematic framework to ensure all partnerships system that uses quantitative and qualitative ment of patents in LDCs. It states that it does are based on access-oriented terms. measures to collect data and appraise perfor- not make any political contributions in coun- mance across its global operations. It also tracks tries in scope. Nevertheless, it is not transparent Comprehensive policy to ensure clinical trials the actual costs of each major access initiative about its memberships of relevant organisations are conducted ethically. Novartis has poli- and reports on these as part of its annual corpo- (such as patient groups). The company has pub- cies and takes measures to ensure its clini- rate responsibility strategy update. lished its conflict of interest policy. cal trials are conducted ethically. Its policies are strong: they include measures on scientific Top performer in stakeholder engagement. Found to have breached corruption law in a requirements, research protocols and post-trial Novartis has a clear, detailed stakeholder country within scope. Novartis agreed to pay provisions. engagement strategy that includes directions USD 25 mln to settle charges that violated the for the company’s subsidiaries. Furthermore, the Foreign Corrupt Practices Act by making illegal High transparency around clinical trials. The company is transparent about its stakeholder payments to health care providers in China. company upholds high standards of clinical trial engagement activities. data transparency, including providing scientific Comprehensive auditing system in place. The researchers access to patient-level data upon ▶ Innovaton: two access-oriented business company’s internal audit department checks for request, via clinicalstudydatarequest.com. models. Novartis Access offers 15 on- and compliance with internal anti-bribery, anti-cor- off-patent medicines for NCDs in lower-middle ruption and ethical marketing codes. The scope ▶ Innovation: signing on to combat antimicro- income (LMICs) and low-income countries (LICs) of these activities covers the whole company bial resistance. Novartis signed the Declaration at the cost of USD 1 per month per treatment. (territories, divisions and functions). It applies to by the Pharmaceutical, Biotechnology This has significantly increased the number of all company staff, but only to some third parties. and Diagnostics Industries on Combating Novartis products with equitable pricing strate- Antimicrobial Resistance in January 2016, gies. In 2015, it set up ComHIP, a three-year pro- Mixed performance in ethical marketing and thereby committing to investing in R&D that gramme designed to evaluate the impact of an anti-corruption. Novartis has a marketing code aims to meet public health needs. innovative healthcare model on hypertension of conduct. Its incentives for sales personnel are control and self-management in Ghana. not related only to sales targets. Nevertheless, the company does not provide information PRICING, MANUFACTURING & ▶ Innovation: performance management sys- about its marketing activities or the payments DISTRIBUTION tems. Novartis is exploring an approach to it makes to individuals or organisations in coun- RANK 3 SCORE 2.5 enable it to quantify, measure and value the tries in scope. The company has whistle-blower environmental, social and economic impact of facilities but anonymity is not fully ensured. Rises ten places into the top three. Novartis its social activities and related initiatives, among jumps from 13th in 2014 to 3rd place. It improves other activities. This information could also its performance in equitable pricing and is a inform the company’s decision-making process. RESEARCH & DEVELOPMENT leader in filing to register products in high-bur- RANK 5 SCORE 3.2 den countries. ▶ Best Practice: Novartis Access Strategy Framework. The company’s Access to Medicines Holds strong position with one of the largest Significant expansion of equitable pricing strat- Framework guides the development of its equi- pipelines in scope. Novartis confirms its strong egies. Compared to 2014, Novartis has more table and affordable solutions targeted toward position in R&D, with clear R&D commitments than doubled the number of its products with all segments of the socio-economic pyramid. and a large pipeline spanning all four disease cat- equitable pricing strategies. This is in part due Access initiatives are embedded in Novartis’s egories. The company performs well once again to its Novartis Access programme and to ten- business divisions. Each one has an implementa- in clinical trial conduct and transparency. ders for products that previously had no equi- tion plan that aligns with its business. table pricing strategies. The company’s pricing R&D commitments tied to clear targets. strategies cover a wide range of diseases, includ- Novartis has a clear commitment to engaging hypertensive heart disease, ischaemic heart

90 Access to Medicine Index 2016 disease, lower respiratory infections and diabe- Open to non-exclusive voluntary licens- PRODUCT DONATIONS tes. In total, 49% of its products for diseases in ing. Novartis supports its commitment not to RANK 5 SCORE 3.5 scope have pricing strategies that target priority enforce patent rights with a public agreement to countries, reaching 31% of corresponding prior- grant licences to third parties for supply to the Novartis remains in 5th place. Novartis remains ity countries (disease-specific sub-sets of coun- UN-defined LDCs. 5th with two on-going structured donation pro- tries with a particular need for access to rele- grammes. The company is involved in two WHO vant products). No transparency around its position on trade donation programmes for NTDs: targeting food- policy. Novartis has not published its position on borne trematodiases and leprosy. Leader in registering products where they are the Doha Declaration on the TRIPS agreement needed. Novartis commits to registering prod- and public health. However, it did support the Continues to eliminate leprosy. Since 2000, ucts for a sub-set of diseases in some low- and time-based extension to LDCs. Novartis has been providing high-quality mul- middle-income countries but provides no time- ti-drug therapy (MDT) free of charge through frame. Nevertheless, in practice, it has filed to WHO. The aim is to make the therapy availa- register all of its ten newest products in the CAPACITY BUILDING ble to all leprosy patients. In 2015, Novartis has majority of corresponding priority countries RANK 1 SCORE 4.0 renewed its pledge with WHO to work to end (disease-specific sub-sets of countries with a leprosy, extending its donation of MDT medi- particular need for access to relevant products). Leader in capacity building, consistently cines for leprosy to 2020. Some of these products were first marketed in addresses local needs. Novartis improves on its 2015 or 2016. already strong performance in 2014 by demon- Complies with external standards. Novartis dis- strating a comprehensive approach to capac- closes its donations policy, which covers ad hoc Consistent recall guidelines. Novartis has glob- ity building across all areas measured. It con- and structured donations, and is based on WHO ally consistent guidelines for issuing drug recalls sistently addresses local needs, with a focus on guidelines. in all countries relevant to the Index where its sub-Saharan Africa, performing particularly well products are available. It does not publish its in capacity building outside the pharmaceutical Transparent on outcome measures. Monitoring drug recalls. value chain and R&D. on the ground is mainly done by Novartis’ donation partners. Novartis receives regular reports Monitors prices where possible. For countries in Leader in building capacity outside the value from its partner organisations. Its donation tar- scope and where legally possible, Novartis mon- chain. Novartis takes a very strong approach gets are captured in its Access to Healthcare itors the prices charged by its distributors and to philanthropy, primarily through its Novartis Table, which is publicly available on the Novartis works actively with them in an effort to ensure Foundation: it targets local health needs, aims corporate website. This is annually updated and compliance with agreed upon price ceilings, in for sustainability, and includes impact measure- published with the Novartis Annual Report and order to enhance patient affordability. ments. The company builds capacities outside CR Report. the pharmaceutical value chain, with many initia- ▶ Best practice: working to ensure products tives in sub-Saharan Africa. Involved in humanitarian aid programmes. can be used appropriately. Novartis adapts its Novartis provided antibiotics for humanitar- brochures and packaging materials to address Strong in strengthening pharmacovigilance sys- ian aid programmes. Most of its emergency-re- all five of the local needs looked for by the tems. Novartis voluntarily shares safety data lief donations are granted by its generic division, Index (language, literacy, cultural, demographic with authorities and updates safety labels in Sandoz. and environmental considerations). It does so countries in scope. The company has a number to facilitate the product’s rational use at vari- of diverse activities to build local pharmacovigi- ous levels of the health system. This includes lance capacity, in Egypt, Mexico and Thailand. an anti-microbial resistance campaign for physicians, pharmacists and patients in Brazil, Mexico, ▶ Best practice: approach to R&D capacity Ecuador and Colombia. building. Novartis has a large number of local partnerships that specifically address local needs, including a long-term engagement with PATENTS & LICENSING the University of Cape Town in South Africa RANK 10 SCORE 1.4 focused on drug discovery for malaria and TB.

Mid-ranking performance, held back by low ▶ Best practice: SMS for Life. Novartis’s SMS transparency. Novartis ranks in the middle of for Life public-private partnership uses mobile the pack. It has a clear policy of patent-non-en- phones and other technology to improve the forcement in LDCs, and has stated that it is pre- stock management of medicines in sub-Saha- pared to license products for manufacture for ran Africa. Having piloted the programme in over supply to those countries. However, it falls back 10,000 health facilities, the company is now due to low transparency: it has not published the working with several governments to scale up status of its patents, nor has it clearly stated its the latest tablet-based platform. position on trade policy. ▶ Innovation: building capacity to treat lep- No transparency regarding patent status. rosy and malaria. Novartis takes an innovative, Novartis has not published the status of its research-based capacity building strategy in patents. two disease-specific areas. In partnership with local stakeholders, the company is testing new Public commitment not to enforce patents. programmes to improve leprosy diagnosis and Novartis has publicly committed not to enforce treatment, mainly in south-east Asia, and malaria its patent rights in LDCs. treatment in sub-Saharan Africa.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 91 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Merck KGaA 6 (2014)

Stock Exchange: XFRA • Ticker: MRK • HQ: Darmstadt, Germany • Employees: 49,613

Ranking by technical area Ranking by strategic pillar Management 3.6

Compliance 2.2

R&D 3.4

Pricing 2.3

Patents 2.5

Capacity 2.8 average leader 8 9 2 8 . . . Donations 3.5 . 0 3 3 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Merck KGaA once again rises two places, having improved in adapts its brochures and packaging to suit local needs in mul- most areas. It has access-related targets that align with the tiple ways. However, it still applies equitable pricing to only Sustainable Development Goals, and clearly holds third par- a small portion of its products. It has one of the most trans- ties to the same ethical standards as its own employees. It parent approaches to IP management, but has been fined engages in R&D partnerships and shares IP and clinical trial for anti-competitive behaviour. It is now a leader in capacity data for research purposes. It has filed to register a high pro- building, with a range of initiatives, including a long-term proportion of its newest products in high-burden countries and it ject for identifying falsified medicines.

CHANGE SINCE 2014

• Newly aligns access targets with the • Clearly indicates where it is prepared to waive • Has launched a three-year malaria research Sustainable Development Goals. patent rights, and where and what products it collaboration with the University of Namibia, is prepared to license. in support of national malaria control pro- • Does not publish progress made against grammes in Namibia, Botswana and Zambia. access-to-medicine targets. • Publishes information about the patents its holds in countries in scope. • Has improved its accountability for its sales agents’ pricing practices. • Has signed the Declaration by the Pharmaceutical, Biotechnology and • Has equitable pricing strategies for the same Diagnostics Industries on Combating number of products as in 2014. Antimicrobial Resistance.

OPPORTUNITIES

Target local capacity building needs in Africa. Align access commitments and R&D early. (EML), in all low- and middle-income countries Merck KGaA intends to strategically expand its Merck KGaA can build on its new “Access to that need them. It can align with demand and presence in Africa between 2015 and 2020. The Health in Developing Countries” charters, which with the availability of alternative products in company can ensure its capacity building activ- focus on intellectual property rights and pric- specific countries. ities (including in manufacturing and areas out- ing, to ensure it makes access plans for its prod- side the pharmaceutical value chain) continu- uct candidates before they gain marketing ally respond to local needs, and draw on ongoing approval. The company can put access provi- input from local stakeholders. The company can sions in place for its in-house (non-collaborative) also evaluate impact and publish its findings. R&D projects.

Expand equitable pricing strategy to more Ensure access to mental health products on products. Merck KGaA can apply its equitable the WHO EML. Merck KGaA is the only company pricing strategy to more products, including all targeting all mental health conditions in scope. of its first line medicines for diabetes. It can take It can assess access barriers for these condi- account of more socio-economic factors in its tions and ensure the availability and affordability inter-country equitable pricing strategies. of its mental health products, especially those listed on the WHO Model Essential Medicine List

92 Access to Medicine Index 2016

Sales in countries in scope Net sales by business sector (2015)

2,555.6 MN

EUR 12,844.7 MN 6,933.8 MN

3,355.3 MN

Healthcare Life Science Performance Materials In scope, has sales Net sales by region In scope, has no sales Not in scope 1 2,000 11 ,000

MN EUR 1 0,000 SALES AND OPERATIONS 9,000 8,000 7,000 Merck KGaA reorganised its business in October nership with Pfizer to jointly develop and com- 6,000 2014 and now operates through three busi- mercialize immuno-oncology products. About 5,000 4,000 ness sectors: Healthcare (comprising the one third of Merck KGaA’s sales are generated in 3,000 Biopharma, Consumer Health, Allergopharma, emerging markets and the company has oper- 2,000 1 ,000 and Biosimilars businesses), Life Science and ation in 77 countries within the scope of the 0 Performance Materials. The Healthcare business Index. 2011* 2012* 2013* 2014 2015 focuses on: oncology, immunology, neurology, Middle East/Africa Latin America Asia-Pacic Europe North America endocrinology and cardiovascular diseases. In

November 2014, the company announced a part- *Due to a change in company reporting practices, numbers from 2011, 2012, 2013 and 2014 are incomparable. PORTFOLIO AND PIPELINE Products per disease category 5 10 Merck KGaA has a mid-sized portfolio of 58 Its R&D focuses on malaria and schistosomia- products for diseases relevant to the Index. It sis, as well as diabetes. Merck KGaA is develop- 2 has a mid-sized pipeline of 20 R&D projects ing diagnostics for HIV/AIDS and malaria that that address the needs of people in countries in target needs in countries in scope. It is also 58 scope. working with Instituto de Biologia Experimental e Tecnológic to develop a screening platform for 41 To date, the company’s focus for low- and mid- the discovery of new anti-malarials. Over half of dle-income countries has been on medicines and the company’s projects target high-priority prod- Communicable Non-communicable diagnostics. Merck KGaA’s relevant portfolio has uct gaps with low commercial incentive. Since Neglected tropical Multiple categories a strong focus on non-communicable diseases 2014, Merck KGaA’s collaborative project to (NCDs), covering: all mental health conditions in develop a paediatric formulation of praziquan- Merck KGaA’s medicines portfolio has a strong scope; hypertensive and ischaemic heart disease; tel moved from pre-clinical to phase II of clinical focus on NCDs. Its four diagnostics address and diabetes. development. HIV/AIDS, malaria, and TB.

Pipeline projects First-line treatments and essential medicines

20% 5% 75% 24 7 14 12 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Merck KGaA collaborates with Astellas in the Pediatric Praziquantel Merck KGaA has 45 medicines listed on the WHO EML and/or as first- Consortium, which plans to promote access to a new formulation of prazi- line treatments: e.g., bisoprolol/amlodipine, metformin (Glucophage®) and quantel, for example, via procurement by established organisations. praziquantel.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD NCD 2 2

Multiple 4 Multiple 0 5 10 15 20 25 30 35 40 45 50 55 0 5 10 15 20 25 30 35 40 45 50 55 Discovery Pre-clinical Phase I Phase II Phase III Received Market Approval Discovery Pre-clinical Phase I Phase II Phase III Received Market Approval

Merck KGaA’s innovative pipeline includes four new investigational medi- Merck KGaA is adapting several products, including: a fixed-dose com- cines, all in early stages of development, for malaria and Neglected Tropical bination; pre-diabetes expansion; and smaller tablet of metformin Diseases (NTDs). (Glucophage®) to target countries in scope.

93 Access to Medicine Index 2016

Merck KGaA

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE MARKET INFLUENCE & COMPLIANCE global health priorities. Merck KGaA has prom- MANAGEMENT RANK 11 SCORE 2.2 ised to continue allocating 20% of its revenue RANK 10 SCORE 3.6 to R&D. Improvements in ethical marketing result in Overtaken by peers, drops four places. Merck rise of three places. Merck KGaA moves from Commitment to R&D partnerships, but no KGaA falls from 6th to 10th position in this area. 14th to 11th position in this area. This is due to policy. Merck KGaA commits to sharing intellec- It has maintained its performance in absolute improved practices regarding ethical marketing tual property with institutions carrying out R&D terms, but has been overtaken by peers who and to having a thorough auditing system, which for diseases in scope. However, the company has improved their performance. also applies to third parties. no clear policy for ensuring these features or other access-oriented terms are systematically Access unit embedded in all company busi- Specific guidance on marketing conduct. In included in its R&D partnerships. nesses. Merck KGaA has an Access to Health addition to its code of conduct, Merck KGaA has (A2H) unit embedded within all core functions 34 global policies that provide detailed guidance Comprehensive policy to ensure clinical trials and operating across all businesses. Its access to its employees on topics related to marketing, are conducted ethically. Merck KGaA has pol- strategy is supported by its “Four As of Access such as sponsorship of events, engagement with icies and takes measures to ensure its clini- to Medicine” approach. This aims to leverage healthcare professionals, etc. However, Merck cal trials are conducted ethically. Its policies the company’s core competencies and expertise KGaA does not provide information about its are strong: they include measures on scientific across the health value chain. For Merck KGaA, marketing activities or the payments it makes to requirements, research protocols and post-trial the four As refer to the availability, affordability, patient and physician organisations (or similar) provisions. accessibility and awareness of medicine. in countries within scope. High transparency around clinical trials. The Some transparency on access-related out- Achieving a degree of transparency in lobby- company upholds high standards of clinical trial comes. Merck KGaA is not transparent with ing activities. Merck KGaA states publicly that it data transparency. Access to patient-level data is regards to all access-related information. The does not make financial contributions to hold- provided to scientific researchers upon request company publishes on its website its commit- ers of or candidates for political office, political via the company’s own portal. Requests are pro- ments and objectives, but does not disclose parties or related organisations. It discloses its cessed by an internal committee and denied complete information and updates on overall memberships of industry associations, but does applications are sent for review by a panel performance. not provide information about the financial con- including independent members. tributions it makes to those associations. It has a Mid-ranking performance on stakeholder conflict of interest policy. ▶ Innovation: signing on to combat anti- engagement. The company takes a strategic microbial resistance. Merck KGaA signed approach to stakeholder engagement and is Multiple breaches of codes of conduct. Merck the Declaration by the Pharmaceutical, generally transparent with the related informa- KGaA has been found in breach of codes of con- Biotechnology and Diagnostics Industries on tion. Nevertheless, it does not provide informa- duct four times during the period of analysis. All Combating Antimicrobial Resistance in January tion on how its subsidiaries manage their local cases related to unethical marketing practices in 2016, thereby committing to investing in R&D stakeholder engagement activities. Among other countries out of the Index scope. that aims to meet public health needs. activities, Merck KGaA hosts the Merck Access Dialogue Series, a platform for sharing inno- Audit system applies to third parties. Merck Shares intellectual property with several part- vation and best practices around barriers to KGaA conducts audits as part of its general ners. Merck KGaA shares intellectual prop- access. review process. It checks the company’s facilities erty for malaria, TB and NTD research with sev- to ensure they comply. The audit programme eral partners, including the Drug for Neglected ▶ Innovation: scale up of pilot initiative. The also covers anti-corruption. It contractually Diseases Initiative, Medicines for Malaria Su-Swastha programme, identified by the Index requires third parties and their subcontrac- Venture, University of Yaoundé and University of as innovative in 2014, has been scaled up in the tors to follow compliance obligations, including Cape Town. past two years. The project aims to increase anti-bribery, labour standards and environmen- access to quality healthcare products at an tal regulations. affordable price in rural India, and to address the PRICING, MANUFACTURING & lack of healthcare infrastructure in rural areas. DISTRIBUTION RESEARCH & DEVELOPMENT RANK 6 SCORE 2.3 ▶ Best practice: benchmarking access tar- RANK 2 SCORE 3.4 gets. Merck KGaA is realigning all of its tar- Rises three places due to consistent perfor- gets for its access initiatives to the Sustainable R&D commitments linked to public health mance. Merck KGaA rises three places from 9th. Development Goals. rationale. Merck KGaA commits to innovat- It is one of the leaders in providing data on price ing internally and through external engagement points and volumes of sales (to demonstrate and collaboration. For infectious diseases, the implementation of pricing strategies) and per- company commits to addressing unmet needs forms well in filing to register products where in developing countries, according to defined they are needed.

94 Access to Medicine Index 2016

Limited consideration of socio-economic fac- Evidence of anti-competitive behaviour. Merck biologic manufacturing with network members tors. Merck KGaA has equitable pricing strate- KGaA has been fined by CADE, the Brazilian (including vaccine manufacturers in Bangladesh, gies for the same products as in 2014. The strat- competition regulator, for engaging in anti- Egypt and Vietnam). egies mainly cover hypertensive heart disease, competitive behaviour (preventing distributors ischaemic heart disease and diabetes. 11% of its from working with generic manufacturers). At ▶ Best practice: building capacity to help marketed products for high-burden diseases the time of analysis there was no record of an detect suspected falsified medicines. Through have pricing strategies that target priority coun- appeal being made. the Global Health Pharma Fund, Merck KGaA’s tries, reaching 12% of the corresponding prior- Minilabs initiative has provided over 700 low- ity countries (disease-specific sub-sets of coun- Discloses patent statuses. Merck KGaA dis- cost, portable laboratories (including donated tries with a particular need for access to relevant closes information about the statuses of the laboratories), and related training to healthcare products). The company considers the availabil- patents (including patent type and INN) it holds professionals in more than 90 countries around ity of public financing systems in its intra-coun- in countries in scope (for diseases in scope). the world to help control falsified medicines. try equitable pricing strategies, and only considers affordability for its inter-country equitable ▶ Best practice: Clarity in approach to pricing strategies. Intellectual Property. Merck KGaA indicates PRODUCT DONATIONS where it holds patents, where it will not file for RANK 6 SCORE 3.5 Mixed registration performance. Merck KGaA or enforce patents, it’s preparedness to license, has registration targets for products for a sub- in which disease area, and an indication of the Drops two positions. Merck KGaA has dropped set of relevant diseases in a sub-set of low-in- terms. This clear approach gives confidence to from 4th to 6th position. It has one of the larg- come countries. It does not publish its crite- third parties. est structured donation programmes: the Merck ria for deciding where to register products, or Praziquantel Donation Programme. It has not the actual registration status of its products. started new programmes or made ad hoc dona- However, it has filed to register more than half CAPACITY BUILDING tions during the period of analysis. (80%) of its newest products in at least a few RANK 6 SCORE 2.8 priority countries (disease-specific sub-sets of Continues efforts to control schistosomia- countries with a particular need for access to Strong performance in meeting local capacity sis. Since 2007, Merck KGaA has supported relevant products). Many of these products were building needs. Merck KGaA has improved since the WHO in its efforts to control schistosomia- first registered in 2008 or 2009. 2014. It is active in all areas measured by the sis in Africa. In 2012, the company renewed its Index and demonstrates key strengths in build- commitment, pledging to increase the number Consistent recall guidelines. Merck KGaA has ing R&D and manufacturing capacity. The com- of annually donated tablets of praziquantel globally consistent guidelines for issuing drug pany has several best practices, and targets local (Cesol®) to 250 million tablets. recalls in all countries relevant to the Index needs through many of its activities. where its products are available. Merck KGaA Complies with WHO donations guidelines. does not publish its drug recalls. Strong in building R&D capacity. Merck KGaA Merck KGaA has policies and regulations in place has a relatively large number of partnerships that list the requirements and the process gov- Language, environmental and demographic with local research organisations to build R&D erning its donations. It complies with WHO needs considered in brochures and packag- capacity in sub-Saharan Africa. Some partner- guidelines. ing. Merck KGaA adapts brochures and leaflets ships specifically address local needs, e.g., its to local languages so that local populations can malaria research programme with the University Monitoring is mainly the responsibility of part- understand important information. To address of Namibia to support governmental malaria ners. For its structured donation programme, hot and humid conditions, Merck KGaA uses blis- control programmes in southern Africa. the Merck Praziquantel Donation program, ter packs and is developing anti-tamper packag- Merck KGaA is not involved in distribution, mon- ing, for example, to reduce the risk of children Active in building capacity outside the value itoring or reporting activities. WHO is respon- accidentally opening its products. chain. Merck KGaA’s philanthropic approach sible for these activities, and performs impact aims for sustainable and measurable results, but assessments. does not clearly target local needs. In practice, PATENTS & LICENSING the company aims to fill local skills gaps out- Does not engage in emergency relief or human- RANK 5 SCORE 2.5 side the pharmaceutical value chain, through itarian aid. Merck KGaA did not provide any rele- partnerships with the Indonesian and Philippine vant emergency relief or humanitarian aid dona- Continuing strong performance. In 2014 Merck governments. tions during the period of analysis. It donated KGaA set a new bar for the transparency and seven Minilabs in African countries in 2015. clarity of its approach to IP management. This ▶ Best practice: approach to building capac- continues to earn Merck KGaA a place among ity in manufacturing. Merck KGaA applies a the higher ranking performers. single quality standard to all its manufacturers (in-house and third-party), facilitated through Broad policy of not filing for or enforcing pat- an extensive global information-sharing system. ents. Merck KGaA has published lists of coun- The company provides an additional layer of tries where it promises not to file for or enforce support, expertise and regular training to local patents. This comprises 90% of countries within third-party plant managers through its Virtual the Index scope. Plant Team.

Open to requests for non-exclusive licences. ▶ Best practice: supporting developing country While Merck KGaA does not yet engage in vaccine manufacturers. Merck KGaA has a part- non-exclusive voluntary licensing, it publicly nership with the Developing Countries Vaccine notes that it would welcome requests from qual- Manufacturers Network to support the net- ity manufacturers, focused on non-communica- work’s continuing education activities. The com- ble diseases. pany shares expertise on safety and quality in

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 95 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Merck & Co., Inc. is known as MSD Merck & Co., Inc. outside the United States and Canada. 7 (2014)

Stock Exchange: XNYS • Ticker: MRK • HQ: Kenilworth, NJ, US • Employees: 68,000

Ranking by technical area Ranking by strategic pillar Management 4.1

Compliance 2.3

R&D 2.2

Pricing 2.2

Patents 2.5

Capacity 2.9 average leader 5 . 0 2 8 9 . . Donations 3.8 . 3 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Merck & Co., Inc. rises into the top 5. It has a strong approach relevant pipeline than the industry average, only a small pro- to access management and is among the most transpar- portion of which targets high-priority product gaps. Its equi- ent regarding marketing. It expands its engagement in licens- table pricing strategies take limited account of socio-eco- ing, including on access-oriented terms. In Capacity Building, nomic factors, and it performs relatively poorly in terms of its its strengths are in supply chain management and in areas accountability for its sales agents’ pricing practices. Merck & beyond the pharmaceutical value chain, with many activities Co., Inc. is in the top three in product donations, continuing its targeting local needs. However, it drops in R&D, with a smaller efforts to eliminate lymphatic filariasis and onchocerciasis.

CHANGE SINCE 2014

• Has a leading strategy for stakeholder engage- Diagnostics Industries on Combating • Continues to build local capacity in multiple ment, with defined processes for collecting Antimicrobial Resistance. ways, with a notable improvement in R&D. views through local offices. • Still has relatively poor accountability for its • Reaches a comparatively wide target popula- • Has increased the transparency of its market- sales agents’ pricing practices. tion with its ivermectin (Mectizan®) donation ing activities. programme. • Has not expanded its use of equitable pricing • Found twice since 2014 to have breached laws strategies. or codes relating to unethical behaviour. • Has agreed licences for paediatric formula- • Has signed the Declaration by the tions of raltegravir (Isentress®), through the Pharmaceutical, Biotechnology and Medicines Patent Pool.

OPPORTUNITIES

Mitigate mark-ups in low- and middle-in- Expand strong approach to building R&D capac- Expand equitable pricing to more products. come countries. Merck & Co., Inc. can improve ity. Merck & Co., Inc. can expand its relatively Merck & Co., Inc. can apply equitable pricing to its accountability for its sales agents’ pricing small-scale yet strong approach to addressing more products in low- and middle-income coun- practices. local R&D skills gaps through partnerships. It can tries, e.g., by implementing equitable pricing for undertake more partnerships in more locations the etonogestrel/ethinyl estradiol vaginal ring Further expand approach to voluntary licens- where capacity building needs are identified. (NuvaRing®). ing. Merck & Co., Inc. can expand its use of voluntary licensing as a mechanism for boosting Consider accessibility of products for non-com- the affordability and supply of key medicines in municable diseases during clinical stages of countries in scope. This could include expand- development. Merck & Co., Inc. can put plans in ing licensing to adult formulations of raltegra- place (access provisions) to ensure new prod- vir (Isentress®). It can also assess the need for ucts for non-communicable diseases will be elbasvir/grazoprevir (Zepatier®) in countries accessible. It can set these plans while the prod- with high prevalence of hepatitis C virus (HCV) ucts are in late-stages of development. The genotype 1 or 4, with a view towards licensing. company can consider such access provisions both for collaborative as well as in-house R&D projects.

96 Access to Medicine Index 2016

Sales in countries in scope Sales by segment (2015) 1 ,389 MN 3 MN 3,324 MN

USD 39,498 MN

34,782 MN

Pharmaceutical Other revenues Animal Health Consumer Care In scope, has sales Sales by geographic area In scope, has no sales Not in scope 40,000

MN USD 35,000 SALES AND OPERATIONS 30,000 25,000

Merck & Co., Inc. has three business segments: increased its focus on emerging markets and 20,000

Pharmaceuticals, Vaccines and Animal Health. has sales in 81 countries within the scope of the 1 5,000

The company’s core areas of focus are endocri- Index. 1 0,000 nology, oncology, infectious diseases and vac- 5,000 cines. In January 2015, the company acquired 0 Cubist Pharmaceuticals, a company specialised 2011* 2012* 2013 2014 2015 in R&D for antibiotics for USD 9.5 bn. In October Rest of world Latin America Asia-Paci c Japan Europe/Middle East/Africa USA 2014, Merck & Co., Inc. sold its Consumer

Care business to Bayer for USD 14.2 bn. It has *Due to a change in company reporting practices, the numbers from 2011 and 2012 are incomparable with following reporting years. PORTFOLIO AND PIPELINE Products per disease category 3

Merck & Co., Inc. has a mid-sized portfolio of vaccine (Vaxelis), and a combination of elbas- 7 50 products for diseases in scope, and a small vir and grazoprevir (Zepatier®) for chronic hep- 17 pipeline of six R&D projects that address the atitis C. 3 needs of people in countries in scope. Its portfo- 50 lio includes six preventive vaccines and two vec- Merck & Co., Inc. is developing medicines for dia- tor-control product. In non-communicable dis- betes, diarrhoeal diseases and HIV/AIDS, as well eases, Merck & Co., Inc. focuses on diabetes and as a beta-lactamase inhibitor that combines rel- 20 hypertensive and ischaemic heart disease. In ebactam with imipenem/cilastatin to treat com- Communicable Non-communicable communicable diseases, it has a strong focus on plicated Gram-negative bacterial infections, and Neglected tropical Multiple categories liver diseases, including HIV/AIDS and viral hep- a next-generation vaginal contraceptive ring, Maternal and neonatal atitis. It has gained marketing authorisation for MK-8342B. A small portion of its pipeline targets Merck & Co., Inc.’s portfolio targets all disease cat- several medicines since 2014, including a contra- high-priority product gaps with low commercial egories and includes six contraceptives. ceptive ring, a paediatric hexavalent combination incentive.

Pipeline projects First-line treatments and essential medicines

1 7% 1 7% 66% 13 8 9 18 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Merck & Co., Inc. is working with Samsung Bioepsis to develop insulin Over half of its medicine and vaccine portfolio is listed on the WHO EML glargine (Lantus®) for diabetes. The agreement includes sufficient supply and/or are first-line treatments: e.g., peginterferon alfa-2b (PegIntron®), commitments. ribavirin (Rebetrol®), efavirenz (Stocrin®) and boceprevir (Victrelis®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 CD

NTD NTD

MNH MNH

NCD NCD

There are several medicines in late-stage clinical development, including Merck & Co., Inc. has two combinations in development: its next-generation bezlotoxumab for Clostridium difficile infection (currently under review by vaginal contraceptive ring and a beta-lactamase inhibitor combined with imi- the FDA and EMA), and doravirine for the treatment of HIV-1 infections. penem/cilastatin for bacterial infections.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 97 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

Merck & Co., Inc.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE former when it comes to the transparency of company commits to evaluating and responding MANAGEMENT its marketing activities. It was, however, found to the R&D needs of emerging markets. RANK 4 SCORE 4.1 during the period of analysis to have breached Comprehensive policy to ensure clinical trials laws and codes relating to unethical behaviour. are conducted ethically. Merck & Co., Inc. has Rises one position. Merck & Co., Inc. moves from policies and takes measures to ensure its clini- 5th to 4th place in this area. Once again, its over- Mixed performance on transparency of lob- cal trials are conducted ethically. Its policies are all performance is good, with strengths across all bying activities. Merck & Co., Inc. discloses its strong: they include measures governing the use areas of measurements, except innovation. policy positions related to access, in particu- of placebo controls, scientific requirements and lar, those related to the registration and com- research protocols. Access strategy aligned with corporate strat- mercialisation of its medicines. It does not make egy. Merck & Co., Inc.’s access strategy covers political contributions in countries in scope. It High transparency around clinical trials. The five priority areas: (1) R&D, (2) manufacturing discloses its memberships of patient and other company upholds high standards of clinical trial and supply, (3) registration, (4) commercialisa- organisations, but provides no details regarding data transparency. Researchers can request tion and (5) community investment. Its access financial support. The company does not pro- access to patient-level data via the company’s strategy is aligned with the company’s busi- vide any information about its conflict of inter- own portal. When the validity of a request is ness strategy: the ability to compete in all mar- est policy. uncertain, it is reviewed by an External Scientific kets is seen as key for the company’s long-term Review Board. sustainability. Subject of two settlements relating to unethical behaviour (not in countries of scope). Merck ▶ Innovation: signing on to combat antimi- Integrated, company-wide performance man- & Co., Inc. was found during the period of analy- crobial resistance. Merck & Co., Inc. signed agement system. Merck & Co., Inc. has an inte- sis to have breached one civil law and one code the Declaration by the Pharmaceutical, grated performance management system that of conduct, both in the USA. These settlements Biotechnology and Diagnostics Industries on measures progress toward its annual goals. The are related to unethical marketing activities and Combating Antimicrobial Resistance in January system tracks each employees’ progress toward one case of corruption. 2016, thereby committing to investing in R&D their individual performance objectives. Merck that aims to meet public health needs. & Co., Inc.’s access strategy includes clear pri- Enforcement processes and disciplinary meas- orities, which have been translated into specific ures in place. The company has enforcement Clear policy on R&D collaborations. Merck & objectives, measures and targets. processes and disciplinary measures in place. It Co., Inc. has a policy to ensure pro-access terms does not disclose whether disciplinary actions are included in a sub-set of its research con- Leader in stakeholder engagement. Merck & have been taken for non-compliance with corpo- tracts, focusing on product R&D for neglected Co., Inc. has a clear strategy for stakeholder rate policies. tropical diseases in Least Developed Countries. engagement that includes defined processes for collecting input from local stakeholders through ▶ Best Practice: transparency of marketing its local offices. The company is also trans- activities. Merck & Co., Inc. is the only company PRICING, MANUFACTURING & parent with the public about its stakeholder to voluntarily publish the financial support it pro- DISTRIBUTION engagement. vides to patients’ organisations, medical socie- RANK 9 SCORE 2.2 ties and scientific organisations in some coun- Engages with local stakeholders via a volun- tries within scope. The information disclosed Drops three places as its peers overtake. Merck teering programme. One of the company’s sev- on its website includes the organisations, the & Co., Inc. falls from 6th, as it takes limited eral stakeholder engagement initiatives, Merck & amounts, the dates of payment and the projects account of socio-economic factors when setting Co., Inc.’s Fellowship for Global Health is a three- for which the money was used. prices, and targets high-burden countries with month, field-based volunteering programme equitable pricing to only a limited extent. It per- designed to make use of the skills and talents forms relatively poorly when it comes to pro- of Merck & Co., Inc.’s employees. Employees RESEARCH & DEVELOPMENT viding pricing guidelines to sales agents. It does are assigned to non-profit organisations to help RANK 11 SCORE 2.2 take some account of local needs to facilitate improve health service delivery. In turn, employ- rational use. ees gain insights from the field that can be used Decreased performance in R&D, with a smaller to improve the company’s ability to deliver inno- pipeline. Merck & Co., Inc. drops three places in Mixed equitable pricing. Compared with in 2014, vative health solutions. R&D. Compared to peers, it has a small pipeline, Merck & Co., Inc. has not increased the number a low proportion of which targets high-priority of its products with equitable pricing strate- product gaps. Its change in rank is partly due to gies. Some of its products for high-burden dis- MARKET INFLUENCE & COMPLIANCE improved performances from peers. eases have pricing strategies that target some RANK 7 SCORE 2.3 priority countries (diseases-specific sub-sets R&D commitments linked to public health of countries with a particular need for access Rises 9 places, with a top performance in mar- rationale. Merck & Co., Inc. has committed to to the product in question). Its pricing strate- keting transparency. Merck & Co., Inc. rises from engaging in R&D for diseases that dispropor- gies cover a wide range of diseases, including 16th to 7th position. The company is a top per- tionately affect the poor. Where appropriate, the HIV/AIDS, hepatitis C and contraceptives, among

98 Access to Medicine Index 2016 others. Many of its products with inter-coun- Limited support for the Doha Declaration. PRODUCT DONATIONS try equitable pricing strategies take socio-eco- Merck & Co., Inc. publicly acknowledges and RANK 2 SCORE 3.8 nomic factors into account, which may include endorses the Doha Declaration on the TRIPS disease burden or prevalence, unmet need, level agreement and public health, including the use Remains in 2nd place. Merck & Co., Inc. holds of economic development or the state of the of compulsory licensing, though only in “extraor- second place. It has three ongoing structured local healthcare system. Its intra-country equi- dinary and limited” circumstances. donation programmes. Through its large-scale table pricing strategies consider factors such ivermectin (Mectizan®) programme for oncho- as affordability per group and the availability of cerciasis and lymphatic filariasis (LF) it donated public financing. CAPACITY BUILDING 1.3 billion tablets during the period of analysis. RANK 5 SCORE 2.9 Tracks products during recalls. Merck & Co., Inc. Continues efforts to eliminate LF and control tracks the process of its recalls, including match- Strong capacity building performance over- onchocerciasis. Since 1987, Merck & Co., Inc. ing the quantities of delivered, recovered and all, focusing on local needs. Merck & Co., Inc. has been supporting WHO in the fight against destroyed product. is active in all areas of capacity building meas- onchocerciasis and LF. Its Merck Mectizan ured by the Index, demonstrating good perfor- Donation Programme contributes to the WHO Relatively poor performance in accountability mance in strengthening supply chains (includ- target of eliminating LF and controlling oncho- for sales agents’ pricing practices. Merck & Co., ing an innovative initiative) and capacity build- cerciasis in most countries, by 2020 and 2025, Inc.’s pricing guideline information is confidential. ing outside the pharmaceutical value chain. The respectively. To achieve these goals, Merck & The company performs relatively poorly. company targets local needs through many of Co., Inc. has committed to donating Mectizan® its activities. to all who need it for as long as necessary. Leader in registration, from commitment to action. Merck & Co., Inc. commits to register- Leader in building capacity outside the value Helps prevent NTDs, going beyond the London ing products for a sub-set of diseases in some chain. Merck & Co., Inc. has a very strong Declaration. With the Merck Afya Program, low-income countries, though it does not pro- approach to philanthropy: it targets local needs, Merck & Co., Inc. contributes to the goal of erad- vide a timeframe. It publishes its criteria for aims for sustainable health system improve- icating rabies globally. Rabies is not included in deciding where to register its products, and ments and includes monitoring and evaluation. The London Declaration on Neglected Tropical some data on where its products are regis- The company builds capacities outside the phar- Diseases. tered. It has filed to register more than half of its maceutical value chain, including in maternal and newest products (70%) in some priority coun- child health. Complies with external standards. Merck & Co., tries (disease-specific sub-sets of countries Inc. has published its approach to donations. Its with a particular need for access to relevant Targets local R&D capacity building needs. policy on charitable product donations complies products). Several of these products were first Merck & Co., Inc. has a number of short-term with WHO and PQMD guidelines. launched approximately 10 years ago. partnerships with local research organisations to build R&D capacity, focusing on sub-Saha- Undertakes regular audits. For ad hoc dona- Adapts brochures and packaging materials to ran Africa (Tanzania and Cameroon). Notably, all tions, Merck & Co., Inc. conducts on-site assess- a limited extent. Merck & Co., Inc. provides evi- partnerships specifically address local needs. ments to ensure donated products are being dence that it adapts brochures and packag- handled appropriately at the first step of the ing materials to address language and literacy Less active in building manufacturing capac- donation supply chain. With its structured dona- needs, but not cultural, demographic or environ- ity. Merck & Co., Inc. makes a general commit- tion programmes, Merck & Co., Inc. requires mental needs. ment to building manufacturing capacity in shipping receipts, while monitoring and auditing countries in scope. It undertakes a number of are mainly the responsibility of its partners. The capacity building activities, including in-house company requires annual reports from partner PATENTS & LICENSING (in Indonesia and China) and with third parties, organisations. RANK 4 SCORE 2.5 in Brazil. Involved in numerous emergency relief efforts. Rises from the lowest five to the top five. ▶ Best practice: Informed Push Model. Merck & Merck & Co., Inc. made a wide range of ad hoc Merck & Co., Inc. rises to 4th place, from 18th. Co., Inc. continues to work with partners to sup- donations, including of medicines for non-com- Its improved performance is connected to port the Informed Push Model, adapting communicable diseases, and reaching more than 50 its expanded engagement in licensing with mercial distribution principles to improve last- countries. Its ad hoc donations are distributed the Medicines Patent Pool, and associated mile contraceptive distribution and stock man- through its partners AmeriCares, Direct Relief, improvements in licensing transparency and agement in Senegal. The company is partnering MAP International and Project HOPE. access-orientation. with the Senegalese government to support the programme, which involves dedicated logistics Non-filing policy in low-income countries. professionals bringing products from regional Merck & Co., Inc. has a public policy of not filing supply pharmacies to health centres, and collect- for patents in all Low Income Countries. To the ing stock data to continuously inform the next Index, it has also shared that this policy extends delivery cycle. to the Least Developed Countries. ▶ Innovation: strengthening supply chains in No disclosure of patent status. Merck & Co., Inc. Nepal. In Nepal, Merck & Co., Inc. has an inno- does not publish the status of its patents. vative partnership with locally-based NGO Possible focused on supply chain strengthen- Expanded engagement in licensing. Through ing. It is developing and implementing a digital the Medicines Patent Pool, Merck & Co., Inc. has pharmaceutical supply chain management model agreed licences for its paediatric formulations that aims to integrate with Nepal’s Electronic of raltegravir (Isentress®). These licences are Medical Record system to ensure replicability transparent, and include access-friendly terms. and sustainability.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 99 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Sanofi 8 (2014)

Stock Exchange: XPAR • Ticker: SAN • HQ: Paris, France • Employees: 115,631

Ranking by technical area Ranking by strategic pillar Management 3.9

Compliance 2.5

R&D 3.2

Pricing 2.4

Patents 0.8

Capacity 2.4 average leader 8 7 9 7 . . . Donations 3.2 . 0 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Sanofi rises two positions, following improvements in sev- ing, with more products with equitable pricing strategies. It eral areas. It takes a clear approach to access management, has recently agreed not to file for or enforce patent rights in which includes exploring the link between climate change Least Developed Countries and low-income countries, and and health. It performs well in compliance, certifying its sales is actively working (via donations) toward the elimination of agents and auditing its operations according to risk. It has Human African Trypanosomiasis (HAT). In Capacity Building, expanded its relevant pipeline and is comparatively open with Sanofi has been outperformed by peers, despite maintaining regards to its clinical trial data. It improves in equitable pric- its performance overall.

CHANGE SINCE 2014

• Innovates in the area of health and climate • Has expanded equitable pricing to significantly • Has recently revised its donation policy to take change, investigating and addressing health- more products. account of additional stages of the donation and access-related issues linked to climate process (last-mile delivery, safety and quality, change. • Has newly committed to not filing for or etc.) enforcing patents in Least Developed • Is developing more relevant products, includ- Countries or low-income countries. ing several new fixed-dose combinations for treating TB and a paediatric formulation of • Has launched a programme with the South primaquine for malaria. African National Department of Health to improve the early detection and management • Has moved a greater proportion of its R&D of patients with concomitant diabetes and TB. projects from one stage of development to another than in the previous reporting period.

OPPORTUNITIES

Expand strong capacity building approach. by climate change: malaria, dengue, cholera, Continue to target known needs through inno- Sanofi can further improve its strong perfor- leishmaniasis and animal health. vative and adaptive R&D. Sanofi can continue to mance in capacity building in low- and middle-in- target defined, high-priority product R&D needs come countries: to target local needs more stra- Consider equitable pricing and licensing more for low- and middle-income countries, including tegically, including in its ongoing programmes. broadly. Sanofi can consider using non-exclu- a range of product types and, in particular, lever- It can also share more information with relevant sive voluntary licensing to improve access to its aging its strengths in product adaptations. stakeholders (e.g., regulatory authorities and dis- products, including those still in development. tributors) to strengthen supply chains further. Likewise, it can extend equitable pricing to more Prioritise access to products on the WHO disease areas (e.g., diarrhoeal diseases, lower EML. Sanofi has the most products on the WHO Continue to develop work on climate change respiratory infections, ischaemic heart disease, Model Essential Medicines List (EML). It can and health. Sanofi is encouraged to continue stroke and hypertensive heart disease). Sanofi assess access barriers to these products in all investigating the link between climate change is currently piloting equitable pricing in some of low- and middle-income countries that need and health. It can incorporate health needs these areas: it can commit to always consider- them. It can ensure their availability and afforda- linked to climate change in its R&D priorities, ing equitable pricing for products in these dis- bility, aligning with demand and the availability of and develop an appropriate implementation ease areas. alternative products in specific countries. strategy. It has already identified disease areas targeted by its products likely to be influenced

100 Access to Medicine Index 2016

Sales in countries in scope Net sales by segment (2015) 4,743 MN

EUR 34,542 MN

29,799 MN

Pharmaceuticals Vaccines

In scope, has sales Net sales by geographic region In scope, has no sales Not in scope

30,000 MN EUR 25,000 SALES AND OPERATIONS Ingelheim’s consumer healthcare business. 20,000 Sanofi consists of five business units: Vaccines Sanofi has sales in 96 countries in scope. 1 5,000 (Sanofi Pasteur); Diabetes and Cardiovascular; Approximately one third of its sales are gener- General Medicines and Emerging Markets; ated in emerging markets. 1 0,000 Specialty Care; and Animal Health. The Specialty 5,000 Care unit is focused on: rare diseases, mul- 0 tiple sclerosis, oncology and immunology. 2011 2012 2013 2014 2015 In June 2016, Sanofi announced an assets Rest of world Europe North America swap with Boehringer Ingelheim, concerning Sanofi’s Animal Health division and Boehringer

PORTFOLIO AND PIPELINE Products per disease category

19 Sanofi has the largest portfolio of relevant prod- Its pipeline focuses on medicines and vaccines ucts in the Index, with 157 products. It has a large for communicable diseases (nine diseases). It is 53 pipeline of 28 R&D projects that address the developing products for several NTDs and dia- needs of people in countries in scope. betes. Sanofi has a new project with the Bill and 157 Melinda Gates Foundation to explore the use of

Sanofi’s portfolio includes medicines and preven- Micropellet technology to develop thermostable, 75 9 tive vaccines, medical devices for diabetes, and cost-effective, novel combination vaccines. Over 1 vector control products for communicable and half of Sanofi’s R&D projects target high-pri- Communicable Non-communicable neglected tropical diseases (NTDs). Its portfo- ority product gaps with low commercial incen- Neglected tropical Multiple categories lio has a strong focus on diabetes and cardiovas- tive. Several of its products have been approved Maternal and neonatal cular diseases. since 2014: e.g., Dengvaxia® gained regulatory Sanofi has the most medicines in its portfolio in approval in several countries in scope in 2015 the Index. It is most active in infectious diseases, (including in Brazil, Mexico and the Philippines). ischaemic heart disease and diabetes.

Pipeline projects First-line treatments and essential medicines

29% 1 8% 53% 64 10 31 39 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Over half of Sanofi’s R&D partnerships include provisions to ensure access. A comparatively high proportion of Sanofi’s relevant products are listed on Fexinidazole, in phase III trials for HAT, will be part of its donation pro- the WHO EML and/or as first-line treatments: e.g., Shan5®, Menactra®, gramme with WHO. meglumine antimoniate (Glucantime®), and melarsoprol (Arsobal®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 2 CD 4 2 5

NTD 2 NTD

MNH MNH

NCD NCD 2

Sanofi has several innovative vaccines in clinical development, including a tri- Sanofi’s pipeline focuses on product adaptations, including four projects to valent pneumococcal protein vaccine, an HIV/AIDS vaccine, an adjuvanted develop fixed-dose combinations for TB, and 2nd-generation vaccines for subunit TB vaccine and a Clostridium difficile vaccine. rabies and meningitis (to extend its use in infants up to 6 months old).

101 Access to Medicine Index 2016

Sanofi

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE MARKET INFLUENCE & COMPLIANCE RESEARCH & DEVELOPMENT MANAGEMENT RANK 5 SCORE 2.5 RANK 4 SCORE 3.2 RANK 7 SCORE 3.9 Biggest riser in the area, with advances in Rises five places into the top five. Sanofi rises Retains top ten position, staying firm in 7th transparency and compliance. Sanofi is the big- five places in this area. It has a larger relevant place. Sanofi retains its position, with a clear gest riser in this area, climbing 13 places into the pipeline than in 2014, and its policies for clinical approach to access management and an inves- top five. This is due to its above-average trans- trial conduct have improved, as has its openness tigation into the link between climate change parency and comprehensive compliance system. with clinical trial data. and health. Certification system for managing ethical mar- R&D commitments linked to public health Integrated approach to access spanning all keting practices. Sanofi’s marketing code is con- rationale. Sanofi commits to R&D targeting dis- stages of healthcare. Sanofi’s access approach sistent with industry standards. It has developed eases in scope and has a clear R&D presence in aims to optimise patient outcomes, covering a certification system for regularly testing and relevant countries. The company’s R&D priorities prevention, detection, early diagnosis, treatment, updating the skills of its sales agents. The com- focus on unmet health needs, informed by the care and disease management. This approach pany discloses general information about its company’s teams in relevant countries. is designed to focus on innovation, affordability, marketing activities in some countries in scope, quality care and patient support and is fully inte- but provides no information about payments No policy for ensuring R&D partnerships pro- grated into the company business strategy. made to healthcare professionals. mote access. Sanofi does not commit to ensuring access-oriented terms (e.g., registration tar- Transparent regarding access-related objec- Transparency of lobbying practices is limited. gets, affordable pricing strategies) are systemat- tives and performance. The company publishes Sanofi discloses its policy positions on several ically included in its research partnerships. its access-related commitments, objectives and access-related topics, including counterfeit med- quantitative and qualitative targets, as well as icines and the Sustainable Development Goals. It High transparency in clinical trials. Sanofi its performance in access activities. It publishes states that political contributions are prohibited, upholds high standards of transparency regard- a dashboard tracking its progress against key unless expressly approved by the CEO, without ing its clinical trial data: including providing sci- access objectives. specifying whether or not they have occurred. entific researchers with access to patient-level The company provides a list of associations of data upon request, via clinicalstudydatarequest. Clear stakeholder engagement approach. which it is a member and discloses financial con- com. Sanofi’s approach focuses on providing relia- tributions made. Its conflict of interest policy is ble information, building formalised dialogue not publicly available. ▶ Innovation: signing on to combat antimicro- and consultation processes, and on forging part- bial resistance. Sanofi signed the Declaration nerships for patient support and humanitarian Annual audits of high-risk third parties. The by the Pharmaceutical, Biotechnology aid programmes. Sanofi is transparent about its company conducts annual audits in its prior- and Diagnostics Industries on Combating stakeholder engagement activities, but does not ity markets and rotational audits in other coun- Antimicrobial Resistance in January 2016, publish its stakeholder selection process. tries sensitive to risk. External experts may be thereby committing to investing in R&D that used on specific tasks. For high-risk third parties, aims to meet public health needs. Dedicated access award for employees. To Sanofi conducts an annual targeted evaluation of incentivise its staff, Sanofi organises biennial their CSR performance. Shares intellectual property with several part- CSR Awards to recognise high-impact access- ners. Sanofi shares intellectual property with to-healthcare programmes. Several criteria are Evidence of misconduct in marketing. Sanofi several partners in order to accelerate research used to identify the best programmes, such as: was found to have been the subject of settle- in TB, malaria and NTDs. Its partners include the level of innovation; added value for the stake- ments related to three breaches of codes of Drugs for Neglected Diseases initiative, WIPO holder; added value for Sanofi; sustainability and conduct during the period of analysis, for cases Re:Search, PreDiCT-TB, the Global Alliance for replicability. related to unethical marketing practices. TB Drug Development and Cornell University.

▶ Innovation: exploration of link between ▶ Innovation: invoice management system to health and climate change. Sanofi’s starting track expenses. EASYDAY/EASYFOOD is a col- PRICING, MANUFACTURING & point is that climate change will have an impact laborative web-based project being piloted in DISTRIBUTION on health, especially in the most vulnerable China that aims to anticipate the risk of unethi- RANK 4 SCORE 2.4 countries with weak infrastructure and weak cal behaviour in relation to events and dining resilience. The company has established an advi- expenses. The project includes a payment Rises four places due to improved equitable sory board, composed of international experts, and invoice management system to track the pricing. Sanofi moves from 8th into the top five, that regularly meets to discuss the topic and expenses of invitees attending promotional due to its improved performance in equitable inform company strategy. events. pricing, and disclosure of volume-of-sales and price-point information.

102 Access to Medicine Index 2016

Equitable pricing for significantly more prod- ents in Least Developed Countries and low-in- No evidence of engagement in R&D capac- ucts. Sanofi has implemented equitable pricing come countries. ity building. Sanofi did not disclose any rele- for significantly more products than in 2014. Its vant partnerships with local universities or other equitable pricing strategies cover a wide range No transparency on patent status. Sanofi does public research organisations in countries in of diseases, including diabetes, malaria, schiz- not publish the status of its patents. scope to build R&D capacity. ophrenia and dengue, among others. Some (22%) of its products have pricing strategies Does not engage in licensing. Sanofi does not ▶ Best practice: training to strengthen supply that target priority countries (disease-specific engage in non-exclusive voluntary licensing, and chains. Sanofi developed and piloted a supply sub-sets of countries with a particular need for has not stated whether it would consider doing chain management training programme for access to relevant products). Together, these so in the future. national medicine purchasing centres, scaled strategies reach just some (25%) corresponding up in partnership with the African Association priority countries. The company only considers Absence of competition-related breaches. of Essential Drugs National Purchasing Centres affordability in its inter-country equitable pric- Sanofi was not found to have been the sub- (ACAME). The programme has been rolled out ing strategies, overlooking other socio-economic ject of breaches, fines or judgements relating to in several countries, including Ghana and Sierra factors. However, it does consider the needs competition law during the period of analysis. Leone. of rural populations in its intra-country equitable pricing. Limited transparency regarding its view of Doha Declaration. Sanofi makes no clear public PRODUCT DONATIONS Comprehensive product tracking for recalls. reference to the Doha Declaration on the TRIPS RANK 7 SCORE 3.2 Sanofi has traceability systems in place for its agreement and public health, but acknowl- products at each step of the supply chain, which edges that, in a public health crisis or emer- Rises three positions. Sanofi moves from 10th allows products to be tracked. In the case of a gency, IP rights should not be a barrier to access to 7th position. Sanofi is involved in one WHO recall, its quality management department uses to medicine. donation programme for NTDs: targeting Human this system to follow up on the quantities of African Trypanosomiasis (HAT). products that should be returned. CAPACITY BUILDING Continues to eliminate Human African Monitors prices but does not set pricing guide- RANK 8 SCORE 2.4 Trypanosomiasis. Sanofi has been support- lines. Sanofi does not set pricing guidelines for ing WHO in its efforts to eliminate HAT. During its sales agents: its affiliates are responsible for Previously in the leading group, now outper- this Index period, Sanofi donated a combined defining the sales practices of regional agents formed in capacity building. Sanofi fell six total of 92,000 units of melarsoprol (Arsobal®), and distributors, and for monitoring them on a places, from 2nd. It is strong in building capac- pentamidine (Pentacarinat®), and eflornithine monthly basis. Sanofi monitors the prices set by ities outside the pharmaceutical value chain, (Ornidyl®). its own agents. where it focuses on local needs, and supply chain management. Nevertheless, the company has Complies with WHO guidelines for dona- Mixed performance in registration. Sanofi com- been outperformed by peers in 2016. tions. Sanofi disclosed its guidelines for dona- mits to registering products for a sub-set of rel- tions, which are based on WHO Guidelines for evant diseases in some low-income countries Leader in building capacity outside the value Medicine Donations. but provides no time-frame. In practice, it has chain. Sanofi’s approach to philanthropy, through filed to register all (100%) of its newest products the Sanofi Espoir Foundation, is strong: it works Monitoring is mainly the responsibility of part- in at least some priority countries (disease-spe- toward long-term change based on local needs, ners. Sanofi works with international organisa- cific sub-sets of countries with a particular need and includes impact measurement. The com- tions to make ad hoc donations. These organisa- for access to relevant products). These prod- pany builds capacities outside the pharmaceuti- tions conduct regular audits and send the results ucts were first launched between 1999 to 2016. cal value chain, focusing on NCDs (e.g., its Alerte to Sanofi. The organisations are responsible for Sanofi has already registered products launched Santé partnership in Cameroon). monitoring, reporting and auditing. Sanofi does in 2014 and 2016 in some priority countries. not directly conduct audits on its donation pro- Strong in building manufacturing capacity. grams. For structured donation programmes Adapts brochures and packaging to limited Sanofi commits to assessing and building capac- Sanofi monitors and tracks the reception of extent. Sanofi adapts brochures and packaging ity in countries in scope for in-house manufac- donated products. materials to address language and environmen- turers. In practice, the company undertakes a rel- tal needs, but does not consider cultural, literacy atively large number of capacity building activ- Involved in numerous emergency relief efforts. or demographic needs. ities, including with third parties, in a range of Sanofi donated over 3 million boxes of med- countries in scope (e.g., Brazil, China and India). icines and doses of vaccines in 11 countries during the period of analysis. The main desti- PATENTS & LICENSING Focus on Africa when strengthening pharma- nations of humanitarian aid included Nepal and RANK 16 SCORE 0.8 covigilance systems. Sanofi has a relatively high India. In addition, Sanofi has provided humanitar- number of activities for building local pharma- ian aid to refugees in multiple countries. Low ranking, but with a clearer stance. Sanofi covigilance capacity, focusing on Africa. For holds a low position in Patents & Licensing, with example, the company supports health workers no indication that it considers engaging in licens- from sub-Saharan African countries with weak ing, and low overall transparency. However, it pharmacovigilance systems to undertake fellow- has now disclosed a clearer stance on where it ships at WHO Collaborating Centres for pharma- promises not to file for or enforce its patents. covigilance in Morocco and Ghana.

Clarity over patents: will not file for or enforce patents in LDCs and LICs. Sanofi has not published its patenting strategy. It has disclosed to the Index that it will not file for nor enforce pat-

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 103 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . AstraZeneca plc 15 (2014)

Stock Exchange: XLON • Ticker: AZN • HQ: London, UK • Employees: 61,500

Ranking by technical area Ranking by strategic pillar Management 4.0

Compliance 2.2

R&D 2.6

Pricing 2.2

Patents 2.5

Capacity 3.0 average leader 6 3 8 4 . Donations . . 1 .8 . 1 3 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

AstraZeneca is one of the biggest risers in 2016, climbing enforce patents or issue licences, and disclosing patent sta- eight positions into the top 10. It improves in multiple areas, tuses. It has several best and innovative practices: in pricing, including pricing, where it has a new affordability-based patents and capacity building. In R&D, its relevant pipeline has pricing strategy. It has extensively expanded and updated grown, but with comparatively little movement and less col- its access strategy, which it operationalises, e.g., through laborative R&D based on pro-access terms. It has breached its Healthy Heart Africa programme. It takes a transparent civil laws and codes of conduct multiple times. It does not approach to IP management, disclosing how and where it will have a structured donation programme.

CHANGE SINCE 2014

• Launched its Healthy Heart Africa programme, • Provides volume-of-sales data for the first • Publicly commits to not file for patents in a which aims to reach 10 million hypertensive time. range of low-income countries, lower-middle patients across Africa by 2025. income countries and upper-middle income • Still has no targets for registering new prod- countries. • Has more products with equitable pricing ucts in low- and middle-income countries. strategies than in 2014. • Improves in building manufacturing capacity, • Is developing more products: including medi- where it undertakes a relatively large number • Improves its accountability for its sales agents’ cines for lower respiratory infections, asthma, of capacity building activities (mainly in India pricing practices, by providing pricing guide- chronic obstructive pulmonary disease and and China). lines for all local sales agents. diabetes.

• Publishes the status of patents it holds in countries in scope.

OPPORTUNITIES

Monitor impact of Healthy Heart Africa pro- company to license a product targeting an NCD. management of asthma and chronic obstruc- gramme and expand to other regions. A first step would be to explicitly include NCD tive pulmonary disease (COPD). These belong AstraZeneca can evaluate the impact of its products in its commitment to licensing. to a therapeutic class listed on the WHO Model hypertension-focused Healthy Heart Africa pro- Essential Medicines List (EML). The company gramme in Kenya and consider expanding it Further expand partnerships with academia for can also extend its policy to more priority coun- to other non-communicable diseases (NCDs) R&D capacity building. AstraZeneca can build tries (disease-specific sub-sets of countries with and countries/regions. It can use the lessons on its growing focus on academic partnerships in a particular need for access to relevant prod- learned from this programme to update its over- the UK to include public research organisations ucts): e.g., its equitable pricing strategy for all access strategy. in low- and middle-income countries. Such part- budesonide (Pulmicort®) can be expanded to nerships can be important for addressing local India, Bangladesh, Nigeria, and China. Broaden IP access strategy to include NCDs. research capacity gaps. AstraZeneca can expand the reach of pro- Plan for access during R&D. AstraZeneca can grammes such as Healthy Heart Africa by licens- Expand new equitable pricing strategy to consider appropriate access provisions for all ing products for NCDs. For Healthy Heart Africa, more products and countries. AstraZeneca of its relevant products while they are still in this could include ticagrelor (Brilinta®), a first- can apply its new affordability-based pricing the pipeline. This is important for key late-stage line option for preventing atherothrombotic policy to more key products: such as its selec- products, whether developed in-house or via events. This could make AstraZeneca the first tive beta-2-adrenoreceptor agonists, used in the research partnerships.

104 Access to Medicine Index 2016

Sales in countries in scope Product sales by segment (2015)

USD 23,641 MN

Biopharmaceuticals

In scope, has sales Product sales by geographic market In scope, has no sales Not in scope 30,000 MN USD 25,000 SALES AND OPERATIONS 20,000

AstraZeneca has one business segment, biop- 1 5,000 harmaceuticals, with activities in five main areas: 1 0,000 respiratory disease; inflammation and autoim- munity; infection and neuroscience; oncology; 5,000 cardiovascular and metabolic diseases. At the 0 end of 2015, the company bought Takeda’s res- 2011 2012 2013 2014 2015 piratory business for USD 575 mn. AstraZeneca Asia/Africa/Australasia Europe Americas has sales in 67 countries in scope.

PORTFOLIO AND PIPELINE Products per disease category 1 5 AstraZeneca has a mid-sized portfolio of rele- (Qtern®) for type 2 diabetes, the MEDI-550 vac- vant products, with 41 medicines and one pre- cine for preventing pandemic influenza, and cef- ventive vaccine, and a mid-sized pipeline of 16 tazidime/avibactam (Zavicefta®) for compli- R&D projects that address the needs of people cated Gram-negative bacterial infections. 42 in countries in scope. The focus of its clinical pipeline reflects its

The majority of medicines in AstraZeneca’s port- on-market portfolio: targeting lower respiratory 36 folio target NCDs, with 18 medicines for hyper- infections, asthma, COPD and diabetes. It also Communicable tensive and ischaemic heart disease. It also has has discovery-stage projects targeting Chagas Non-communicable several medicines for diabetes, asthma and disease, leishmaniasis, dengue, lymphatic filaria- Multiple categories COPD. It has gained marketing authorization sis and onchocerciasis, which target high-priority AstraZeneca’s portfolio is heavily focused on from the European Medicines Agency for several product gaps with low commercial incentive. NCDs, which account for 86% of its total portfolio. products since 2014: saxagliptin/dapagliflozin

Pipeline projects First-line treatments and essential medicines

6% 25% 69% 9 5 12 16 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

AstraZeneca conducts R&D for neglected tropical diseases with partners 26 of AstraZeneca’s 42 products are on the WHO EML and/or are first- including the Liverpool School of Tropical Medicine and University College line treatments. Three for asthma and COPD are on the EML: budesonide London. The company is also part of the new NTD Drug Discovery Booster. (Pulmicort®), terbutaline (Bricanyl®), formeterol (Oxis Turbuhaler®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 3 CD

NTD 3 NTD

MNH MNH

NCD 7 NCD

AstraZeneca focuses on developing innovative medicines. It is developing AstraZeneca has received EU-approval for ceftazidime-avibactam medicines targeting lower respiratory infections caused by Staphylococcus (Zavicefta®), a new combination antibiotic for Gram-negative bacterial aureus and respiratory syncytial virus, among others. infections. Phase III trial sites were conducted in high-burden countries.

105 Access to Medicine Index 2016

AstraZeneca plc

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Not transparent about marketing practices in Commits to R&D that meets concrete public MANAGEMENT countries in scope. AstraZeneca’s ethical mar- health needs. AstraZeneca works with external RANK 5 SCORE 4.0 keting code also applies to third parties, and the stakeholders to ensure the medicines it is devel- incentives it offers to sales staff are not linked to oping will fulfil unmet needs. The company has Improvements across all areas make sales targets. Nevertheless, the company’s dis- also made specific commitments to conduct- AstraZeneca the biggest riser. AstraZeneca closure around its marketing programmes and ing R&D in China and Africa, in order to respond is the biggest riser in this area, climbing from related payments only meets minimum legal to the unique needs of people living in those 14th into the top five. It has improved in all areas requirements. regions. and has an innovative approach to stakeholder engagement integrated into its Healthy Heart Publishes policy positions but lacks transpar- Commitment to R&D partnerships, but no Africa programme. ency on lobbying. AstraZeneca has published its policy. AstraZeneca makes a clear commitment policy positions relating to compulsory licens- to making its intellectual property, compounds Access strategy aligned with corporate strating, intellectual property, product counterfeit- and expertise available for free in a sub-set of egy. AstraZeneca’s access strategy focuses on ing and pricing in emerging markets. It is also countries in scope. This includes for projects tar- product deployment, affordability and on remov- transparent regarding its memberships of indus- geting NTDs, TB and malaria. However, the com- ing healthcare barriers in low and middle-income try associations and about the board seats it pany has no clear policy for ensuring these fea- countries. This strategy is aligned with the com- holds. However, it does not disclose financial tures or other access-oriented terms are sys- pany’s core business strategy: access to health- contributions. tematically included in its R&D collaborations. care is one of the five pillars of the company’s sustainability framework, which is in turn inte- Enforcement processes in place, but little Takes measures to ensure clinical trials are grated within the corporate strategy. insight into disciplinary measures taken. The conducted ethically. AstraZeneca has policies company has clearly-defined enforcement pro- in place and takes measures to ensure all its Healthy Heart Africa (HHA) programme newly cesses and disciplinary measures in place. in-house and outsourced clinical trials are con- launched. Initially launched in Kenya, Healthy Although it states that it has taken disciplinary ducted ethically. Heart Africa aims to reach 10 million hyperten- action following violations of its codes of con- sive patients across Africa by 2025: by estab- duct governing lobbying, corruption and market- ▶ Innovation: signing on to combat antimicro- lishing new partnerships; ensuring access to ing, it provides no further details. bial resistance. In January 2016, AstraZeneca affordable anti-hypertensive medicines and ser- signed the Declaration by the Pharmaceutical, vices; and by developing local ownership. Solid risk-based audit system. AstraZeneca Biotechnology and Diagnostics Industries on has an auditing system that uses a mixture Combating Antimicrobial Resistance, thereby Mature access management structures in place. of internal and external measures, such as committing to investing in R&D that aims to AstraZeneca is transparent about its targets and the Transparency International Corruption meet public health needs. about the progress it is making toward them. Perception Index. The scope of each audit is The company also has a dedicated incentive based on a market-specific risk assessment. In Sharing IP via the NTD Drug Discovery Booster. structure for encouraging senior management some cases, AstraZeneca audits its third parties. AstraZeneca shares intellectual property to sup- to achieve access-related targets. port the development of treatments for leish- Found in breach of civil laws and codes of con- maniasis and Chagas disease via the NTD Drug ▶ Innovation: approach to incorporating stake- duct three times. AstraZeneca was found to Discovery Booster. In this project, funded by holder insights. As part of its HHA programme, have breached civil laws and codes of conduct the Global Health Innovative Technology Fund AstraZeneca has established a Global Advisory three times during the period of analysis. Among (GHIT) and established in 2015, six companies Board and Steering Committee that include others, it agreed to pay USD 46.5 mn in US, plus provide plates of compounds on a monthly basis both local and global stakeholders. These bodies interest, to resolve allegations that it underpaid to help the Drugs for Neglected Diseases initia- fulfil an advisory role, identifying and discussing rebates owed under the Medicaid Drug Rebate tive develop new leads. insights gathered, with the aim of improving the Program. programme. PRICING, MANUFACTURING & RESEARCH & DEVELOPMENT DISTRIBUTION MARKET INFLUENCE & COMPLIANCE RANK 10 SCORE 2.6 RANK 8 SCORE 2.2 RANK 10 SCORE 2.2 Falls three places. AstraZeneca is generally less Biggest riser in Pricing, Manufacturing & Drops three places due to breaches of corrup- active than in 2014: its relevant pipeline has Distribution. AstraZeneca rose 11 places from tion laws. AstraZeneca drops from 7th to 10th grown, but with comparatively little movement 19th in 2014 to 8th in 2016. This is mainly due to position. This is due to comparatively stronger and less collaborative R&D based on pro-access its innovative approach to equitable pricing and performances from peers. AstraZeneca was terms. Its rank also reflects changes in perfor- the implementation of this approach to products found in breach of civil laws and codes of con- mance among its peers. and countries in the scope of the Index. duct three times in the period of analysis.

106 Access to Medicine Index 2016

Significant increase in products with equita- transparency, licensing commitment and trade improvements, while monitoring and evaluat- ble pricing. Compared to 2014, AstraZeneca has policy. ing pre-defined objectives. The company’s focus significantly increased the number of its prod- areas include public health initiatives, increasing ucts with equitable pricing strategies, taking New public commitment not to file patents. disease awareness, health-related research, and affordability into account for products focused AstraZeneca publicly commits not to file for pat- addressing unmet health needs in under-served on hypertensive heart disease, ischaemic heart ents in a range of low-income countries, low- populations. disease and diabetes. However, only a third er-middle income countries and upper-middle (31%) of its products have pricing strategies that income countries that together cover 70% of ▶ Best practice: manufacturing capacity build- target some priority countries (disease-specific countries within the scope of the Index. ing partnership in China. Rather than training sub-sets of countries with a particular need for individual manufacturers, AstraZeneca provides access to relevant products). New commitment to licensing, with clear funding, training and other support to Tianjin exceptions. Although AstraZeneca has not yet University to fill local manufacturing skills gaps. Registration behaviour lags behind advances in licensed a product, it has now set out the situa- Via the university, the company’s expertise can pricing. AstraZeneca does not provide evidence tions where it would consider doing so. Its policy be shared more widely, to help improve manu- of disease-specific registration targets. It does excludes licences for products for non-commu- facturing safety standards at the industry level not publish where its products are registered or nicable diseases in lower-middle income coun- in China. the criteria it uses to decide when and where to tries, includes products on the WHO EML, and register its products. The company has filed to permits supply to Least Developed Countries, ▶ Innovation: building capacity through Healthy register some (40%) of its newest products in low-income countries and lower-middle income Heart Africa. In 2014, AstraZeneca launched just a few (6%) priority countries (disease-spe- countries. its Healthy Heart Africa programme, targeting cific sub-sets of countries with a particular need hypertension in Kenya. The programme’s broad for access to relevant products). While some Flexible acknowledgement of Doha. scope of capacity building activities is innovative, of these products were first launched more AstraZeneca publicly acknowledges and including working with the Ministry of Health to recently (between 2012 and 2014), most were endorses the Doha Declaration on the TRIPS develop national treatment guidelines, mobile- launched between 2000 and 2010. agreement and public health. It acknowledges based training for health-workers, and targeted that countries have the right to determine what supply chain management support. Limited brochure & packaging adaptation to constitutes a public health emergency. facilitate products’ rational use. For its Healthy ▶ Innovation: scale-up of Young Health Heart Africa programme, in East African mar- Patent status disclosure. AstraZeneca pub- Programme. AstraZeneca has scaled up its kets, AstraZeneca has developed new artwork lishes the status of all patents it holds for high- Young Health Programme. The programme for felodipine (Plendil®), lisinopril (Zestril®) and need products in the high-burden countries focuses on preventing non-communicable dis- lisinopril/hydrochlorothiazide (Zestoretic®), measured by the Index, including publishing the ease among adolescents. Since 2014, it has been packs, to distinguish the HHA products from patent type. scaled up in India and expanded to Kenya. commercial products, which are also for sale in Kenya. ▶ Best practice: Clarity in approach to IP management. AstraZeneca clearly states the coun- PRODUCT DONATIONS ▶ Best practice: intra-country equitable pricing tries where it holds patents, where it will not file RANK 15 SCORE 1.8 for ticagrelor. AstraZeneca’s intra-country equi- for patents, where it is prepared to license, and table pricing strategy for ticagrelor (Brilinta®) for which products, and gives an indication of Drops four places. AstraZeneca has dropped takes account of multiple socio-economic fac- the terms. four positions, from 11th to 15th. The company tors (such as disease burden, public financing, is not active in any structured donation pro- inequality, supply chain mark-ups and patient grammes, but is active in ad hoc donations. awareness) to target specific population seg- CAPACITY BUILDING ments of three priority countries: India, China RANK 4 SCORE 3.0 Complies with external guidelines. All and Brazil. This strategy is particularly important AstraZeneca donations are covered within the as ticagrelor is a first-line therapy in the preven- Active in all areas of capacity building, targets AstraZeneca Global Guidance Procedure and tion of atherothrombotic events, is on patent, local needs. AstraZeneca has improved its per- Guidance Community Investment. The com- and AstraZeneca is the only manufacturer. formance in capacity building. It is active in all pany’s guideline aligns with WHO and PQMD areas but demonstrates key strengths in building guidelines. ▶ Innovation: analysis of populations’ abilities manufacturing capacity and capacities beyond to pay. AstraZeneca has conducted an in-depth the pharmaceutical value chain. It takes an inno- Engages in monitoring and auditing. analysis of the abilities of different population vative approach, and targets local needs through AstraZeneca regularly audits its NGO partners, segments in a sub-set of countries to pay for many activities. such as Americares, to ensure that they are com- its products. This has shaped its new pricing pliant with its regulations to ensure products are policy and will continue to do so in the future. Focus on Kenya for strengthening supply chains donated appropriately and as represented. The AstraZeneca has also created an Affordability and pharmacovigilance systems. AstraZeneca company also requires quarterly reports from Centre of Excellence and trains international focuses on Kenya, through its Healthy Heart partner organisations. staff on its new affordability approach. Africa programme, to build local supply chain management and pharmacovigilance capac- Involved in humanitarian aid programmes. ity. The company targets the capacity-build- AstraZeneca provided ad hoc donations for PATENTS & LICENSING ing needs of its NGO implementing partners humanitarian aid via its partner Americares, and RANK 6 SCORE 2.5 through training and information sharing. in response to natural crises such as typhoons in the Philippines. Rises furthest due to clear new policies. Strong approach to philanthropy that meets AstraZeneca is the largest riser, climbing ten local needs. AstraZeneca’s approach to phil- places, due to a suite of new commitments and anthropic activities is very strong: it targets a clear public position on patent filing, patent local health needs, and is aimed at long-term

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 107 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Gilead Sciences Inc. 5 (2014)

Stock Exchange: XNAS • Ticker: GILD • HQ: Foster City, CA, US • Employees: approx. 8,000

Ranking by technical area Ranking by strategic pillar

Management 3.4

Compliance 3.8 Leader

R&D 1 .6

Pricing 2.3

Patents 3.4 Leader

Capacity 0.9 average leader 3 6 2 2.3 8 . Donations . . . 1 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Gilead drops to 8th place, despite being a leader in key areas, line is smaller than the industry average, and it lags in ensur- including in Patents & Licensing. It has pioneered the use of ing ethical clinical trial conduct and on clinical data transpar- non-exclusive voluntary licensing beyond HIV/AIDS, and its ency. It falls in pricing, despite leading in certain metrics. It solid compliance processes protect it from breaching laws does not, for example, clearly make sales agents accounta- and regulations on unethical behaviour. Its new donation pro- ble or facilitate products’ rational use. Gilead has few capacity gramme aims to eliminate hepatitis C virus (HCV) in Georgia. building activities, focusing on manufacturing, and limited tar- Yet, in R&D, its performance remains low: its relevant pipe- geting of local gaps.

CHANGE SINCE 2014

• Maintains a low level of transparency regard- • Has more products with equitable pricing • Has launched a new donation programme ing its stakeholder engagement activities. strategies than in 2014. aimed at the elimination of hepatitis C in Georgia. • Maintains high standards of ethical behav- • No longer provides volume-of-sales iour: once again, it has not been found to information. have breached laws or regulations relating to unethical behaviour. • Confirms its leadership in Patents & Licensing, having voluntarily agreed non-ex- • Maintains comparatively poor approaches for clusive licences for all on-patent products for ensuring clinical trials are conducted ethically high-burden communicable diseases. and for sharing clinical trial data.

OPPORTUNITIES

Expand into access strategies for non-com- Share results and lessons learned from dona- Expand training approach. Gilead can draw from municable diseases. Gilead can apply its access tion programme. Gilead’s donation programme its experience in compliance training to build approach for HIV/AIDS and hepatitis C prod- for hepatitis C is the first to aim to eliminate capacities of third parties in more areas, taking ucts to its portfolio for non-communicable dis- this virus. As such, insight into its progress and local needs and capacity gaps into account. eases (NCDs) (e.g., ranolazine (Ranexa®), a sec- impact is particularly important to share. Gilead ond-line treatment for stable angina). This could can rigorously monitor and evaluate the drug Improve clinical trial transparency. Gilead lags help address the increasing burden of these con- donation programme it has initiated in Georgia, behind the industry in this area. It can ensure ditions in low- and middle-income countries. and then publish its results and lessons learned. its policy for clinical trial data transparency sets out a timeline for publishing results and a proto- Expand licensing approach to more middle Ensure affordability of products world- col for publishing all results, regardless of out- income countries. Gilead can consider ways of wide. Gilead can expand its consideration of come. The company can also introduce a mech- including more high-prevalence middle income socio-economic factors in its inter-country equi- anism for sharing anonymised patient-level data countries in the terms of its hepatitis C licens- table pricing strategies, to help ensure products with third parties. ing arrangements, through, for example, tiered are globally affordable for different populations. licensing policies. The company can mitigate the risk of mark-ups on HIV/AIDS products by providing pricing guidelines to sales agents.

108 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015)

USD 32,639 MN

Biopharmaceuticals

In scope, has sales Revenues by geographic region In scope, has no sales Not in scope 30,000

MN USD 25,000 SALES AND OPERATIONS 20,000

Gilead is a biopharmaceutical company that Gilead markets products in 93 countries within 1 5,000 operates through one segment: Human the scope of the Index. The company’s sales have 1 0,000 Therapeutics. It focuses on HIV/AIDS, liver dis- grown steadily since 2014. eases, haematology and oncology, inflamma- 5,000 tory and respiratory diseases and cardiovascu- 0 lar conditions. In 2015, the company announced 2011 2012 2013 2014 2015 the acquisition of EpiTherapeutics, a leader in Rest of world Europe USA epigenetics.

PORTFOLIO AND PIPELINE Products per disease category 1 Gilead’s has a relatively small portfolio, with 17 everal of Gilead’s products have gained mar- 2 medicines for diseases in scope. It has a rela- keting authorisation from the FDA since 2014, tively small pipeline, with 13 R&D projects, that including: elvitegravir/cobicistat/emtricitabine/ addresses the needs of people in countries in tenofovir alafenamide (Genvoya®) for HIV-1 17 scope. in 2015, and sofosbuvir/ledipasvir (Harvoni®) for chronic hepatitis C genotype 1, 4, 5 or 6 Its portfolio and pipeline are heavily focused on infection. 1 4

HIV/AIDS and viral hepatitis, which are the tar- Communicable Multiple categories gets of 14 of Gilead’s medicines. A relatively Non-communicable large proportion of Gilead’s pipeline targets high-priority product gaps with low commercial Gilead’s portfolio is heavily focused on HIV/AIDS incentive, for example fixed-dose combinations and viral hepatitis. Out of the 17 products in its (FDCs) for hepatitis C genotypes 4, 5 and 6. relevant portfolio, 14 target these diseases.

Pipeline projects First-line treatments and essential medicines

8% 8% 84% 6 9 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

With Johnson & Johnson, Gilead is developing two fixed-dose combinations Approximately half its products are on the WHO EML and/or are first-line: for HIV/AIDS. Whether they can be produced under Gilead’s licensing agree- e.g., sofosbuvir (Sovaldi®), tenofovir disoproxil fumarate (Viread®), and efa- ments will depend on the patent status of the regimens’ other compounds. virenz/emtricitabine/tenofovir disproxil fumarate (Atripla®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 3 CD 5 4

NTD NTD

MNH MNH

NCD NCD

Gilead has several innovative medicines in clinical development, targeting Gilead’s pipeline includes fixed-dose combinations for HIV/AIDS and hepa- hepatitis B virus (HBV), HIV/AIDS and chronic obstructive pulmonary disease titis C. In January 2016, it applied to the FDA for the approval of tenofovir (COPD). Presatovir, targeting respiratory syncytial virus, is in phase II trials. alafenamide as a once-daily treatment for chronic HBV.

109 Access to Medicine Index 2016

Gilead Sciences Inc.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE related to the responsible use of intellectual Lags behind in clinical trial data transparency. MANAGEMENT property, and trade issues. The company also Gilead has no policy on publishing clinical trial RANK 12 SCORE 3.4 states that it makes no political contributions results within a given timeframe, nor of publish- in countries in scope. In the company’s Code of ing trial results regardless of outcome. It is the Drops out of top 10, as peers overtake. Gilead Ethics, Gilead discloses the details of its policy only company in the industry that does not have falls three places, despite having a range of for managing conflicts of interest. a systematic mechanism for providing scientific access initiatives and a solid performance man- researchers with access to anonymised patient- agement system. It does not publish information No breaches of laws or codes of conduct gov- level data on request. related to its stakeholder engagement activities. erning ethical behaviour. As in 2014, Gilead has not been the subject of any settlements for Does not share intellectual property. The com- Multiple access approaches. Gilead uses a series criminal, civil or regulatory infractions relating to pany did not provide evidence of sharing intel- of approaches to improve access to medicine, unethical marketing or corruption anywhere in lectual property with research institutions or such as pricing, generic licensing, health systems the world during the period of analysis. neglected-disease drug-discovery initiatives. strengthening, registration and partnerships with NGOs and in R&D. Business Conduct team dedicated to managing ethical behaviour and access. Gilead’s PRICING, MANUFACTURING & Above average measuring and reporting on access-to-medicine group has its own dedicated DISTRIBUTION access outcomes. Gilead is transparent about its Business Conduct team that covers interactions RANK 7 SCORE 2.3 access-related commitments, targets and per- in Latin America, Africa, Asia and the Pacific. All formance measurements. It has a centralised employees must undergo training in this respect Gilead drops six places, but remains among the performance management system with quar- and understand all the various elements of the leaders. Gilead falls from to 7th. Although it per- terly reviews. The company has a broad strat- company’s business conduct manual. forms well in key areas, it does not perform con- egy to incentivise employees to work toward sistently across all dimensions, including equi- access-related goals, all financial in nature. ▶ Innovation: compliance guidance and train- table pricing, setting pricing guidelines for sales ing for third parties. Gilead adopted a Regional agents or in facilitating products’ rational use. Low transparency on stakeholder engagement Business Partner Compliance Pocket Guide, It is less transparent than in 2014 about its vol- strategy and activities. Gilead has a clear stake- which addresses a range of interactions with umes of sales, which means there is little evi- holder engagement strategy, but does not pro- physicians and government officials. Gilead dence for the implementation of its pricing vide information regarding the stakeholder offers compliance training, featuring case-based strategies. Its inter-country equitable pricing engagement activities of its branch organisa- scenarios, to business partners across multi- strategies only consider a few socio-economic tions. Furthermore, the company does not pub- ple regions. In addition, Gilead has developed an factors. lish information about its global stakeholder auditing programme for its partners. engagement activities. Commits to registering products within a set timeframe. Gilead is the only company that RESEARCH & DEVELOPMENT commits to registering products for most of the MARKET INFLUENCE & COMPLIANCE RANK 16 SCORE 1.6 diseases in scope (where it is active) in most RANK 1 SCORE 3.8 low-income and lower-middle income coun- Continues to perform below par, particularly tries and within 12 months after gaining the first Leader in market influence and compliance. regarding trial data transparency and trial con- market approval. The company has filed to reg- Gilead once again ranks 1st in this area. It has a duct. Gilead’s relevant pipeline is smaller than ister half (50%) of its newest products in a few strong compliance system, including guidance the industry average, and it falls below indus- priority countries (disease-specific sub-sets and contractual obligations to contractors. In an try standards for clinical trial conduct and clinical of countries with a particular need for access innovative move, the company has developed a data transparency. to relevant products). However, most of these compliance guide for third parties. products gained marketing authorisation quite Lack of clear strategies for operationalising recently: some only in 2015 and 2016. Mixed performance in ethical marketing and R&D commitments. The company has commit- anti-corruption. Gilead has an ethical marketing ted to conducting R&D for resource-limited set- Monitors prices and provides pricing guidelines code that also applies to third parties, but it has tings. However, it does not provide evidence for some products. Gilead monitors the selling no performance incentives other than sales tar- that it has measurable time-bound strategies for price and mark-ups of its HIV/AIDS medicines in gets. Furthermore, Gilead does not disclose its ensuring its commitments are achieved. all applicable countries. For its hepatitis C prod- marketing activities and payments in countries ucts, the company sets pricing guidance for its within scope. The company is not a signatory to Poor measures to ensure clinical trials are con- sales agents via transfer prices. the UN Global Compact. ducted ethically. Despite having policies in place to ensure ethical clinical trial conduct, Gilead Consistent recall guidelines. Gilead has glob- Publicly discloses policy positions and con- does not provide evidence that it monitors clin- ally consistent guidelines for issuing drug recalls flict of interest policy. Gilead publishes its policy ical trial conduct or takes disciplinary action in all countries relevant to the Index where its positions related to access, in particular those when ethical violations occur. products are available. Gilead has not recalled

110 Access to Medicine Index 2016 a product for a relevant disease in a country in all of its hepatitis C portfolio. Notably, it did so Monitoring mainly the responsibility of part- scope during the period of analysis. It states that prior to registering the products. ners. Gilead contractually requires that donation it does make recall information publicly available. recipients have monitoring systems in place. The company receives regular reports on donated Does not adapt brochures or packaging to facil- CAPACITY BUILDING products. itate rational use. Gilead does not provide evi- RANK 18 SCORE 0.9 dence that it adapts its brochures or packaging Donates generic HIV/AIDS medicines annu- materials to address the needs of local popula- Limited focus on capacity building overall. ally. Gilead donates generic emtricitabine/teno- tions, e.g., in terms of language, literacy levels, Gilead’s performance drops in 2016. The com- fovir disoproxil fumarate and efavirenz/emtric- environmental conditions, demographic or cul- pany builds manufacturing capacity in coun- itabine/tenofovir disoproxil fumarate each year tural needs. tries in scope, but with few activities in the other to Uganda Cares and HardtHaven (a Ghanaian areas measured by the Index (including R&D and orphanage for children who are HIV-positive). Targets countries with a high need for access. supply chain management). Its targeting of local Gilead purchases these products from Mylan. Most of Gilead’s products target most of the needs and capacity gaps is limited. countries with the highest need for access: it ▶ Innovation: launched a hepatitis C donation has the highest proportion of products (50%) Above average in building manufacturing programme. In April 2015, Gilead launched an with equitable pricing strategies that target the capacity. Gilead makes a general commitment innovative donation programme with the goal of majority of priority countries (disease-specific to building manufacturing capacity in relevant eliminating hepatitis C virus in Georgia. The pro- sub-sets of countries with high need for access countries. In the period of analysis, the com- gramme includes universal screening and treat- to relevant products). Together, these strategies pany undertook a number of technology trans- ment, prevention and surveillance. The com- reach 77% of corresponding priority countries. fers with licensees for its HIV/AIDS and hepati- pany provided 5,000 free courses of sofosbu- They cover products for HIV/AIDS and hepatitis tis C medicines. vir (Sovaldi®) to the government of Georgia, and C. Gilead now has more products with equitable will provide 20,000 free courses of sofosbuvir/ pricing strategies than in 2014. Limited focus on strengthening pharmacovig- ledipasvir (Harvoni®) per year. ilance systems. Gilead routinely updates safety ▶ Best practice: high transparency of products’ labels for its products in countries in scope. registration status. Gilead is the only company However, the company did not disclose vol- to publish the registration status of the major- untary safety data sharing with authorities, or ity of its products for high-burden diseases in external capacity building activities (such as full detail, including when and where the prod- training partnerships) to strengthen pharmacov- uct was filed for registration, and whether it has igilance systems in countries in scope. been approved. Below average in building capacity outside the value chain. Gilead’s philanthropic strategy is rel- PATENTS & LICENSING atively weak: it targets local needs but does not RANK 1 SCORE 3.4 aim for measurable, sustainable objectives. The company discloses one relevant initiative – HiV- Maintains top rank in Patents & Licensing. This Link – to build HIV/AIDS treatment capacities in is due to its consistent approach to supporting rural areas of Ethiopia and Uganda. affordability and supply of its patented portfolio through licensing, and to its innovative applica- Weak performance in building R&D and supply tion of licensing outside of the HIV/AIDS space. chain management capacity. Gilead did not disclose any relevant activities to build R&D capac- Continuing engagement in voluntary licens- ity or strengthen supply chains in countries in ing. Gilead continues to pursue a broad licens- scope during the period of analysis. ing approach for its patented in-scope products. Its licensing agreements include access-oriented terms, and cover a comparatively high number PRODUCT DONATIONS of middle income countries with high HIV/AIDS RANK 13 SCORE 2.3 or HCV prevalence. Gilead remains a mid-ranking company. It main- ▶ Best practice: licensing all on-patent prod- tains its long-term donation programmes for vis- ucts in scope for high-burden diseases. Gilead ceral leishmaniasis and HIV/AIDS, and in a new licenses all of its patented products for high-bur- programme to eliminate hepatitis C in Georgia. den communicable diseases, including agreements made bilaterally and via the Medicines Commits to supporting WHO’s leishmaniasis Patent Pool. It licenses products pre-registra- control program. Gilead committed to donating tion, publicly discloses the agreements, includes 380,000 vials of amphotericin B liposome for access-oriented terms, and includes a compara- injection (AmBisome®) over the next five years tively high number of middle-income countries for a WHO control programme for visceral leish- with high prevalences of the disease in question maniasis. Gilead’s donations to the programme (either HIV/AIDS or hepatitis C). started in 2011.

▶ Innovation: licensing beyond HIV/AIDS. Gilead Does not disclose its donation policy. Gilead has made the significant step of licensing prod- states that all its donations adhere to WHO ucts outside of the HIV/AIDS space, to include Inter-Agency Guidelines. However, it did not dis- hepatitis C products. It has applied licensing to close its donation policies.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 111 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . AbbVie Inc. 9 (2014)

Stock Exchange: XNYS • Ticker: ABBV • HQ: North Chicago, IL, US • Employees: approx. 28,000

Ranking by technical area Ranking by strategic pillar Management 2.9

Compliance 2.2

R&D 3.0

Pricing 2.2

Patents 2.1

Capacity 1 .7 average leader 0 4 4 9 . . . Donations 2.7 . 0 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

AbbVie remains 9th. It has made positive moves: notably it ing and lobbying remains conservative. The company has has newly licensed HIV/AIDS products and increased its dona- been outperformed in other areas. It applies equitable pricing tions activities. Once again, it was not found to have breached to more products than in 2014, only half target high-burden laws or regulations. Its performance in R&D remains strong, countries. AbbVie takes limited account of socio-economic including in IP-sharing and engagement in R&D partnerships. factors when setting prices for different groups within coun- Its performance is static in certain areas, such as in access tries. It is building pharmacovigilance capacity, mainly in Latin management, and its approach to transparency in market- America.

CHANGE SINCE 2014

• Has implemented a new performance manage- • Has more products with equitable pricing • Expands donation activity for respiratory dis- ment system for governing its access-to-medi- strategies than in 2014, but still for limited tress in newborns to four countries. cine activities. proportion of products. • Provides pharmacovigilance training to regu- • Has once again received no negative judge- • Improves its accountability for its sales agents’ lators and universities, with a focus on Latin ments concerning unethical behaviour. pricing practices. America.

• Newly ties R&D targets to the Sustainable • Licenses ritonavir/lopinavir (Kaletra®) for Development Goals. generic manufacture by multiple companies (via the Medicines Patent Pool).

OPPORTUNITIES

Introduce a structured approach to product Establish an overarching access strategy. Target local needs when building capacity. registration. A structured approach would AbbVie can further develop its access AbbVie can strengthen its identification and tar- entail setting clear registration targets within a approaches into a strategy and clearly align it geting of local skills gaps in low- and middle-in- fixed timeframe, tied to decision-making crite- with its corporate strategy. It can prioritise the come countries when engaging in capacity build- ria. This can help AbbVie ensure new products wider availability of high-need products for pop- ing (for example, to increase local R&D capac- are brought to markets in low- and middle-in- ulations in need. This would require systemati- ity). The company can also demonstrate that it come countries as soon as possible upon leav- cally using more equitable pricing and reponsible has a clear process in place for mitigating con- ing the pipeline. It can also help ensure key, high- IP-management strategies. flicts of interest when building capacity outside need markets are not overlooked. The follow- the pharmaceutical value chain. ing products, for example, can be registered in Extend licensing activities. AbbVie can expand more high-need countries such as China and the geographic scope of licences agreed for for- Indonesia: combination ombitasvir/paritaprevir/ mulations of ritonavir (Kaletra®) in its licens- ritonavir (Technivie®) and dasabuvir/ombitas- ing activities. AbbVie can also use licensing to vir/paritaprevir+ritonavir (Viekira Pak®). increase access to dasabuvir/ombitasvir/paritaprevir+ritonavir (Viekira Pak®).

112 Access to Medicine Index 2016

Sales in countries in scope Net revenues by segment (2015)

USD 22,859 MN

Pharmaceutical Products

In scope, has sales Net revenues by geographic area In scope, has no sales Not in scope 22,000 20,000

MN USD 1 8,000 SALES AND OPERATIONS 1 6,000 1 4,000 1 2,000 AbbVie was established in 2013. It has one seg- In 2015, AbbVie completed the acquisition of 1 0,000 ment, pharmaceutical products, with products Pharmacyclics, a haematological oncology com- 8,000 for immunology, kidney disease, liver disease, pany, for approx. USD 20.8 bn. 6,000 neuroscience, oncology and women’s health. 4,000 2,000 The company has sales in 81 countries in scope. 0 Approximately 20% of its sales are generated in 2011* 2012* 2013 2014 2015 emerging and frontier markets. Rest of world Japan Europe North America

*AbbVie Inc became an independent company on 1 January 2013.

PORTFOLIO AND PIPELINE Products per disease category

2 AbbVie has a small portfolio of 10 products for The company is developing medicines that diseases in scope, and a mid-sized pipeline target five communicable diseases, four of 26 R&D projects that address the needs of Neglected Tropical Diseases (NTDs) and dia- people in countries in scope. betes. A large proportion of its pipeline targets 10 6 high-priority product gaps with low commer- 2 The majority of AbbVie’s portfolio consists of cial incentive, including for malaria, viral hep- medicines for viral hepatitis, HIV/AIDS and epi- atitis and certain NTDs. Since 2014, several of lepsy. The company has gained five market AbbVie’s R&D projects have progressed along Communicable Multiple categories approvals since 2014: including, in Q4 2014, the pipeline. Non-communicable FDA marketing authorization for dasabuvir (Exviera®) and ombitasvir/paritaprevir/ritona- AbbVie’s portfolio focuses on communicable and vir (Technivie®), both for the treatment of hep- non-communicable diseases: the majority targets atitis C. HIV/AIDS, viral hepatitis and epilepsy.

Pipeline projects First-line treatments and essential medicines

27% 27% 46% 3 4 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

AbbVie is active in R&D collaborations. AbbVie has access-oriented terms 60% of the medicines in AbbVie’s portfolio are listed on the WHO EML and/ and conditions for a group of its R&D collaborations that target malaria and or as first-line treatments: e.g., clarithromycin (Biaxin®) and ombitasvir/pari- NTDs. taprevir/ritonavir (Technivie®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 2 3 3 CD 2 4

NTD 5 NTD

MNH MNH

NCD NCD

AbbVie’s relevant pipeline is focused on innovative medicines, with most pro- AbbVie’s paediatric oral powder formulation of ritonavir (Norvir®) for HIV/ jects in early stages of research. It has five viral hepatitis medicines in clinical AIDS was granted EU approval in 2015. It has several features intended to development, plus atrasentan for diabetic nephropathy. improve suitability for children, such as the elimination of alcohol.

113 Access to Medicine Index 2016

AbbVie Inc.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Global Compact. AbbVie discloses only general ing by sharing expertise and compounds to sup- MANAGEMENT information about its marketing programmes in port product R&D. RANK 17 SCORE 2.9 low- and middle-income countries, and does not specify payments made. Commitment to R&D partnerships, but no Drops two places due to a lack of improvement policy. AbbVie’s NTD Initiative has qualitative in access management. AbbVie moves from Lack of transparency regarding lobbying activ- R&D targets for NTDs that include providing 15th to 17th place. Its performance is average in ities. AbbVie discloses a list of trade associa- compounds for screening and technical exper- all areas of measurement. It is not transparent tions from around the world in which one of its tise to outside partners. However, it does not regarding its access targets, the performance of employees is a board member. Nevertheless, it report an official policy of ensuring access-ori- its access activities and its stakeholder engage- does not publish its policy positions on topics ented measures are systematically included in its ment selection process. relevant to access to medicine, nor its policy to research partnerships. manage conflicts of interest. Takes strategic approaches to access but these Takes measures to ensure ethical clinical trial do not align with business strategy. Strategic Compliance with laws and codes. For the conduct. AbbVie has policies in place and takes approaches focus on, e.g., product registra- second consecutive Index, AbbVie has not been measures to ensure its in-house and outsourced tion, pricing, stakeholder engagement, patient the subject of any settlements for criminal, civil clinical trials are conducted ethically. assistance programmes, donations and R&D for or regulatory infractions relating to unethical NTDs. However, AbbVie has not specified how marketing or corruption anywhere in the world High transparency around clinical trials. AbbVie these components are connected, nor how they during the period of analysis. maintains high clinical trial data transpar- align with its business strategy. ency, including providing scientific researchers Strong disciplinary and enforcement systems. with access to patient-level data upon request. Has a centralised performance management AbbVie has strong procedures for holding all AbbVie manages requests for data in-house. system in place. AbbVie has assigned board- employees and business partners accountable Rejections based on scientific merit are for- level responsibility for access issues and has for their behaviour. If the company determines warded to an independent panel for review. implemented a centralised performance man- an employee has violated its code, laws, regu- agement system that measures the outputs, out- lations, policies or procedures, the employee is comes and impacts of its access-related activi- subject to remedial and/or disciplinary action, up PRICING, MANUFACTURING & ties. It does not disclose specific access-related to and including termination of employment. DISTRIBUTION targets or whether they are being met. RANK 10 SCORE 2.2 Auditing system in place. The company has an Has stakeholder engagement strategy, but auditing system, but does not provide details Drops 8 places due to relatively poor pric- is not transparent. AbbVie has a stakeholder about its processes and whether these include ing and registration performance. AbbVie has engagement strategy and demonstrates how auditing third parties. equitable pricing strategies for more prod- it incorporates input from local stakeholders. ucts than in 2014. However, it does not consider It also implements a stakeholder engagement socio-economic factors when setting prices programme, FutureFit, to ensure its employ- RESEARCH & DEVELOPMENT for different populations within a given coun- ees understand the needs and interests of their RANK 6 SCORE 3.0 try. It also does not perform as well as the lead- company’s stakeholders. However, AbbVie does ers when it comes to rapidly registering new not publish details of the stakeholder groups it Drops two places but maintains strong perfor- products in high-burden countries, or to adapt- engages with, nor its process for selecting who mance. AbbVie’s drop in rank is explained by the ing its brochures and packaging to facilitate the to engage with. improved performance of its peers. It maintains rational use of its products. its strong level of engagement in collaborative R&D, and upholds high standards of clinical trial Modest increase in equitable pricing activ- MARKET INFLUENCE & COMPLIANCE conduct and data transparency. The company ity. Compared to 2014, AbbVie has more prod- RANK 8 SCORE 2.2 has a mid-sized pipeline of projects intended to ucts with equitable pricing strategies: it now meet the needs of people in countries in scope. takes affordability into account when pric- Drops four places as a result of limited trans- A large proportion of these target independently ing some hepatitis C products (in addition to parency. Overall, the company has a strong com- identified high-priority product gaps. products for HIV/AIDS, as in 2014). However, pliance system, but its transparency around its only 20% of its products have equitable pric- marketing and lobbying activities is limited. R&D commitments tied to clear targets. ing strategies that target priority countries (dis- AbbVie’s explicitly ties its R&D commitments to ease-specific sub-sets of countries with a par- Low transparency regarding ethical marketing external public health priorities, for example to ticular need for access to relevant products). and anti-corruption measures. AbbVie has a lim- Sustainable Development Goal 3. The company Together, they cover 50% of all corresponding ited marketing code and its sales staff are incen- has processes for goal-setting and monitoring priority countries. For its inter-country equitable tivised using sales targets only, which may not and for evaluating progress toward its relevant pricing strategies, AbbVie considers either dis- be sufficient to curb unethical behaviour. The R&D commitments. It contributes to meeting ease burden or prevalence, as well as the state company is not a signatory of the United Nations the London Declaration targets by 2020, includ- of public financing systems. For its intra-coun-

114 Access to Medicine Index 2016 try equitable pricing strategies, AbbVie only con- ritonavir containing Norvir® and Kaletra® in PRODUCT DONATIONS siders affordability for different population seg- an access-oriented manner (via the Medicines RANK 9 SCORE 2.7 ments or payers. Patent Pool). This makes it the newest pharmaceutical company to engage in non-exclusive vol- Rises four places. AbbVie moves from 13th to Limited insight into registration approach. untary licensing. 9th position. With four donation programmes, AbbVie does not have disease-specific registra- Abbvie has the second largest number of struc- tion targets and does not publish products’ reg- Does not publish its policy positions on trade tured donation programmes. istration statuses or the decision-making crite- agreements. AbbVie does not disclose its policy ria it uses to file for registration. As a result, it is positions regarding the Doha Declaration on the Expands product donation activity. In 2015, uncertain to what extent the company registers TRIPS agreement and public health. AbbVie launched a new donation programme, its products based on the need for access. in cooperation with Direct Relief, for beract- ant (Survanta®), for respiratory distress in Newest products only registered in a few CAPACITY BUILDING newborns. It already donates this medicine in high-burden countries. AbbVie has filed to regis- RANK 12 SCORE 1.7 Kosovo, in a programme with AmeriCares. Its ter a few of its recently launched products in all new programme aims to improve the survival corresponding priority countries (disease-spe- No change in rank. AbbVie performs above rates of premature babies in Honduras, India, cific sub-sets of countries with a particular need average when it comes to strengthening phar- Jamaica, and Paraguay. for access to relevant products). However, most macovigilance systems and disclosed one of of these products were first marketed 15–20 the strongest commitments to reporting sus- Clear commitment to product donations. years ago. AbbVie has filed to register the two pected falsified medicines. Its performance in AbbVie has made a public commitment to sup- products launched since 2014 in only a few pri- other areas, however, is comparatively weak. It porting targeted product donations that build ority countries. does not have a clear focus on local needs when health system capacity, increase access to med- engaging in capacity building. icine and strengthen health infrastructure. Consistent recall guidelines. AbbVie has glob- AbbVie also commits to adhering to a strict ally consistent guidelines for issuing drug recalls Among the leaders in strengthening pharma- Global Product Donations Policy, which aligns in all countries relevant to the Index where its covigilance systems. AbbVie voluntarily shares with WHO and PQMD guidelines. products are marketed. AbbVie has not recalled safety data with authorities upon request and a product for a relevant disease in a country in updates safety labels in countries in scope. The Improved monitoring of donations. AbbVie’s scope during the period of analysis but states company has a number of initiatives to build Global Product Donations Policy requires dona- that product recalls would be made public via its local pharmacovigilance capacity, focusing on tion partners to regularly report on whether company website. Latin America. donated products reach target countries. AbbVie screens potential partners to ensure they have Widespread pricing monitoring and track- Strong information sharing to improve supply implemented and abide by appropriate policies ing. For its HIV/AIDS and hepatitis C products, chains. AbbVie commits to confirming sus- and procedure (set by WHO, the FDA, PDMA and AbbVie has systems for monitoring and tracking pected falsified medicines and reporting con- DEA). AbbVie regularly participates in third party prices in all countries. In certain markets, it also firmed cases in a timely manner, and shares audits of its donation partners. provides pricing guidance to distributors. other information to build supply chain management capacity in countries in scope. While the Makes ad hoc donations for disaster relief and Limited adaptations of its brochures and pack- company shares information, it does not under- in emergencies. Since 2014, AbbVie has donated aging. AbbVie does adapt the brochures and take other supply chain strengthening activities products for disaster relief in response to the packaging for some of its HIV/AIDS and hepati- with local partners, such as training partnerships. 2015 Nepal earthquake and the 2014-2015 Ebola tis C products, but only to address the language epidemic. needs of patients in low- and middle-income Building R&D capacities in Brazil and countries. It does not provide any evidence that Bangladesh. AbbVie partners relatively rarely it takes literacy, environmental, demographic or with local research organisations. The company cultural needs into account. has partnerships to build R&D capacity in Brazil, focused on NTDs, and in Bangladesh, including for drug discovery and epidemiology. It does not PATENTS & LICENSING clearly commit to long-term partnerships or tar- RANK 8 SCORE 2.1 geting local skills gaps.

Rises 9 places due to improved engagement in Limited evidence of mitigating conflict of inter- licensing. AbbVie moves up from 17th position est in capacity building outside the value chain. to 8th due to its new engagement in pro-access AbbVie undertakes capacity building activities licensing (via the Medicines Patent Pool). It is outside the pharmaceutical value chain, focus- held back from rising further by its comparative ing on preterm newborn care, support and advo- lack of transparency regarding its approach to IP. cacy for patients living with hepatitis C and HIV/ AIDS, and health workforce training, but does Patent filing or enforcement policy unspecified. not clearly mitigate conflicts of interest. AbbVie does not specify its patenting policy in low income countries (i.e., where it commits not Weak approach to building manufacturing to file for or enforce patent rights). Neither does capacity. AbbVie does not have a clear strategy it publish the status of its patents. or process for building manufacturing capacity in response to local skills gaps in countries Newly engages in non-exclusive licensing. in scope. It did not report any efforts to build AbbVie has agreed access-oriented licences local manufacturing capacity during the period for both paediatric and adult formulations of of analysis.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 115 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Novo Nordisk A/S 2 (2014)

Stock Exchange: XCSE • Ticker: NOVOB • HQ: Bagsværd, Denmark • Employees: 41,122

Ranking by technical area Ranking by strategic pillar Management 4.3

Compliance 2.9

R&D 1 .8

Pricing 2.4

Patents 1 .2

Capacity 2.5 average leader 5 . 0 9 3 6 . . Donations 2.6 . 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Novo Nordisk has fallen in this Index, yet remains in the top programme, which is limited in geographic and population ten. It maintains solid access management structures and scope. It now publishes the statuses of its patents, but has yet compliance systems, but drops across other areas of meas- to agree a non-exclusive voluntary licence for one of its pat- urement. It has a small relevant pipeline, and engages little in ented products. In Capacity Building, the company no longer collaborative R&D. Its equitable pricing strategies only cover leads but remains strong overall. human insulin products, representing 27% of its portfolio for diseases in scope. Novo Nordisk has one structured donation

CHANGE SINCE 2014

• Has leading access management structures in • Has improved its accountability for its sales • Launched Cities Changing Diabetes in 2014, a place, supported by two systems for tracking agents’ pricing practices. partnership programme designed to identify and assessing access-related performance. and address the root causes of the rise of type • Publishes information about all patents held 2 diabetes in urban areas. • Has not been found in breach of laws or reg- worldwide. ulations related to marketing and corruption • Expands Changing Diabetes in Children dona- since 2014. • Launched the No Empty Shelves partnership tion programme, enrolling five additional coun- with PATH in 2014 to identify capacity gaps in tries in 2016. • Has equitable pricing strategies for the same supply chain management for diabetes medi- human insulin products as in 2014 but has cines and technologies in low- and middle-in- updated its commitment to providing low- come countries. priced human insulin, to include more countries and humanitarian organisations.

OPPORTUNITIES

Work with partners to address access con- Ensure sustainable access to insulin. In addi- second-line treatment for diabetes) to permit cerns for non-communicable diseases more tion to its pricing strategy for human insulin, generic medicine manufacturers to produce bio- broadly. Novo Nordisk can leverage its exper- Novo Nordisk can implement new measures to similars. This can help address issues of afforda- tise in diabetes to support public and/or pri- support sustainable and affordable access to bility and supply. Considering the complexity of vate partners in strengthening care for different new diabetes treatments (including insulin ana- biosimilar production, the company can consider non-communicable diseases. logues) that are suitable for people in low- and additional technology transfer and support. middle-income countries. It can assess local Expand strong capacity building approach. needs per population segment when customis- Use stakeholder engagement to inform its Novo Nordisk can expand its capacity building pricing. It can implement registration com- R&D priorities. Novo Nordisk can apply its existing activities and target local needs and skills mitments to prioritise those markets where the ing model of engaging with health care profes- gaps more strategically (e.g., in its R&D partner- product is urgently needed. sionals to ensure R&D priorities are based on ships in China and Iran). The company can also the needs of patients in low- and middle-income share information with local stakeholders to help Consider a company-wide approach to volun- countries. This includes ensuring specific access strengthen supply chains and pharmacovigilance tary licensing. Novo Nordisk can consider terms plans are in place for candidates currently in the systems. for voluntary licences of its patented innova- pipeline (e.g., for its candidate oral formulation tive diabetes products (e.g., long-acting ana- of insulin). logues such as insulin degludec (Tresiba®), a

116 Access to Medicine Index 2016

Sales in countries in scope Net sales by segment (2015)

22,337 MN

DKK 107,927 MN

85,590 MN

Diabetes and obesity care Biopharmaceuticals

In scope, has sales Net sales by geographic area In scope, has no sales Not in scope 1 00,000 90,000 MN DKK 80,000 SALES AND OPERATIONS 70,000 60,000 Novo Nordisk operates in two divisions: Diabetes 50,000 & Obesity Care, and Biopharmaceuticals. The 40,000 company is active in five product areas: diabe- 30,000 20,000 tes care, haemophilia, growth hormone therapy, 1 0,000 obesity and hormone replacement therapy. Novo 0 Nordisk has sales in 79 countries in scope, and 2011 2012 2013 2014 2015 over 20% of its sales come from emerging and Rest of world China Japan/Korea Europe North America frontier markets.

PORTFOLIO AND PIPELINE Products per disease category

Novo Nordisk has the smallest relevant portfo- from the meglatidine therapeutic class. lio in the Index, with 11 medicines. It has a small The company is developing four medicines, all in pipeline of four R&D projects that address the phase I clinical trials. These include a long-acting needs of people in countries in scope. Its rele- basal insulin analogue for once-weekly dosing, 11 vant portfolio and pipeline focus exclusively on an appetite-regulating hormone peptide tyrosine diabetes. and a liver-preferential prandial insulin analogue. The latter has progressed from discovery stage

Nine of its 11 medicines are insulins, including to phase I trials since 2014. Non-communicable human insulin and insulin analogues. In 2015, its insulin degludec (Tresiba®) was approved for The company’s focus is on diabetes. It is not tar- use by the FDA. Its remaining two products are geting high-priority product gaps with low com- Novo Nordisk’s medicines all target diabetes: nine liraglutide (Victoza®), a glucagon-like peptide-1 mercial incentive, for diseases that disproportio- out of 11 are insulins and insulin analogues. receptor agonist, and repaglinide (Novonorm®), nately affect low- and middle-income countries.

Pipeline projects First-line treatments and essential medicines

1 00% 9 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Novo Nordisk’s relevant R&D projects are not being developed in Human insulin is Novo Nordisk’s only product on the WHO EML and/or listed partnership. as a first-line treatment. The company has two human insulins in its portfolio.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD 4 NCD

Novo Nordisk’s pipeline focuses on innovative medicines. It is developing a Novo Nordisk is not currently adapting any products to meet the needs of daily oral insulin tablet that will not require refrigeration, potentially improv- people living in low- or middle-income countries. ing access to insulin in settings without stable cold chains.

117 Access to Medicine Index 2016

Novo Nordisk A/S

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE breaches of laws and regulations during the als to understand the hurdles to diabetes treat- MANAGEMENT period of analysis. Its transparency regarding ment. It does not provide evidence that it uses RANK 2 SCORE 4.3 lobbying and marketing is above average. the insights gathered in order to base R&D strategies on public-health and product needs. A leader, due to a strong strategy and sys- Goes beyond sales-linked incentives; has broad tems. Novo Nordisk once again performs well in marketing code. Novo Nordisk has a marketing Significant investment in R&D for diabetes. A this area, rising one place to 2nd. It has a strong code that also applies to third parties. It rewards relatively high proportion of Novo Nordisk’s R&D access strategy, good performance management its sales agents for more than just sales, using investments are relevant to the Index. It pub- systems and an innovative initiative in govern- product availability and stock maintenance as lishes its investments into diabetes and obesity ance and stakeholder engagement. alternative performance metrics. Nevertheless, care (DKK 19,793 mn annually), approximately it does not disclose information about its mar- 90% of which is relevant to the Index. Access is integrated into corporate strategy, keting activities in countries in scope. at global and local levels. Globally, the com- No commitment to access-oriented R&D part- pany aims to reach 40mn people with diabetes Relatively high transparency regarding lobby- nerships. The company does not commit to by 2020. This target is included in the company’s ing. Novo Nordisk is transparent about its lobby- ensuring access-oriented terms are system- annual strategic planning process. At the local ing activities and public policy positions. It states atically included in its research partnerships. level, Novo Nordisk assesses which of its activ- it does not make any political contribution in Neither does it publish the relevant terms and ities can be scaled up or adapted to increase countries in scope. It has a policy for mitigating conditions of its research collaborations. The their impact. conflicts of interest that is not publicly available. company has no relevant R&D partnerships nor intellectual property sharing arrangements. Double performance management system. Auditing system in place. Novo Nordisk plans its Novo Nordisk uses two performance manage- audits based on an independent risk assessment, Takes measures to ensure clinical trials are ment systems to monitor and measure progress to ensure certain units are visited every year and conducted ethically. Novo Nordisk has poli- towards access targets. The first is its Balanced that all units are visited every third year. Two to cies in place and takes measures to ensure its Scorecard, used for tracking the company’s three external audits of selected high-risk third in-house and outsourced clinical trials are con- goals, and the second is its People Performance parties are performed annually. ducted ethically. Process system, for tracking employee targets. Compliance with laws and codes. As in 2014, High transparency around clinical trials. The Well-defined strategic stakeholder engage- Novo Nordisk has not been the subject of any company upholds high standards of clinical trial ment. Novo Nordisk has a strategic approach settlements for criminal, civil or regulatory data transparency, including providing scien- to stakeholder engagement. The process is infractions relating to unethical marketing or tific researchers access to patient-level data well defined, making it easier for subsidiaries to corruption anywhere in the world during the upon request. Novo Nordisk has established an follow. The details are not publicly available. period of analysis. independent, expert-review governing body to review such requests. ▶ Innovation: governance and stakeholder Enforcement process applies to third parties. engagement approach. Cities Changing Novo Nordisk has an enforcement process in Diabetes is a cross-disciplinary and cross-sector place, including disciplinary measures. Sanctions PRICING, MANUFACTURING & partnership programme designed to identify and include re-training, counselling, oral warnings DISTRIBUTION address the root causes of the rise of type 2 dia- and dismissal. Termination clauses are in place in RANK 5 SCORE 2.4 betes in urban areas including in Johannesburg, contracts with third parties. Mexico City, Tianjin and Shanghai. It aims to sup- Drops two places due to a static performance. port the implementation of sustainable solutions Novo Nordisk falls from 3rd place as its static in urban areas. RESEARCH & DEVELOPMENT performance in equitable pricing is outper- RANK 15 SCORE 1.8 formed by peers making improvements. ▶ Best practice: benchmarking targets. Novo Nordisk is committed to systematically review- Drops in R&D, with a smaller pipeline for the Same products with equitable pricing. Novo ing its contribution to each of the 17 Sustainable poor. Novo Nordisk’s performance fell, largely Nordisk has equitable pricing strategies for the Development Goals, focusing on health and due to a decrease in the size of its adaptive pipe- same human insulin products as in 2014. It has improving the well-being and lives of patients. line that targets unmet medical or public health expanded its commitment to providing low- needs in countries in scope. The company was priced insulin: in 2017, it will guarantee a ceiling also overtaken by several peers whose perfor- price of USD 4 per vial of human insulin in Least MARKET INFLUENCE & COMPLIANCE mance improved. Developed Countries. Some (27%) of its prod- RANK 2 SCORE 2.9 ucts have pricing strategies that target prior- Strong commitment to R&D for diabetes. One ity countries (disease-specific sub-sets of coun- Top performer in market influence and com- of Novo Nordisk’s strategic aims is to build and tries with a particular need for access to relevant pliance. Novo Nordisk is 2nd once again, with maintain a leading position in emerging mar- products). These strategies reach the majority a strong compliance system, and no confirmed kets. The company engages with profession- (70%) of corresponding priority countries. The

118 Access to Medicine Index 2016 company currently only considers affordability Evidence of anti-competitive behaviour. During vant countries. It undertakes a number of capac- in its intra-country equitable pricing strategies, the period of analysis Novo Nordisk reached a ity building activities, including permanently overlooking other socio-economic factors. settlement with the Michigan Federal court to attaching an in-house expert to a third-party settle an anti-trust action concerning repaglinide plant in India. ▶ Innovation: distribution project. In 2015, (Prandin®). At the time of analysis, there was no Novo Nordisk Business Area Africa (BAAF) ini- record of an appeal identified. tiated the BAAF Distribution Optimisation pro- PRODUCT DONATIONS ject to reduce the price to patients of its full dia- No public acknowledgement of the Doha RANK 10 SCORE 2.6 betes portfolio and to work with distributors to Declaration. Novo Nordisk does not publicly optimise the supply chain. This is an important acknowledge the Doha Declaration, though it One of the biggest fallers. Novo Nordisk drops step as, even with Novo Nordisk’s ceiling price states that public health emergencies require to 10th position. Novo Nordisk has one on-go- for Least Developed Countries, there are other exceptions to intellectual property rights in ing structured donation programme, with com- barriers along the distribution chain that can extraordinary circumstances. paratively limited geographic and population increase the cost of insulin. coverage.

Pricing guidelines for all local sales agents. CAPACITY BUILDING Continues to donate insulin for children. In Novo Nordisk provides guidelines on mar- RANK 7 SCORE 2.5 2009, Novo Nordisk initiated its Changing gins and distributor fees. Additionally, it con- Diabetes in Children (CDiC) programme. It is ducts a formal bi-annual internal audit on pric- Previous leader, now outperformed. Novo currently funded until the end of 2020, is imple- ing and pricing structures in all mid-sized and Nordisk fell six places, losing its leading position. mented in nine countries and provides insulin to large markets. Although Novo Nordisk performed well, particu- 13,516 children. Five more countries were slated larly in capacity building outside the pharmaceu- to be enrolled in 2016. Leader in the area of registration. Novo tical value chain. It has been outperformed by Nordisk only commits to registering products peers. This is particularly the case with regard Complies with WHO guidelines for donations. for a sub-set of diseases in some lower-middle to sharing information with stakeholders to Novo Nordisk has internal guidelines for making income countries, but provides no timeframe. strengthen local supply chains and pharmacovig- emergency drug donations. These require adher- However, in practice, the company has filed to ilance systems. ence to WHO’s Guidelines for Drug Donations. register all (100%) of its newest products in the majority of priority countries (disease-specific Leader in building capacity outside the value Tailored monitoring structure. Within its CDiC sub-sets of countries with a particular need for chain. Novo Nordisk has a very strong approach programme, Novo Nordisk works with partners access to relevant products). The majority of to philanthropy, including targeting local needs, to ensure donated products are monitored and these products were launched over 10 years ago. through the World Diabetes Foundation. The that they reach intended users. As part of the company discloses a number of relevant initia- programme, each country has a system in place Consistent recall guidelines and public dis- tives for building locally-needed capacities out- for monitoring whether the donated insulin is closure of recalls. Novo Nordisk has consist- side the pharmaceutical value chain, focusing on administered to the intended users. Each system ent guidelines for issuing drug recalls in all coun- diabetes care. is tailored to the local setting. tries relevant to the Index where its products are available. The company publicly discloses aggre- Building R&D capacity in China and Iran. Novo Makes ad hoc donations for emergency relief. gate information on relevant recalls in its annual Nordisk has local partnerships for building dia- Since 2014, Novo Nordisk has donated insulin for report and is the only company to make any betes research capacity in Iran (with Tehran emergency relief. The company donated prod- public disclosure in this area. University of Medical Sciences), and China (with ucts during the 2014-2015 Ebola epidemic and the Chinese Academy of Sciences). Both part- the 2015 refugee crisis in Syria. Limited brochure & packaging adaptation for nerships are long-term, but it is not clear how rational use. Novo Nordisk provides evidence they target local skills gaps. of adapting brochure and packaging to address only language needs with the aim of facilitating Strengthening supply chains in sub-Saharan rational use by patients. Africa. Working in partnerships, Novo Nordisk is actively strengthening local supply chains in countries in scope, particularly in sub-Saharan PATENTS & LICENSING Africa. However, the company did not demon- RANK 12 SCORE 1.2 strate that it shares information with relevant stakeholders to improve supply chain manage- Patent disclosure. Novo Nordisk publishes ment skills. information about the patent rights it holds. It indicates where the patent has been granted, Average performance in strengthening phar- whether extension has been applied for, and the macovigilance systems. Novo Nordisk has a patent number. number of activities for building local pharmacovigilance skills: including a partner- Public commitment not to file or enforce. Novo ship with the Bangladesh Ministry of Health to Nordisk has published a commitment not to improve capacity of the National Drug Control file for or enforce patents in Least Developed Laboratory. The company did not provide evi- Countries and low-income countries. dence that it voluntarily shares safety data with relevant authorities. Lack of engagement in licensing. Novo Nordisk does not engage in non-exclusive voluntary Manufacturing capacity building receives least licensing of its patented products, and has made attention. Novo Nordisk makes a general com- no public offer to consider this. mitment to build manufacturing capacity in rele-

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 119 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Eisai Co., Ltd. 11 (2014)

Stock Exchange: XTKS • Ticker: 4523 • HQ: Tokyo, Japan • Employees: 9,877 (consolidated)

Ranking by technical area Ranking by strategic pillar Management 3.8

Compliance 2.7

R&D 2.6

Pricing 1 .7

Patents 1 .6

Capacity 1 .5 average leader 0 7 4 6 . Donations . . 3.5 . 0 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Eisai remains 11th. It improves modestly across all areas, but no disease-specific commitment to registering new products is outperformed by peers. It is among the leaders in Market in countries in scope, nor does it use intra-country equitable Influence & Compliance, with no settlements relating to pricing for products in scope. Eisai has not licensed relevant unethical behaviour. It also improves in R&D, conducting a products, nor published patent statuses. Eisai’s donations for higher portion of relevant R&D through partnerships than lymphatic filariasis (LF) reach a significant number of benefi- any other. Many of these partnerships are based on terms for ciaries. It continues to build capacity in all areas of the value ensuring access. Eisai drops in pricing, however, as it makes chain, albeit through a relatively low number of activities.

CHANGE SINCE 2014

• Maintains a comprehensive access-to-medi- • Has published its policy on clinical trial data • Continues to work toward the elimination cine strategy. transparency, and now provides researchers of lymphatic filariasis through its donation with access to anonymised patient-level data. programme. • Takes a strong approach to stakeholder engagement, with a best-practice model • Has applied inter-country equitable pricing for creating insight through stakeholder strategies to more products than in 2014. interaction. • Commits to not enforcing its patents in Least • Has received no negative judgements concern- Developed Countries, low-income countries, ing unethical behaviour. or Low Human Development countries.

OPPORTUNITIES

Partner to build capacity in response to local Expand and strengthen R&D in partnership. in countries with high inequality and/or high out- needs. Eisai can build on its experience with Eisai can expand its collaborative R&D activities of-pocket spending (e.g., Afghanistan, Cambodia, partnerships in other areas (e.g., its best-prac- to more disease areas, building upon the strong Mexico, India). tice approach to R&D collaborations) to expand public health rationale already informing its R&D and enhance its capacity building activities activities for neglected tropical diseases (NTDs), Expand pro-access approach to filing for and within the pharmaceutical value chain, by work- and recognising additional priorities set by global enforcing patents. Eisai can expand its pro-ac- ing with partners to understand and target local health stakeholders. The company can also cess approach to filing for and enforcing patents needs. ensure access-oriented terms are systematically in Least Developed Countries, low-income coun- included in its R&D partnership agreements. tries, or Low Human Development countries. Set registration targets for key diseases. Eisai Eisai can do this by publishing its approach to can set disease-level registration targets for Expand access approach to mental health prod- voluntary licensing and its use as a mechanism low- and middle-income countries. This will ucts. Eisai can expand its approach for improv- to support affordability and supply. To comple- help ensure people in those countries gain early ing access to mental health products that are ment this approach, Eisai can publicly disclose access to high-need products. The company can needed in low and middle income countries the status of its patents, clearly showing where also register existing products in more countries (e.g., escitalopram (Es.O.K.®), and amoxap- products are on and off patent, and when pat- with high burdens of disease. ine (Defanyl®)). The company can also imple- ents are due to expire. ment intra-country equitable pricing strategies

120 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015) 1 6,1 62 MN

JPY 547,923 MN

531 ,761 MN

Pharmaceutical business Other business

In scope, has sales Revenues by segments In scope, has no sales Not in scope 500,000 450,000 MN JPY 400,000 SALES AND OPERATIONS 350,000 300,000 Eisai operates through two segments, with its Eisai currently has sales in 26 countries in the 250,000 pharmaceuticals business offering prescrip- Index scope. However, sales are limited in coun- 200,000 tion pharmaceuticals, consumer healthcare and tries outside Japan and the US. 1 50,000 generic medicines. Eisai divested its diagnos- 1 00,000 50,000 tics business in November 2015. The compa- 0 ny’s focus areas are oncology and neuroscience, 2011* 2012* 2013* 2014 2015 including neurodegenerative and neurological Rest of world China Japan Europe Americas disorders.

*Due to a change in company reporting practices, numbers from 2011, 2012, 2013 and 2014 are incomparable. PORTFOLIO AND PIPELINE Products per disease category

1 Eisai has a small portfolio of relevant products, Compared with 2014, the company has a number 1 of 12 medicines in total, and a mid-sized pipeline of new medicines in development, targeting a of projects that address the needs of people in wide range of diseases: epilepsy; malaria; lym- countries in scope, with 14 R&D projects in total. phatic filariasis; onchocerciasis; Chagas disease; 12 and leishmaniasis. It also has projects target- The majority of Eisai’s relevant medicines target ing influenza. Its projects for malaria and NTDs non-communicable diseases (NCDs). These are target high-priority product gaps with low com- 1 0 mainly mental health conditions and neurological mercial incentive. Communicable Non-communicable disorders: anxiety disorder; bipolar affective dis- Neglected tropical order; epilepsy; migraine; and unipolar depressive disorders. Eisai’s medicines target non-communicable diseases, mainly mental health conditions and neurological disorders, specifically epilepsy.

Pipeline projects First-line treatments and essential medicines12

57% 29% 1 4% 8 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Eisai has R&D partnerships in all its disease areas, except epilepsy. Many Three medicines, all off-patent, are listed on the WHO EML and/or as first- involve the Global Health Innovative Technology Fund (GHIT), which requires line treatments: valproate (Val.O.K.®), escitalopram (ES.O.K.®) and diethyl- reasonable prices in low-income countries or royalty-free licences. carbamazine citrate (DEC).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 6 CD

NTD 4 NTD

MNH MNH

NCD NCD

Eisai’s R&D focus is on innovative medicines. One of its medicines in clinical Eisai is collaborating to develop a fixed-dose combination (FDC) of benzni- development is the oral anti-malarial candidate compound SJ733, a non-ar- dazole and E1224 for Chagas disease. This project involves multiple access temisinin-based therapy with the potential to cure in a single dose. plans, including a no-profit, no-loss policy.

121 Access to Medicine Index 2016

Eisai Co., Ltd.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Mixed performance in ethical marketing and new in 2015. The company also shares intel- MANAGEMENT anti-corruption. Eisai has a marketing code of lectual property with partners such as the RANK 8 SCORE 3.8 conduct with performance incentives linked to Wellcome Trust, Medicines for Malaria Venture, the number of patients reached and treated. Its Macrofilaricide Drug Accelerator and WIPO Remains 8th, with a best-practice stakeholder code also applies to third parties. Nevertheless, Re:Search. engagement model. It improves in all areas, and it does not disclose marketing activities in rele- has a best-practice stakeholder engagement vant countries, nor is it a signatory of the United No overarching policy for including access pro- programme. However, it does not rise in this Nations Global Compact. visions. Despite a strong performance in collab- area because its peers have kept pace. orative R&D, Eisai does not commit to ensur- Some transparency in lobbying activities. ing access-oriented terms are systematically Access strategy as a partnership model. Eisai’s Eisai has a section on its website dedicated to included in its research partnerships. access strategy is a partnership-based model publishing its policy positions, which include directed at improving the affordability, avail- Universal Health Coverage and anti-counterfeit- ▶ Best Practice: collaborative R&D. Eisai’s ability and adoption of medicines. Along with ing. It is transparent about which organisations it World Health Initiative, established in 2012, pre- human healthcare and innovation, providing is a member of, but does not disclose the finan- sents a clear approach to engaging in prod- access is one of the company’s three corporate cial contributions it makes to these organisa- uct development partnerships. Compared to its guiding principles. The company sees its access tions. The company does not provide informa- peers, the company is conducting the highest approach as an opportunity to enter emerging tion on its conflict of interest policy. proportion of its R&D projects through partner- markets. ships, and a high proportion of these partner- No negative judgements. Eisai has not been ships are based on terms for increasing access. Transparent on performance toward access the subject of any settlements for criminal, targets. Eisai publishes information related to its civil or regulatory infractions relating to unethi- PRICING, MANUFACTURING & access-linked commitments, targets and perfor- cal marketing or corruption anywhere in the DISTRIBUTION mance on its website. Data is collected and ana- world during the period of analysis.. The com- RANK 14 SCORE 1.7 lysed through a centralised performance man- pany enforces an anti-bribery and anti-corrup- agement system. tion policy worldwide, but it is not clear whether Drops four places with limited registration or it also applies to third parties. pricing in high-need countries. Eisai falls four Incentives for access in place. Eisai provides places from 10th, as its registration and pricing its employees with both financial and non-fi- efforts are limited in countries with high burdens nancial incentives to support performance rele- RESEARCH & DEVELOPMENT of disease. It does not implement intra-country vant to access. For example, the Eisai Innovation RANK 8 SCORE 2.6 equitable pricing in countries in scope. Paper is a non-financial incentive: employees are offered the opportunity to write a paper pro- R&D commitments linked to public health. Eisai Modest increase in equitable pricing, but from moting access to medicine and to improve gen- is committed to treating diseases that impact low base. Compared to 2014, Eisai has increased eral awareness of access. low-income countries, through in-house projects the number of products with inter-country equi- and through product development partnerships. table pricing strategies. These are in the areas ▶ Best Practice: stakeholder engagement Eisai’s commitment to R&D for NTDs is informed of acute hepatitis B virus and epilepsy. Yet only model. Eisai implements a global “Socialisation, by a strong public health rationale, including con- a few (8%) of its products have pricing strate- Externalisation, Combination and Internalisation sideration of resistance to and efficacy of cur- gies that target priority countries (disease-spe- (SECI)” model for creating new knowledge rent treatments, and priorities set by global cific sub-sets of countries with a particular need through interactive exchange between patients health stakeholders. for access to relevant products). Together, these and Eisai employees. It encourages all employees strategies reach just a few (4%) priority coun- around the world to use 1% of their total busi- Takes measures to ensure clinical trials are tries. Depending on the strategy, Eisai considers ness hours to interact with patients. The knowl- conducted ethically. Eisai has policies in place different socio-economic factors when setting edge acquired through this process is trans- and takes measures to ensure that its in-house prices, such as disease burden, public financing lated into pilots that are then implemented in and outsourced clinical trials are conducted ethi- and healthcare systems and demand, supply and the business. cally. cost analyses.

High transparency around clinical trials. The Pricing guidelines in place for most sales MARKET INFLUENCE & COMPLIANCE company upholds high standards of clinical trial agents. In most countries in scope where Eisai RANK 3 SCORE 2.7 data transparency, including newly providing sci- conducts business, Eisai provides pricing guide- entific researchers access to patient-level data lines to local sales agents, including local affili- Among the leaders in compliance. Eisai climbs upon request, via clinicalstudydatarequest.com. ates and third-party agents. The company moni- three positions to 3rd. It performs strongly in tors prices in China, through an IT system. compliance, in part because it was not found, NTD Drug Discovery Booster. Eisai shares intel- during the period of analysis, to have been the lectual property for leishmaniasis and Chagas Consistent recall guidelines. Eisai’s guidelines subject of settlements for unethical behaviour. disease via the NTD Drug Discovery Booster, for issuing drug recalls are consistent glob-

122 Access to Medicine Index 2016 ally, and apply in all countries in scope where ily share safety data with authorities. The com- Regular audits. Eisai is one of the few com- its products are available. Eisai has not recalled pany has a small number of activities in Asia to panies undertaking regular audits and requir- a product for a disease in scope in a country in build local pharmacovigilance capacity. ing regular reporting on the distribution, stor- scope during the period of analysis. It does not age, and administration of its structured dona- have a policy to disclose recalls on its website. Neglected tropical disease R&D capacity build- tion programme. ing. Eisai has a relatively small amount of part- No registration targets, no transparency. nerships with local research organisations to Eisai does not provide evidence of setting dis- build R&D capacity, focused on NTDs: with ease-specific registration targets. It does not Fiocruz in Brazil and the University of Khartoum publish where its products are registered or the in Sudan. It is not clear how the company targets criteria it uses to decide when and where to reg- local skills gaps through these partnerships. ister its products. The company has filed to register less than half (43%) of its newest products Focus on in-house manufacturing capacity in just a few priority countries (disease-specific building. Eisai’s commitment to assessing needs sub-sets of countries with a particular need for and building capacity in countries in scope is for access to relevant products). in-house manufacturers. The company undertakes a number of capacity building activities Language, literacy and environmental needs across Asia, including with third parties, but considered. Eisai adapts the brochure and pack- focuses on strengthening in-house skills. aging of its DEC (diethylcarbamazine citrate) tablets to include information in local languages Weak performance in building capacity outside in Thailand, Myanmar, Indonesia and India. For the value chain. Eisai undertakes philanthropic the same product, it uses illustrations to ensure activities but does not disclose a clear philan- information can be understood by populations thropic strategy or relevant initiatives to build of varying literacy levels and addresses environ- capacities outside the pharmaceutical value mental needs by using blister packs. chain in response to local skills and infrastructure gaps in countries in scope of the Index.

PATENTS & LICENSING RANK 9 SCORE 1.6 PRODUCT DONATIONS RANK 4 SCORE 3.5 Publicly commits to not enforcing patents. Eisai commits to not enforcing patents in Least One of the biggest risers. Eisai has risen from Developed Countries, low-income countries, and 9th position to 4th. The company has increased Low Human Development Countries. its contribution to the lymphatic filariasis (LF) donation programme and is actively involved in No consideration of voluntary licensing. Eisai monitoring and auditing its programmes. does not engage in the non-exclusive voluntary licensing of its patented products, and has no Has one of the largest NTD donation pro- public stance detailing where and how it would grammes. Eisai is one of the companies reach- engage in licensing. ing the largest number of beneficiaries, with its donation programme for LF, carried out in coop- Clear positioning on IP policy. Eisai acknowl- eration with WHO. In this donation programme edges and endorses the Doha Declaration on the Eisai donates diethylcarbamazine citrate (DEC) TRIPS agreement and public health, and makes a and, as of last year, is involved in the delivery of public statement against the use of ever-green- LF test strips. ing tactics to unfairly extend patent life. Complies with external standards. Eisai shares No disclosure of patent status. Eisai does not its donations approach publicly; it also states publish the status of its patents. that “All Product Provisions are carried out in accordance with the WHO Guidelines for Drug Donation”. CAPACITY BUILDING RANK 14 SCORE 1.5 Deploys diethylcarbamazine citrate (DEC) project managers. DEC project managers plan and Building capacity across the value chain, execute LF elimination activities in LF endemic through relatively few initiatives. Eisai builds countries throughout Asia, discussing with gov- capacity in all areas of the pharmaceutical value ernment officials as well as other relevant stake- chain, but has a relatively small number of activ- holders the ways in which to contribute to the ities and does not clearly focus on local needs. early realization of elimination from a local The company disclosed no relevant initiatives to perspective. build capacity outside the value chain. Engages in ad hoc donation programmes in nat- Stronger in strengthening pharmacovigilance ural disasters. Eisai provided emergency sup- systems, with a focus on Asia. Eisai demon- plies after natural disasters, including the 2014 strates that it updates safety labels for its prod- earthquake in China and cyclone Hudhud in India. ucts in countries in scope but does not voluntar-

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 123 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Bayer AG 10 (2014)

Stock Exchange: XFRA • Ticker: BAYN • HQ: Leverkusen, Germany • Employees: 116,800

Ranking by technical area Ranking by strategic pillar Management 3.6

Compliance 1 .7

R&D 2.2

Pricing 2.1

Patents 0.5

Capacity 1 .7 average leader 5 . 0 4 5 0

Donations . . 3.0 . 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Bayer falls two places, out of the top ten. Its modest improve- ple, it is comparatively less transparent than in 2014 about its ments are frequently overshadowed by peers. It has made market influencing activities and compliance efforts. Its equi- some improvements in how it measures progress toward table pricing and product registration performance has not access-related goals, and has time-bound targets tied to its kept pace with peers. Bayer provides limited evidence that R&D commitment to addressing neglected tropical diseases. it takes a pro-access approach to IP management. Bayer is Bayer is comparatively active in strengthening pharmacovigi- engaged in large-scale structured donation programmes for lance systems. Elsewhere, however, it has dropped: for exam- Chagas disease and Human African Trypanosomiasis (HAT).

CHANGE SINCE 2014

• Improves its measurements for tracking per- • Still does not publish its patenting approach. formance toward access targets, but it still lacks clear processes for incorporating local • Is less active in building capacity beyond stakeholders’ perspectives in its access the pharmaceutical value chain and in local initiatives. manufacturing.

• Has equitable pricing strategies for the same • Continues to engage in donation programmes number of products as in 2014. targeting Chagas disease and Human African Trypanosomiasis that cover all endemic • Has improved its accountability for its sales countries. agents’ pricing practices, by providing pricing guidelines for all local sales agents.

OPPORTUNITIES

Broaden access strategy beyond NTDs. engagement is crucial for understanding local would assert patent rights for current and future Bayer can broaden its access strategy beyond needs and for responding with suitable, sustain- products. To complement this approach, Bayer neglected tropical diseases (NTDs) to include able access strategies. can publicly disclose the status of its patents, ischaemic heart disease, diabetes, lower respira- clearly showing where products are on and off tory infections and zoonotic diseases. In addi- Expand application of equitable pricing. Bayer patent, and when patents are due to expire. tion, Bayer can review its pipeline to assess the can apply the intra-country equitable pricing relevance of its R&D projects for people in low- model that it uses for contraceptives to other Join efforts to combat antimicrobial resistance. and middle-income countries. For relevant pro- products (e.g., vector-control products, and for Bayer has three antibiotics on the WHO Model jects, it can put access plans in place before NTDs) and to a range of countries in scope. Essential Medicines List (EML) that are used in products gain approval. clinical practice and are important for low-re- Give a public position on filing for and enforcing source settings. The company can increase Develop an approach to local stakeholder patents. Bayer can develop and disclose a public access to these medicines, while ensuring their engagement. Bayer can develop processes for position on the filing for and enforcement of responsible use. Bayer can join global efforts to selecting and engaging with local stakehold- patents. Thirteen other companies in the Index address antimicrobial resistance, for example by ers to help ensure local needs are addressed have already taken this step. This would help signing the Declaration by the Pharmaceutical, through its R&D, capacity building and access give drug procurement agencies and generic Biotechnology and Diagnostics Industries on management approaches. Local stakeholder manufacturers confidence about where Bayer Combating Antimicrobial Resistance.

124 Access to Medicine Index 2016

Sales in countries in scope Sales by segment (2015) 1 ,1 01 MN

11 ,982 MN 1 5,308 MN

EUR 46,324 MN 1 ,490 MN

6,076 MN 1 0,367 MN

Pharmaceuticals Animal Health Consumer Health Covestro Crop Science Other Segments In scope, has sales Sales by region In scope, has no sales Not in scope 45,000

40,000

MN EUR 35,000

SALES AND OPERATIONS 30,000

25,000

Bayer reorganised its corporate structure in portfolio of seeds and chemical and biological 20,000

2015. With the spin-off of Bayer MaterialScience pest management solutions, including products 1 5,000 (Covestro), its new corporate structure com- for controlling and preventing vector-borne dis- 1 0,000 prises three divisions (Pharmaceuticals, eases. In 2014, the company acquired Merck & 5,000 Consumer Health and Crop Science) and its Co’s Consumer Care business for USD 14.2 bn. 0 Animal Health business unit. Its pharmaceuti- In 2016, Bayer signed a merger agreement with 2011 2012 2013 2014 2015 cals portfolio is focused on: cardiology, wom- Monsanto for USD 66 bn. Bayer has a broad geo- Latin America/Africa/Middle East Asia/Pacic Europe North America en’s healthcare, oncology, haematology, ophthal- graphic presence, covering 102 of the countries mology and radiology. CropScience has a broad in the scope of the Index.

PORTFOLIO AND PIPELINE Products per disease category

5 5 Bayer has a mid-sized portfolio of 34 relevant Regarding its R&D pipeline, Bayer has a new products and a small pipeline of three R&D pro- R&D project to adapt emodepside for oncho- jects that address the needs of people in coun- cerciasis, and is working on two adaptations of 5 6 tries in scope. nifurtimox (Lampit®) for Chagas disease. The 34 adaptations of nifurtimox have been in clini- Its portfolio consists of 27 medicines and con- cal development since at least 2014 (the previ- traceptives, and seven vector-control products ous Index), and clinical development of emodep- 13

(all pesticides). Its vector-control products are side for use in humans began in December 2014. Communicable Non-communicable all registered for the prevention of malaria and/ Bayer’s R&D projects target independently iden- Neglected tropical Multiple categories or dengue. Bayer’s relevant medicine portfolio tified high-priority product gaps. Maternal and neonatal has a strong focus on contraceptive methods. Approximately one third of Bayer’s portfolio tar- The company is also active in infectious diseases, gets women’s health, mainly via contraceptives. hypertensive and ischaemic heart disease.

Pipeline projects First-line treatments and essential medicines

33% 67% 8 15 4 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

In December 2014, Bayer entered a product development partnership with A comparatively high proportion of Bayer’s relevant products are listed on the Drugs for Neglected Diseases initiative to develop emodepside for use in the WHO EML and/or considered first-line treatments. These include the humans. Bayer has committed to providing this product at cost price. contraceptives moxifloxacin (Avelox®) and nifurtimox (Lampit®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD 2

MNH MNH

NCD NCD

Bayer is not developing any innovative products for diseases in scope for use Bayer is adapting its veterinary medicine emodepside to treat onchocerciasis in low- and middle-income countries. in humans. It is also adapting Lampit® for Chagas disease, developing a paediatric formulation and a shorter treatment regimen (to 60 and 30 days).

125 Access to Medicine Index 2016

Bayer AG

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE access to medicine, in relation to access to Diseases initiative to develop emodepside for MANAGEMENT high-quality medicines and products and the use in humans, Bayer has committed to pro- RANK 11 SCORE 3.6 development of sustainable health care systems. viding the product at cost price. However, it In addition, Bayer’s position supports the protec- does not commit to ensuring access-oriented Maintains position despite limited improve- tion of both the international patent system and terms are systematically included in its research ment. Bayer maintains its position, improving the its own intellectual property worldwide. It also partnerships. way it measures progress toward access-related discloses information about its liaison offices targets. However, at the local level, its stake- and their budgets in several cities worldwide. Takes measures to ensure clinical trials are holder engagement activities are executed only Bayer does not publish its policy for preventing conducted ethically. Bayer has policies in place on an ad-hoc basis. conflicts of interest. and takes measures to ensure its in-house and outsourced clinical trials are conducted ethically. Access activities are embedded in business Not transparent about breaches of laws and strategy. Bayer’s activities for improving access codes. Bayer did not provide any information Has system for sharing patient-level data, yet include sustainable and commercially-viable regarding its breaches of codes, regulations and disclosure is incomplete. Bayer’s has a policy of strategies, such as equitable pricing, patient-ac- laws and any consequent settlements. However, making clinical trial results available, but only for cess and assistance programmes, as well as sus- since 2014, the company was found to have approved drugs. This falls short of stakehold- tainable philanthropy and donation programmes. breached codes of conduct five times for cases ers’ expectations that the results of all trials will The company states that providing access is an related to unethical marketing. be disclosed. Nevertheless, the company does essential part of its long-term licence to operate. provide scientific researchers with access to Makes no political contributions. Bayer states patient-level data upon request via clinicalstudy- Centralised performance management system that it does not make any donations or contribu- datarequest.com. in place. Bayer uses a centralised system to col- tions of any kind to political parties, politicians or lect quantitative and qualitative data for tracking candidates for political office. It provides details Does not disclose terms of R&D partnerships. progress regarding access activities. This infor- of financial contributions made to industry asso- Bayer has a general position to not disclose the mation is only partially disclosed. ciations during the period of analysis. terms and conditions of its R&D partnerships. However, access plans for its emodepside col- Ad-hoc engagement with local stakeholders. Has enforcement processes and actively tracks laboration (for onchocerciasis) have been pub- Bayer has a clear and structured approach to compliance. The company has enforcement pro- lished by its partner, the Drugs for Neglected engaging with stakeholders at a regional and cesses and disciplinary measures in place. It does Diseases initiative: this makes the future acces- international level. However, it does not have a not report whether disciplinary measures have sibility of this product for populations in need specific approach for engaging with local stake- been taken during the period of analysis. Bayer more predictable. holders: these engagements are managed on a provides detailed information about its process case-by-case basis. for auditing compliance with its codes of conduct: auditing activities take place following an PRICING, MANUFACTURING & annual audit plan, in addition to unannounced DISTRIBUTION MARKET INFLUENCE & COMPLIANCE ad-hoc audits. In 2015, the company performed RANK 11 SCORE 2.1 RANK 14 SCORE 1.7 198 audits. Drops seven places due to relatively poor per- Drops six positions due to lower transparency. formance in equitable pricing and registration. Bayer’s transparency has fallen on several issues, RESEARCH & DEVELOPMENT Bayer falls out of the top five, into the bottom 10 relative to peers. However, it is one of the com- RANK 12 SCORE 2.2 companies in 2016. This is due to a fall in its per- panies that pledges not to make any political formance in equitable pricing and registration. contributions to political parties, politicians or Maintains mid-ranking position, with no signifi- Disappointingly, Bayer shows no evidence that candidates for political office. cant improvements. Looking at Bayer’s relevant it has implemented the new differential pricing pipeline, it is the same size as in 2014, and the framework that it was piloting in 2014. Low performance in ethical marketing. While company maintained a mid-ranking performance Bayer’s marketing code of conduct is con- in R&D partnerships and IP-sharing. Limited consideration of socio-economic fac- sistent with industry standards, it does not tors when setting prices. Bayer has the same enforce compliance of third-party sales agents. Committed to R&D for NTDs, with clear targets equitable pricing strategies as in 2014: all for Furthermore, Bayer only uses sales targets to set. Bayer commits to developing new products contraceptives. Some (8%) of its products have incentivise sales agents, rather than access- for NTDs. This includes applying for WHO pre- pricing strategies that target almost half of linked incentives. Bayer does not publish infor- qualification for its adaptation of emodepside to the relevant priority countries (disease-spe- mation about marketing activities in countries treat onchocerciasis in humans by 2023. cific sub-sets of countries with a particular need within scope. for access to relevant products). However, its Measures in place to ensure R&D partnerships inter-country equitable pricing strategies only Some transparency on lobbying activities. promote access, but no clear policy. Within take affordability and no other socio-economic Bayer discloses its policy positions related to its collaboration with Drugs for Neglected factors into account.

126 Access to Medicine Index 2016

Pricing guidelines for all sales agents. Bayer CAPACITY BUILDING (Germanin®) for Rhodesian-type HAT. These has provided pricing guidelines to all of its local RANK 13 SCORE 1.7 programmes cover all endemic countries. They sales agents (third party wholesalers and dis- provided treatments for over ten thousand tributors) and has internal controlling systems in Strength in building pharmacovigilance capac- people during the period of analysis. place to monitor the implementation of its pric- ity outweighed by poor performance else- ing policies. where. Bayer demonstrates a relatively strong Committed to supporting WHO for HAT and approach to strengthening pharmacovigilance Chagas disease. Since 2004, Bayer has com- Very low transparency regarding product reg- systems but is comparatively weak in other mitted to supporting WHO in its battle against istrations. Bayer has registration targets for areas, particularly in building capacities beyond Human African Trypanosomiasis (HAT) and a sub-set of relevant diseases in a sub-set of the pharmaceutical value chain and in manu- Chagas disease. Under its current supply agree- low-income countries. But it has not committed facturing. It does not consistently target local ment, Bayer provides a million Lampit® tablets to registering new products within a set time- needs. annually. frame. In practice, Bayer provides no details on where it has filed to register its newest products Strongest area is in pharmacovigilance capac- Close collaboration with WHO for monitoring. for sale. In addition, it does not publish its cri- ity building. Bayer voluntarily shares safety Bayer donates products via WHO pre-selected teria for deciding where or when to register its data with authorities upon request and updates partners, who then report to Bayer. Reporting products. safety labels in relevant countries. It has a intervals are agreed before a donation is carried number of diverse activities for strengthening out. The company conducts external interviews Consistent recall guidelines. Bayer has glob- local pharmacovigilance systems, including an and discussions with partners. ally consistent guidelines for issuing drug recalls innovative initiative in this area (see below). in all countries relevant to the Index where its Makes ad hoc donations for disaster relief and products are available. Bayer does not publish Builds local manufacturing capacity, but only in emergencies. Since 2014, Bayer made 69 sep- whether it has issued recalls. in-house. Bayer makes a general commitment arate ad hoc donations for disaster relief and to build manufacturing capacity in countries in public health emergencies, including following Adaptations of brochures and packaging to scope. The company undertakes a small number the 2016 Nepal earthquake and 2014-2015 Ebola address range of needs. Bayer facilitates the of capacity building activities in a range of rel- epidemic. rational use of its products by providing instruc- evant countries (including Brazil, China, India tions in locally prevalent languages, by using pic- and Indonesia), but these are only directed at tograms for populations with low literacy levels in-house staff. These activities focus on the and by using blister packs to improve product industry standards for Good Manufacturing stability in hot and humid conditions. Practices (GMP).

Weak performance in building health-related PATENTS & LICENSING capacity outside the pharmaceutical value RANK 18 SCORE 0.5 chain. Bayer’s approach to health-related philanthropic projects is relatively weak: it includes Laggard in Patents & Licensing. Bayer drops 10 impact measurement but does not target local positions in this area, to 18th place. There is lim- needs, sustainability, or specific objectives. ited public evidence that it takes an access-ori- Bayer supports capacity building initiatives not ented approach to managing its intellectual directly related to the production and distribu- property. tion of medicines in Kenya and Uganda but does not demonstrate how it mitigates conflicts of Very low transparency regarding patenting interest. strategy. Bayer does not have a public policy for patent filing and enforcement. It does not ▶ Innovation: open-source pharmacovigi- publish the status of its patents in countries in lance tool. In 2015, Bayer co-founded a Special scope. It has an internal policy not to file for pat- Interest Group within the International Society ents in Least Developed Countries. of Pharmacovigilance. The group brings together Southeast Asian regulatory authorities Does not engage in licensing and makes no and international experts to develop and share public commitment to doing so in future. Bayer innovative risk-minimisation methods and tools, does not engage in licensing, nor does it publicly including an open-source tool for developing acknowledge the potential usefulness of licens- customised risk-management guidelines. ing as a strategy for access-oriented product deployment. PRODUCT DONATIONS No clear position regarding the Doha RANK 8 SCORE 3.0 Declaration. Bayer does not publish its position on the Doha Declaration on the TRIPS agree- Bayer remains in 8th place. Bayer has one of the ment and public health. highest numbers of donation programmes for NTDs, all carried out in cooperation with WHO. Absence of competition-related breaches. Bayer was not found to have been the subject of Wide-scale NTD donation programmes. Bayer breaches, fines or judgements relating to com- is engaged in long-term donation programmes petition law during the period of analysis. for NTDs: involving nifurtimox (Lampit®) for Chagas disease and Gambian-type Human African Trypanosomiasis (HAT), and suramin

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 127 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Bristol-Myers Squibb Co. 13 (2014)

Stock Exchange: XNYS • Ticker: BMY • HQ: New York, NY, US • Employees: approx. 25,000

Ranking by technical area Ranking by strategic pillar Management 3.0

Compliance 1 .5

R&D 1 .3

Pricing 1 .9

Patents 3.1

Capacity 1 .3 average leader 0 6 6 1 . Donations . . 1 .9 . 1 2 1 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Bristol-Myers Squibb remains 13th. Although it is a leader does have an access-to-medicine strategy, but it is not clearly in Patents & Licensing and has improved moderately in aligned with corporate strategy. The company consistently other areas, this is outweighed by significant falls in Market engages in licensing, now also for hepatitis C products. It has Influence & Compliance and in R&D. The company was found equitable pricing strategies for the same number of products to have engaged in corrupt practice in China. In R&D, it has as in 2014. Despite a strong approach to philanthropy, it lags a small pipeline of relevant products and a conservative in capacity building, particularly in the areas of pharmacovigi- approach to sharing clinical trial data. Bristol-Myers Squibb lance and supply chain strengthening.

CHANGE SINCE 2014

• Has a better-defined access-to-medicine strat- • Improves its accountability for its sales agents’ • Contributes to a new donation programme egy than in 2014. pricing practices by monitoring prices. aimed at treating patients co-infected with HIV and chronic hepatitis C virus (HCV). • Maintains low transparency about its stake- • Has equitable pricing strategies for the same holder engagement and marketing activities. number of products as in 2014.

• Has breached civil law relating to corruption in • Has agreed pro-access licensing terms for China. daclatasvir (Daklinza®) for hepatitis C.

• Has a significantly smaller pipeline of products • Is less active in building pharmacovigilance for people in low- and middle-income coun- capacity than in 2014. tries (LMICs), less than half the size.

OPPORTUNITIES

Expand access approaches beyond HIV/AIDS Expand packaging adaptations to support within the pharmaceutical value chain: e.g., to and hepatitis C. Bristol-Myers Squibb can con- rational use. Bristol-Myers Squibb can expand strengthen supply chain management and phar- sider expanding its access-oriented product the range of factors (beyond environmental macovigilance systems. deployment approach (e.g., its equitable pric- adaptations) that it takes into account when ing strategy for atazanavir (Reyataz®)) beyond adapting the brochures and packaging of its products for HIV/AIDS and hepatitis C. It can products. For example, it can systematically take explore similar approaches for its ischaemic account of local languages, literacy levels, cul- heart disease and stroke products. tural factors and demographic considerations for children and elderly populations. Link R&D strategy to need in low- and middle-income countries. Bristol-Myers Squibb can Expand strategic capacity building activities clearly link its R&D strategy to high-burden dis- to support local access to medicine. Bristol- eases and access needs in low- and middle-in- Myers Squibb has a strong approach to philan- come countries. The company can also develop thropic capacity building in health-related areas, plans to ensure new products are accessible in beyond the production and supply of medi- these markets soon after they leave the pipeline. cines. It can use its experience here to broaden and strengthen its capacity building activities

128 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015)

USD 16,560 MN

BioPharmaceuticals

In scope, has sales Revenues by region In scope, has no sales Not in scope 20,000 1 8,000 MN USD 1 6,000 SALES AND OPERATIONS 1 4,000 1 2,000 Bristol-Myers Squibb produces biopharmaceu- of the Index. Revenues outside of the US and 1 0,000 ticals for oncology, immuno-oncology, immu- Europe account for approximately one third of 8,000 noscience, cardiovascular, fibrotic diseases, total sales. 6,000 4,000 and genetically defined diseases. In July 2016, 2,000 the company announced the acquisition of 0 Cormorant Pharmaceuticals, a company focused 2011 2012 2013 2014 2015 on the development of therapies for cancer and Rest of world Europe USA Other rare diseases, for USD 520 mn. Bristol-Myers Other revenues include: royalties and alliance-related revenues Squibb has sales in 37 countries within the scope for products not sold by regional commercial organisations.

PORTFOLIO AND PIPELINE Products per disease category

Bristol-Myers Squibb has a small portfolio of 16 hepatitis C virus genotype 3. relevant products, and a small pipeline of five R&D projects that address the needs of people The company’s R&D projects for high-burden 16 9 in countries in scope. diseases are all in early stages of development: 7 it has medicines in phase I testing for HIV/AIDS, The majority of Bristol-Myers Squibb’s portfolio diarrhoeal diseases and ischaemic heart disease, is divided between communicable and non-com- and a discovery-stage project for dengue. municable diseases, with nine and seven medi- Communicable cines respectively. In communicable diseases, the This latter project for dengue is its only project Non-communicable company is mainly active in HIV/AIDS and viral that clearly targets a high-priority product gap Multiple categories hepatitis. In 2015, Bristol-Meyers Squibb gained with low commercial incentive. None of its rele- Its portfolio targets communicable and non-com- market approval from the FDA for daclatasvir vant projects have been shown to have moved to municable diseases, namely liver, cardiovascular (Daklinza®) for the treatment of chronic HCV a new stage of development since 2014. diseases and mental health conditions.

Pipeline projects First-line treatments and essential medicines

1 00% 7 3 4 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

None of Bristol-Myers Squibb’s relevant pipeline projects are being con- Of the 16 medicines in Bristol-Myers Squibb’s portfolio, 12 are listed on the ducted through R&D partnerships with third-parties. WHO EML and/or are first-line treatments: e.g., daclatasvir (Daklinza®), entecavir (Baraclude®), and efavirenz (Sustiva®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 CD

NTD NTD

MNH MNH

NCD 2 NCD

Bristol-Myers Squibb’s pipeline for high-burden diseases focuses entirely on Bristol-Myers Squibb supports paediatric R&D via its investigator-sponsored innovative medicines, including a PD-L1 inhibitor for HIV/AIDS, a TYK2 inhibi- research programme. It is adapting products for diseases in scope, but did tor for diarrhoeal diseases and two medicines for ischaemic heart disease. not provide evidence of how they meet needs of people in LMICs.

129 Access to Medicine Index 2016

Bristol-Myers Squibb Co.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE and marketing practices in China. This breach that its in-house and outsourced clinical trials MANAGEMENT led to a fine of approximately USD 14.7 mn in are conducted ethically. RANK 15 SCORE 3.0 disgorgement, penalties and interest. Poor system for sharing clinical trial results. Rises two positions with a clearer access Below average in governance of ethical mar- Bristol-Myers Squibb does not clearly commit strategy. Bristol-Myers Squibb moves up two keting. Bristol-Myers Squibb contractually to sharing its clinical trial results within a speci- places from 17th. It has provided a clearer defi- enforces the application of its marketing code to fied timeframe. The company has a mechanism nition of its access strategy and improved in third parties. Nevertheless, it only uses sales tar- for third parties to request patient-level data: an the way it measures performance. However, the gets to drive employee performance. It does not internal committee approves requests before transparency of its stakeholder engagement publish information about marketing activities in they are sent to an independent review commit- activities is low. countries within scope. tee at Duke University.

Comprehensive access strategy. Bristol-Myers Policy positions available online. Bristol-Myers Collaborates through intellectual property Squibb’s access-to-medicine strategy focuses Squibb discloses its policy positions related sharing. While the company has no collabora- on nine areas: (1) Commitment to Patients; (2) to access to medicine on its website, includ- tions in its relevant pipeline, it has provided the Access Management; (3) R&D; (4) Partnering ing a statement that it does not make any politi- Drugs for Neglected Diseases Initiative, Institut with Patients and Physicians; (5) Clinical Trials; cal contributions outside of the USA. It only dis- Pasteur Korea and the University of Dundee (6) Improving Health Care Infrastructure and closes some of the financial contributions it with access to its compound libraries. Its aim is Practices; (7) Patents, Licensing and Technology makes to the trade associations it has joined. to advance the development of medicines for Transfer; (8) Product Quality and Safety; and (9) Chagas disease and leishmaniasis. This informa- Drug Donations and Philanthropic Efforts. Audit system in place, with evidence of opera- tion is publicly disclosed. tionalisation. Audits are conducted once every Has access initiatives, but no explicit align- two to three years. Where a Qualified Opinion ment with corporate strategy. Bristol-Myers report has been issued, audits are conducted PRICING, MANUFACTURING & Squibb has developed specific programmes annually until the issue is resolved. Audits may DISTRIBUTION and partnerships to help facilitate and manage include local third parties. In total, the audit team RANK 12 SCORE 1.9 access-to-medicine activities. Nevertheless, conducts approximately 50 audits per year. the company does not make clear how its No change in ranking. Bristol-Myers Squibb access-to-medicine strategy aligns with its cor- remains in 12th position. It has the same number porate strategy. RESEARCH & DEVELOPMENT of products with equitable pricing strategies as RANK 20 SCORE 1.3 in 2014 (although not the same products). Its Accountable through high transparency on strategies are equally distributed between prod- access measurements. The company is trans- Falls to bottom of industry with big drop in ucts for HIV/AIDS and for hepatitis C. parent with regards to its commitments, targets pipeline projects. Bristol-Myers Squibb’s perfor- and performance information related to access. mance has fallen since 2014. It has a significantly Equitable pricing that targets majority of It also has a centralised performance manage- smaller pipeline of relevant innovative products high-burden countries for some products. 27% ment system where progress is regularly tracked and is not adapting products or technologies for of Bristol-Myers Squibb’s products have equi- and monitored. people in low- and middle-income countries. It is table pricing strategies that, on average, target not engaged in any relevant R&D partnerships. more than half of the corresponding priority Low transparency on stakeholder engage- countries (disease-specific sub-sets of coun- ment. Bristol-Myers Squibb has a clear approach R&D commitments not clearly linked to low- tries with a particular need for access to rele- to stakeholder engagement, but does not pub- and middle-income country needs. In its vant products). This is a relatively high level of lish details of this process or the outcomes of its Sustainability 2020 goals, Bristol-Myers Squibb needs-targeting. Across its inter-country equi- activities. In addition, the company provides no commits to focusing its R&D on medicines and table pricing strategies, the socio-economic fac- evidence of how subsidiaries engage with stake- on areas of high unmet medical need. However, tors Bristol-Myers Squibb most commonly con- holders at the local level. the company’s commitments are not clearly siders are disease burden and level of economic linked to the needs of people in low- and mid- development. In its intra-country equitable pric- dle-income countries. ing strategies, it only considers disease burden/ MARKET INFLUENCE & COMPLIANCE prevalence and the government’s commitment RANK 16 SCORE 1.5 No policy for basing R&D partnerships on to treating patients. access-oriented terms. The company has no Biggest faller in part due to corruption in policy to ensure access-oriented terms are sys- Monitors pricing, but has no pricing guide- China. Bristol-Myers Squibb dropped from 3rd tematically included in research partnerships. lines. Bristol-Myers Squibb does not have pric- to 16th position, due in part to a settlement ing guidelines for sales agents but it does moni- related to corruption in China. Bristol-Myers Takes measures to ensure clinical trials are tor prices in all countries. Squibb was found to have breached the US conducted ethically. Bristol-Myers Squibb has Foreign Corrupt Practices Act, through its sales policies in place and takes measures to ensure

130 Access to Medicine Index 2016

No specific registration targets; limited regis- CAPACITY BUILDING PRODUCT DONATIONS tration in practice. Bristol-Myers Squibb does RANK 16 SCORE 1.3 RANK 14 SCORE 1.9 not have disease-specific registration targets. It does not publish where its products are regis- Capacity building activities still limited overall. Rises three places. Bristol-Myers Squibb moved tered, or its criteria for deciding when and where Bristol-Myers Squibb demonstrates a relatively from 17th to 14th position. It is launching its first to file for registration. The company has filed to strong approach to capacity building outside the structured donation programme for a disease in register 70% of its newest products in just a few pharmaceutical value chain, including address- scope: for patients co-infected with the hepatitis priority countries (disease-specific sub-sets of ing local needs in countries in scope. However, C virus (HCV) and HIV. countries with a particular need for access to the company undertakes limited activities for relevant products). On average, these products all areas within the value chain measured by the Complies with WHO guidelines for donations. were launched 10 years ago. Index and does not clearly target skills gaps. Bristol-Myers Squibb has standard operating procedures in place for both domestic and inter- Consistent guidelines for issuing recalls. Strong philanthropic approach. Through the national product donations. It complies with Bristol-Myers Squibb has globally consistent Bristol-Myers Squibb Foundation, the compa- WHO and PQMD guidelines. guidelines for issuing drug recalls in all coun- ny’s approach to philanthropic activities is very tries relevant to the Index where its products are strong: it targets local health needs, is aimed at Monitoring mainly the responsibility of part- available. Bristol-Myers Squibb has not recalled promoting health equity for vulnerable popula- ners. Bristol-Myers Squibb’s donations are mon- a product for a relevant disease in a country in tions, at delivering long-term improvements and itored by the humanitarian aid organisations it scope during the period of analysis. requires monitoring and evaluation of pre-de- works with. These organisations are responsible fined objectives. The Foundation’s activities for monitoring in-country partners and for send- Limited steps taken to facilitate rational include building health workforce capacity, and ing donation reports to Bristol-Myers Squibb. In use. Bristol-Myers Squibb uses blister packs integrating medical and community-based sup- some regions, Bristol-Myers Squibb conducts to address stability needs, but does not adapt port services. on-site audits. its brochures or packaging materials to take account of language, literacy, cultural or demo- Active in building capacity outside the value Makes ad hoc donations for disaster relief and graphic needs. chain. Bristol-Myers Squibb discloses a number in emergencies. Bristol-Myers Squibb usually of relevant initiatives to build capacities outside makes ad hoc donations via its long-term part- the pharmaceutical value chain focusing on HIV/ ners: AmeriCares, Project Hope, Direct Relief PATENTS & LICENSING AIDS, viral hepatitis and diabetes. It undertakes International and International Health Partners. RANK 3 SCORE 3.1 activities in a range of countries including in Since 2014, it has donated products for disaster sub-Saharan Africa, China, India and Peru. relief in response to the 2016 Nepal earthquake. One of the leaders in Patents & Licensing. Bristol-Myers Squibb holds 3rd position: it Below average in R&D capacity building. ▶ Innovation: donations for hepatitis C. Bristol- has consistently taken steps to manage its IP Bristol-Myers Squibb has an R&D capacity build- Myers Squibb is launching an innovative struc- responsibly, and has demonstrated its willing- ing partnership with Tsinghua University in tured donation programme aimed at curing hep- ness to apply proven licensing models beyond China, focusing on novel oncology and immu- atitis C in patients co-infected with HIV and the the HIV/AIDS area. no-science targets, as well as structural biology hepatitis C virus. It works in cooperation with research to support future drug discovery. It is Americares, Clinton Health Access Initiative Policy of patent non-enforcement on anti-ret- not clear how the company targets local skills (CHAI) and Duke University. The company will be rovirals (ARVs). Bristol-Myers Squibb has a gaps through this partnership. donating free courses of daclatasvir (Daklinza®) public policy of not enforcing the patent rights across Ethiopia, Indonesia, Myanmar, Nigeria, it holds on its portfolio of HIV/AIDS medicines in Builds manufacturing capacity through the Rwanda and Vietnam. sub-Saharan Africa. MPP. Bristol-Myers Squibb commits to assessing needs and building capacity in relevant coun- Half of products available for licensing. Bristol- tries for in-house manufacturers only. In prac- Myers Squibb makes half of its patented port- tice, the company undertakes a relatively small folio of relevant products available for licensing. number of capacity building activities, through The licences it agrees (via the Medicines Patent the Medicines Patent Pool, including technol- Pool) are transparent, access-oriented and ogy transfers for HIV/AIDS medicine atazanavir include a comparatively high number of middle (Reyataz®) in Brazil and India. income countries with high hepatitis C and HIV/ AIDS prevalence. Weak performance in strengthening supply chains and pharmacovigilance systems. Bristol- Low transparency on trade agreements and Myers Squibb did not disclose relevant capac- patent statuses. The company does not pub- ity building activities or information sharing (e.g., lish its position on the Doha Declaration on the voluntary sharing of safety data with authorities) TRIPS agreement and public health, and does to support the strengthening of supply chains not publish the status of its patents. and pharmacovigilance systems in countries in scope during the period of analysis. ▶ In novation: licensing outside of HIV/AIDS. Bristol-Myers Squibb has made the significant step of applying licensing to products outside of the HIV/AIDS space. Via the Medicines Patent Pool, it has now agreed licences for hepatitis C medicine daclatasvir (Daklinza®).

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 131 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Pfizer Inc. 16 (2014)

Stock Exchange: XNYS • Ticker: PFE • HQ: New York, NY, US • Employees: 97,900

Ranking by technical area Ranking by strategic pillar Management 3.4

Compliance 0.8

R&D 1 .9

Pricing 1 .6

Patents 1 .0

Capacity 1 .8 average leader 8 1 0 0 . . . Donations 3.5 . 0 2 2 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Pfizer rises two places to 14th, having improved in specific ing. However, in access management, it does not have per- areas. It moved a high proportion of projects along its pipe- formance incentives linked to its access-related targets, and line, and provides stronger evidence that it implements its the transparency of its stakeholder engagement activities is equitable pricing strategies and monitors prices and mark limited. It performs poorly in all areas of Market Influence & ups. It has two long-standing donation programmes with wide Compliance, and was found in breach of corruption laws in a reach. It is relatively strong in strengthening supply chains, country in scope. Its patenting strategy lacks transparency. and has several innovative initiatives related to health financ-

CHANGE SINCE 2014

• Has a new strategy for its Global Established • Moved a substantial portion of its R&D pro- • Has still not set targets for registering prod- Products Business Unit, which evaluates jects along the pipeline. ucts for high-burden diseases. assets and capabilities to address leading causes of high-burden diseases in low-and • Signed the Declaration by the Pharmaceutical, • Provides price and volume-of-sales middle-income countries. Biotechnology and Diagnostics Industries information. on Combating Antimicrobial Resistance in • Has improved its accountability for its sales January 2016. • Still has not published a policy on where and agents’ pricing practices. when it will file for or enforce patent rights. • Has implemented equitable pricing for Sayana • Has been found in breach of laws and codes of Press®, targeting 69 countries with a price of • Has made employees available to the USAID/ conduct multiple times since 2014. USD 1 per dose. Indonesia Expanding Maternal and Neonatal Survival project in partnership with NGO RTI • Has implemented a drug recall policy. International.

OPPORTUNITIES

Expand its access strategy to cover more rel- clearly show where products are on and off Ensure access to relevant products gained evant products. Pfizer can expand its access patent, and when they are due to expire. through Hospira acquisition. Pfizer can imple- strategies to cover more products for diseases ment access strategies for new and exist- in scope, for example, by piloting a variety of Set access provisions for pipeline projects. ing products gained through its acquisition of healthcare interventions. Pfizer can expand equi- Pfizer can make plans for the accessibility of Hospira, particularly for products that are impor- table pricing to more products for high-burden future products early in the product develop- tant in hospital and emergency situations. diseases, and implement intra-country equitable ment process, particularly for unique products pricing in markets with high inequality and high that fill key product gaps in low- and middle-in- Ensure access to products on the WHO EML. out-of-pocket spending on healthcare. come countries (e.g., for its pre-clinical Group B Pfizer has one of the largest numbers of prod- streptococcus vaccine candidate). ucts on the WHO Model Essential Medicines List Publish a position on where it will file for or (EML). It can evaluate access barriers to these enforce patents. Pfizer can develop and disclose Expand anonymity provisions for misconduct products in all low- and middle-income coun- a public position on how it plans to file for and reporting. Pfizer can expand its anonymity guar- tries. It can ensure their availability and afforda- enforce its patents. This would give drug pro- antee for whistle-blowers, which currently only bility, aligning with demand and the availability of curement agencies and generic medicine man- covers employees in the USA, to all employees in alternative products in specific countries. ufacturers greater confidence to act. In tandem, all countries. This would increase the chance of Pfizer can publish the status of its patents, to misconduct being reported and tackled.

132 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015) 506 MN

1 3,954 MN

21 ,587 MN USD 48,850 MN

1 2,803 MN

Global Innovative Pharmaceutical Global Vaccines, Oncology and Consumer Healthcare Global Established Pharmaceutical Other business activities In scope, has sales Revenues by geographic area In scope, has no sales Not in scope 65,000 60,000 55,000 MN USD 50,000 SALES AND OPERATIONS 45,000 40,000 35,000 Pfizer operates through four segments: Global Shionogi focused solely on HIV/AIDS medicines. 30,000 Innovative Pharmaceutical; Global Vaccines, In September 2015, the company completed 25,000 20,000 Oncology and Consumer Healthcare; and the acquisition of Hospira, a provider of inject- 1 5,000 Global Established Pharmaceutical. The com- able medicines, infusion technologies and bio- 1 0,000 pany’s core therapeutic areas are: cardiovascu- similars for approximately USD 17 bn. The com- 5,000 0 lar and metabolic disease, immunology, inflam- pany has sales in 86 countries within the scope 2011 2012 2013 2014 2015 mation, neuroscience, oncology, vaccines, and of the Index. Emerging markets Developed rest of world Developed Europe USA pain and sensory. Pfizer holds a 12.6% stake in ViiV Healthcare, a joint venture with GSK and

PORTFOLIO AND PIPELINE Products per disease category

17 Pfizer has a large portfolio of 98 relevant prod- diseases, three non-communicable diseases 26 ucts and a small pipeline of 10 R&D projects (NCDs) and two maternal and neonatal health that address the needs of people in countries in conditions. 98 scope. 2 Compared to other companies, Pfizer has moved 4 Its products consist of medicines and vaccines, a large proportion of the products in its pipe- and cover a wide range of high-burden diseases: line from one stage of development to another. 49 including respiratory diseases, meningitis, dia- This includes gaining approval for Trumenba®, Communicable Non-communicable betes, epilepsy, HIV/AIDS and hypertensive and its meningococcal group B vaccine in October Neglected tropical Multiple categories ischaemic heart disease. 2014. A low proportion of Pfizer’s R&D projects Maternal and neonatal target high-priority product gaps with low com- Pfizer’s portfolio targets all disease categories and The company has medicines and vaccines in mercial incentive. covers 32 diseases in scope. development that target four communicable

Pipeline projects First-line treatments and essential medicines

1 0% 1 0% 80% 29 9 23 37 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Pfizer is working via ViiV Healthcare on an HIV/AIDS integrase inhibitor, 62% of Pfizer’s medicines and vaccines are on the WHO EML and/or are which is currently in phase II of clinical development. first-line treatments: e.g., its pneumococcal 13-valent vaccine (Prevnar 13®), ACWY meningococcal vaccine (Mencevax®) and atorvastatin (Lipitor®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD 3 3 NCD

Pfizer’s innovative pipeline includes medicines for HIV/AIDS, type 2 dia- Pfizer gained approval for self-injection of its contraceptive Sayana Press® betes, schizophrenia and ischaemic heart disease, as well as vaccines for and a multi-dose preparation of Prevnar 13®, a conjugate pneumococcal Clostridium difficile, MRSA and group B streptococcus. vaccine. Both aim to improve access in relevant countries.

133 Access to Medicine Index 2016

Pfizer Inc.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE MARKET INFLUENCE & COMPLIANCE rank is also explained by drops in the perfor- MANAGEMENT RANK 19 SCORE 0.8 mance of some of its peers. RANK 13 SCORE 3.4 Poor performance across all areas. Pfizer drops R&D commitments not clearly linked to need. Mixed performance in this area. Pfizer’s ranking two positions in this area, to rank last. The com- Pfizer commits to developing medicines and remains the same here as in 2014. The company pany performs poorly overall, across all themes vaccines for multiple relevant diseases, and rec- has a mix of strengths and weaknesses: it is test- of analysis. It was found to have breached ognises the need for collaborative R&D to sup- ing a way of optimising access to its established anti-corruption laws in a country in scope port health issues that disproportionately affect products portfolio, but the transparency of its (China). low- and middle-income countries. It is unclear, stakeholder engagement is low. It is one of the however, whether the company’s commitments few companies with no access-related financial Ethical marketing practices lag behind indus- are informed by a public health rationale. incentives for employees. try average. Pfizer has a marketing code, which also applies to its third parties. It states that No policy for basing R&D collaborations on Access strategy aligns with corporate strategy. it does not only use sales targets to incentiv- pro-access terms. The company does not Pfizer’s access strategy includes a detailed set of ise employees, yet provides no further details. commit to ensuring access-oriented terms objectives and a business rationale: the company Plus, the company does not disclose any infor- (such as supply commitments or affordable pric- considers its access programmes to be impor- mation about its marketing activities in countries ing strategies) are systematically included in its tant for building long-term value for investors by in scope. It only provides anonymity to whis- research partnerships. strengthening reputation and creating opportu- tle-blowers based in the US. nities in new markets and population segments. High transparency around clinical trials. The Low transparency on lobbying activities. Pfizer company upholds high standards of clinical trial Performance management system, but no discloses its policy positions on access to med- data transparency, including providing scien- access-related incentives. Pfizer’s newly estab- icine, in particular, those related to Universal tific researchers with access to patient-level lished Global Health & Value department is Health Coverage, Intellectual Property, and the data upon request via the company’s own portal. charged with monitoring and measuring pro- Trade-Related Aspects of Intellectual Property Requests are first reviewed by an internal com- gress towards its access targets. However, the Rights and Free Trade agreements. However, mittee, and any denied or partially approved company does not have dedicated financial it does not provide information on the politi- applications are then forwarded to an independ- incentive structures in place to reward employ- cal contributions it makes in countries in scope. ent review panel. ees when they achieve access-related targets. The company discloses its memberships of industry and trade associations, without dis- ▶ Innovation: signing on to combat antimicro- Transparency of stakeholder engagement is closing whether it provides financial support. bial resistance. Pfizer signed the Declaration limited. Although Pfizer does have a stakeholder Furthermore, Pfizer does not provide informa- by the Pharmaceutical, Biotechnology engagement strategy, it publishes only general tion about a conflict of interest policy. and Diagnostics Industries on Combating information about its related activities. It does Antimicrobial Resistance in January 2016, not specify how local offices engage with their Multiple breaches of criminal, civil law and thereby committing to investing in R&D that stakeholders. codes of conduct. Pfizer has been the subject of aims to meet public health needs. multiple settlements since 2014. It was handed ▶ Innovation: approach to established products a fine of approximately USD 468,000 for cor- Sharing intellectual property across several dis- portfolio. To underpin the strategy of its Global ruption involving four major pharmacies and the eases. In 2015, Pfizer entered an agreement via Established Products Business Unit, Pfizer has improper promotion of a medicine in China. WIPO Re:Search to share a compound for test- evaluated its assets and capabilities for addressing against liver-stage malaria. Pfizer is also ing the leading causes of the highest-burden dis- Limited performance in compliance. Pfizer has funding, providing drugs for and sponsoring eases in low-and middle-income countries. enforcement processes and disciplinary meas- studies into TB, through its Investigator-Initiated ures in place to safeguard against misconduct, Research Program. ▶ Best Practice: Global Health Fellowships. but provides no information about whether Pfizer has a volunteering programme in which these processes have been applied. The com- ▶ Best practice: Moving projects along the employees are able to engage with and sup- pany also conducts regular audits in all countries pipeline. Compared to other companies, Pfizer port local stakeholders. For example, employ- with operations, but not of all third parties. has moved a high proportion of R&D projects to ees are supporting the USAID/Indonesia the next development stage since 2014. Expanding Maternal and Neonatal Survival project on its engagement with civil society groups. RESEARCH & DEVELOPMENT The Fellowship programme focuses on improv- RANK 14 SCORE 1.9 PRICING, MANUFACTURING & ing the access, quality and efficiency of health DISTRIBUTION services in under-served communities. It is also Rises three places in R&D. Since 2014, Pfizer RANK 15 SCORE 1.6 used by Pfizer to gain insight into local stake- has doubled the size of its relevant pipeline, holder needs. moving a substantial proportion of its projects Pfizer rises one place, remains in middle group. along its pipeline in the same period. Its higher Pfizer moves up one place from 16th. Pfizer

134 Access to Medicine Index 2016

has, for the first time, provided price point and Lack of transparency in patenting strategy. ▶ Innovation: M-Tiba mobile wallet. Since 2015, volume-of-sales information to the Index to Pfizer does not have a public policy available Pfizer has partnered with PharmAccess, CarePay demonstrate that it implements its pricing strat- that sets out its approach to filing for or enforc- and Safaricom to support the development and egies. It has now also provided details of a global ing patents in low- and middle-income countries. implementation of M-Tiba®, a mobile wallet policy for drug recalls. Neither does it publish the status of its patents. dedicated to healthcare savings and payments in Kenya. A trial in informal settlements in Nairobi Room for improvement in equitable pric- Makes ARV patent available for licensing on showed positive results: M-Tiba has now been ing. Pfizer has not expanded equitable pric- pro-access terms. Pfizer (as ViiV Healthcare) launched more widely. ing to more products since 2014. The compa- has made the patent it holds on maraviroc ny’s equitable pricing covers a wide range of dis- (Selzentry®) available for non-exclusive volun- ▶ Innovation: StartHealth investment pro- eases, including epilepsy, hypertensive heart dis- tary licensing. gramme. Pfizer is collaborating with PATH and ease, soil-transmitted helminthiasis and TB. Only other partners to support StartHealth, an invest- some (20%) of its products have pricing strate- Limited public position on Doha Declaration. ment programme supporting health technol- gies that target priority countries (disease-spe- Pfizer publicly supports the Doha Declaration ogy start-ups in India. The programme will coor- cific sub-sets of countries with a particular need on the TRIPS agreement and public health dinate technical support, grant funding and cap- for access to relevant products). Together, these but limits its support of compulsory licens- ital investment for local entrepreneurs creat- strategies reach only some (22%) of the corre- ing to extraordinary circumstances or extreme ing affordable and effective health products and sponding priority countries. The company con- emergency. services. siders affordability when setting inter-country pricing tiers, overlooking other socio-economic factors. It has not implemented intra-country CAPACITY BUILDING PRODUCT DONATIONS equitable pricing strategies. RANK 9 SCORE 1.8 RANK 5 SCORE 3.5

Monitors prices but does not set pricing guide- Stronger in building supply chain management Rises to joint 5th place. Pfizer is one of the big- lines. Pfizer monitors prices via an internal elec- capacity, weaker in pharmacovigilance. Pfizer gest risers, moving from 14th to joint 5th place. tronic system that tracks ex-factory prices, net demonstrates a relatively strong approach to The company’s product donations are compar- prices, wholesale prices and public prices. The strengthening supply chains, and innovative ini- atively large in scale and scope in Index coun- degree and frequency of monitoring differ per tiatives related to health financing. However, the tries. It is engaged in two structured donation country depending on local laws and policies. company’s performance in other areas is com- programmes, covering trachoma and HIV/AIDS- paratively weak, particularly in pharmacovigi- related fungal infections. Mixed registration performance. Pfizer does not lance, and it does not consistently target local provide evidence of having disease-specific tar- needs. Continues efforts to eliminate trachoma. Pfizer gets for registering its products where they are supports WHO’s efforts to eliminate trachoma. needed. It does not publish its criteria for decid- Strengthening supply chains with a focus on During the period of analysis, Pfizer donated 128 ing where to register products, or whether and identifying falsified medicines. Pfizer is actively million treatments of azithromycin (Zithromax®) where products are registered. The company building capacity in supply chain management through the International Trachoma Initiative has filed to register more than half (60%) of its in countries in scope, including through partner- (ITI). In November 2015, it donated the 500 newest products in a few priority countries (dis- ships and information sharing. For example, to millionth dose in its structured donation ease-specific sub-sets of countries with a par- help address falsified medicines moving from programme. ticular need for access to relevant products). Pakistan to the Philippines, the company jointly Most of these products were first launched 10 to trained authorities from the two countries. Complies with external standards. Pfizer did 20 years ago. not disclose an overarching donations policy. It Building R&D capacity, but not clear if local does state that its donations adhere to WHO Consistent recall guidelines. Pfizer has glob- needs are targeted. Pfizer has one relevant and PQMD guidelines. ally consistent guidelines for issuing drug recalls partnership with a local research organisa- in all countries relevant to the Index where its tion to build R&D capacity in countries in scope: Monitoring is mainly the responsibility of part- products are available. Pfizer does not publish with the Indian Institute of Technology, Delhi. ners. Pfizer donates through humanitarian details on drug recalls. However, it is not clear how the company targets aid organisations. These organisations moni- local skills gaps through this partnership. tor its in-country partners and are responsible Does not facilitate rational use through pack- for sending reports of the ad hoc donation pro- aging adaptations. Pfizer does not provide evi- Weak performance in strengthening pharma- grammes to Pfizer. Pfizer has donation agree- dence that it adapts its brochures or packaging covigilance systems. Pfizer voluntarily shares ments with all NGOs that receive products from materials to address the language, literacy, envi- safety data with authorities in countries in scope the company. For its structured donation pro- ronmental, cultural or demographic needs of but does not demonstrate routine safety label grammes for trachoma, countries are required people living in countries in scope. updates or relevant activities to build pharma- to submit an annual application to receive covigilance capacity in the period of analysis. donations.

PATENTS & LICENSING Supporting maternal and neonatal survival in Involved in humanitarian emergency-relief RANK 14 SCORE 1.0 Indonesia. Through its Global Health Fellowships efforts. Since 2014, Pfizer has been donating volunteering programme, Pfizer contributed Prevnar 13®, a pneumococcal 13-valent conju- Limited clarity leads to a low rank. Pfizer still expertise to the USAID/Indonesia Expanding gate vaccine, in humanitarian crises. does not publish its approach to patent filing Maternal and Neonatal Survival project in part- and enforcement, or to the Doha Declaration on nership with NGO RTI International in 2014- the TRIPS agreement and public health. While it 15. The project aims to improve the quality of takes a comparatively open approach to licens- emergency obstetric and neonatal care ser- ing, this lack of transparency contributes to its vices, to reduce maternal and newborn deaths low position. in Indonesia.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 135 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Takeda Pharmaceutical Co., Ltd. 20 (2014)

Stock Exchange: XTKS • Ticker: 4502 • HQ: Osaka, Japan • Employees: 31,168 (consolidated)

Ranking by technical area Ranking by strategic pillar

Management 3.0

Compliance 1 .8

R&D 2.8

Pricing 1 .3

Patents 0.6

Capacity 1 .8 average leader 0 4 6 0 . 1 .7 . . Donations . 0 2 1 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Takeda is one of the biggest risers, moving 5 places to 15th. implemented equitable pricing strategies that differentiate Its access-to-medicine strategy aligns with its overall busi- between countries. It newly commits not to file for or enforce ness strategy. This is not yet coupled with a solid compliance patents in sub-Saharan Africa. It has not yet established system, as evidenced by cases of misconduct settled since a structured product donation programme. It improves in 2014. Takeda has strong R&D commitments related to access capacity building, particularly for R&D and pharmacovigilance. to medicine, and shares IP for leishmaniasis and Chagas disease. It also improves in pricing, where Takeda has newly

CHANGE SINCE 2014

• Has launched new access strategy supported • Implements relevant inter-country equitable • Has improved its auditing processes related to by a centralised dashboard for tracking pro- pricing strategies for the first time. its ad hoc product donations, which it applies gress and performance. to a limited selection of partners. • Does not provide price or volume-of-sales • Has been handed the largest fine following a information. • Has supported local health services in Haiti case of misconduct of all companies in scope through Access to Health Project Haiti, in part- during the period of analysis. • Improves its accountability for its sales agents’ nership with Partners in Health and other pricing practices. stakeholders. • Has improved its measures for ensuring clinical trials are conducted ethically and is more • Newly commits to not filing for patents and transparent with clinical trial data. to abandoning patents held in sub-Saharan Africa.

OPPORTUNITIES

Engage with stakeholders to act on commit- targets for products targeting diseases with high for hypertensive heart disease. The company ment to voluntary licensing. Takeda has a new burdens in low- and middle-income countries can also implement intra-country equitable pric- commitment to considering the use of volun- and plans to ensure affordable pricing. ing strategies in countries with high levels of ine- tary licensing as a mechanism for addressing the quality and/or high out-of-pocket spending. affordability and supply of on-patent and pipe- Ensure the long-term sustainability of its new line products in lower-middle income countries. access strategy. Takeda can strengthen the link Join efforts to combat antimicrobial resist- It can actively seek potential partners (including between access and its corporate strategies to ance. Takeda has seven antibiotics that are on manufacturers, where relevant) to explore viable go beyond a philanthropic approach to improv- the WHO Model Essential Medicines List (EML), opportunities for turning this commitment into ing access to medicine. This would ensure the are used in clinical practice and are important action. long-term sustainability of its strategy, as the for low-resource settings. The company can company moves ahead with an increased focus take action to increase access to these med- Implement access plans as company expands on access. icines, while ensuring their responsible use. its focus. As Takeda expands its pipeline and the Takeda can join global efforts to address anti- geographic scope of its pharmaceutical busi- Expand use of equitable pricing strategies. microbial re-sistance, for example by sign- ness, it can implement detailed plans for ensur- Takeda can expand its commitment to equita- ing the Declaration by the Pharmaceutical, ing successful new products are accessible upon ble pricing, as well as its use, to more products, Biotechnology and Diagnostics Industries on market approval. This can include registration e.g., azilsartan (Azilva®), a first-line treatment Combating Antimicrobial Resistance.

136 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015) 78,61 3 MN 80,094 MN

JPY 1,807,378 MN

1 ,648,671 MN

Ethical Drugs Consumer Healthcare Other In scope, has sales Revenues by segments In scope, has no sales Not in scope 1 ,800,000 1 ,600,000

MN JPY 1 ,400,000

SALES AND OPERATIONS 1 ,200,000

1 ,000,000

Takeda’s core therapeutic areas are: gastrointes- Pharmaceutical Industries. This step is intended 800,000 tinal diseases, oncology, central nervous system to allow Takeda to focus on developing inno- 600,000 diseases and cardiovascular and metabolic dis- vative medicines, as this separate entity will 400,000 eases. The company’s Ethical Drug Division market the company’s off-patent medicines and 200,000 accounts for its largest share of sales, derived focus on the generic medicine market. Takeda 0 from its small presence in the consumer health- has sales in 29 countries within the scope of the 2011* 2012* 2013* 2014 2015 care market. In April 2016, Takeda announced Index. Rest of world Russia/CIS Latin America Asia Japan Europe/Canada USA the establishment of Teva Takeda Yakuhin

Ltd, a joint venture between Takeda and Teva *Due to changes in company reporting practices, numbers from 2011, 2012, 2013 and 2014 are incomparable. PORTFOLIO AND PIPELINE Products per disease category 2 1 9 Takeda has a mid-sized portfolio of 50 products Takeda’s pipeline is approximately double the for diseases in scope and a mid-sized pipeline size it was in 2014. It has joined the new NTD of 24 R&D projects that address the needs of Drug Discovery Booster, and several of its ear- people in low- and middle-income countries. ly-stage innovative projects for NCDs have quali- 50 fied for analysis for the first time in 2016. Takeda’s relevant portfolio has a strong focus Takeda has moved several products along on non-communicable diseases (NCDs), cover- its pipeline since 2014, and received regula- 38 ing diabetes, hypertensive and ischaemic heart tory approval in Japan for trelagliptin succinate Communicable Non-communicable disease and unipolar depressive disorders. The (Zafatek®) for type 2 diabetes. Takeda is con- Maternal and neonatal Multiple categories company is developing medicines and vac- ducting multiple projects targeting high-priority cines for seven communicable diseases, three product gaps with low commercial incentive. Most medicines in Takeda’s portfolio are for neglected tropical diseases (NTDs) and five NCDs. It also has several broad-spectrum antibiot- NCDs. ics for diseases in scope.

Pipeline projects First-line treatments and essential medicines50

33% 4% 63% 17 6 12 15 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Takeda participates in several R&D projects with the Global Health A comparatively high proportion of Takeda’s relevant products are listed on Innovative Technology (GHIT) Fund that require products be made available the WHO EML and/or as first-line treatments: e.g., azilsartan (Azilva®) and in relevant countries at reasonable prices or are licensed out royalty-free. candesartan for hypertensive heart disease.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 3 3 CD

NTD 3 NTD

MNH MNH

NCD 2 6 2 NCD

Takeda’s relevant pipeline concentrates on innovative medicines and vac- Takeda is adapting one product, for malaria, which targets the needs of cines. Its projects are mainly in early stages of development, targeting 17 dis- people living in low- and middle-income countries. eases, with a focus on schizophrenia.

137 Access to Medicine Index 2016

Takeda Pharmaceutical Co., Ltd.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE cials and candidates for public office where per- gies) are systematically included in its research MANAGEMENT mitted by law. Takeda has shared its policy posi- partnerships. RANK 16 SCORE 3.0 tions with the Index related to the TRIPS and the Doha Declaration. It has also disclosed infor- Comprehensive policy to ensure clinical trials Rises three positions due to new access strat- mation about its conflict of interest policy, but are conducted ethically. Takeda has policies and egy. Takeda climbs from 19th to 16th position. under a non-disclosure agreement. takes measures to ensure its in-house and out- This reflects the company’s inclusion of access sourced trials are conducted ethically. Its poli- in its business strategy and its new system for Auditing system in place. Takeda has a risk- cies are strong: they include, alongside stand- tracking access-related performance. based auditing system for measuring compliance ard measures, the consideration of scientific with its anti-bribery and anti-corruption meas- requirements and research protocols and post- Access strategy aligned with overall business ures and codes of conduct. For each country trial provisions. strategy. Takeda’s access strategy has been where it operates, audits are undertaken annu- updated, drawing on the Access to Medicine ally or every two years, depending on risk fac- High transparency around clinical trial data. The Index methodology. Specific areas of focus tors. Wherever issues are identified, an audit the company upholds high standards of transpar- within the strategy include vaccines, less devel- following year is mandatory. The company also ency concerning clinical trial data. This includes oped healthcare markets and sub-Saharan audits some third parties. including providing scientific researchers access Africa. to patient-level data upon request, via clinical- Enforcement procedures apply to third par- studydatarequest.com. New centralised performance management ties. Takeda employs a number of strategies system. Takeda has implemented a central- to ensure that third parties adhere to relevant NTD Drug Discovery Booster. Takeda shares ised access strategy dashboard. This dashboard standards of behaviour, such as due diligence intellectual property for leishmaniasis and reports on the overall implementation and pro- and monitoring. These include enforcement pro- Chagas disease via the NTD Drug Discovery gress of the company’s access initiatives. It also cedures up to contract termination in cases of Booster. The company also shares intellectual allows divisions to track the progress of key ini- non-compliance. property with partners such as WIPO Re:Search tiatives and escalate problems to leadership if and Drugs for Neglected Diseases initiative. needed. Settlement for misconduct relating to unethical marketing. Takeda has been the subject of set- Ad-hoc stakeholder engagement approach. tlements in two instances since 2014. In the US, PRICING, MANUFACTURING & Takeda does not have a structured approach Takeda agreed to pay up to USD 2.4 bn to settle DISTRIBUTION to stakeholder engagement. Furthermore, the U.S. personal injury suits claiming that the com- RANK 16 SCORE 1.3 company does not publish information related to pany did not adequately warn about the cancer its stakeholder engagement. risk of one of its diabetes medicines. The com- Rises four places due to performance in equi- pany maintains that it acted appropriately. table pricing. Takeda moves from 20th to 16th, due to its implementation of equitable pric- MARKET INFLUENCE & COMPLIANCE ing strategies for the first time, as well as to its RANK 13 SCORE 1.8 RESEARCH & DEVELOPMENT improved performance in registering products in RANK 7 SCORE 2.8 high-burden countries. Rises two positions despite large fine for misconduct. Takeda rises to 13th place, despite Maintains performance in R&D. Takeda fell one Newly implements equitable pricing of prod- being the subject of the largest settlement in position, but remains in the top ten. This fall is ucts for high-burden diseases. Takeda imple- financial terms following a case of misconduct largely explained by improvements in the perfor- ments equitable pricing strategies for products of any company evaluated. The company has a mances of its peers. The company maintained for diabetes, hypertensive heart disease and comprehensive, risk-based auditing system and a strong performance across R&D. Its relevant chronic obstructive pulmonary disorder (COPD). enforces its procedures on third parties. pipeline almost doubled in size and its perfor- Only a few (2%) of Takeda’s products have equi- mance in product development, clinical trial con- table pricing strategies that target priority coun- Marketing code in place, but performance duct and data transparency also improved. tries (disease-specific sub-sets of countries with incentives are sales driven. Takeda has a mar- a particular need for access to relevant prod- keting code of conduct that aligns with industry R&D commitments are oriented towards ucts). These reach just a few corresponding pri- standards. However, the company does not have access. Takeda aims to deliver its pipeline to ority countries. performance incentives for its sales employees patients with unmet needs around the world. other than sales targets. Furthermore, it only The company has a dedicated Access to Sets pricing guidelines for all sales agents. provides general information about its market- Medicine Council with specific R&D aims. Takeda provides pricing guidelines to third-party ing practices in countries in scope. wholesalers and distributors, but does not pro- No policy for R&D partnerships to include vide evidence that it monitors or audits their Low transparency regarding lobbying activi- access plans. The company does not commit pricing practices. ties. Takeda declares it may make financial con- to ensuring access-oriented terms (e.g., reg- tributions to political organisations, public offi- istration targets or affordable pricing strate-

138 Access to Medicine Index 2016

Mixed performance in product registration. No public position on Doha Declaration. Takeda Donations monitored by partners. Takeda Takeda does not provide evidence that it sets has not published its position on the Doha works with international organizations to make disease-specific registration targets. It does not Declaration on the TRIPS agreement and public ad hoc donations. Third parties have the respon- publish its criteria for making decisions about health. sibility of ensuring that donations are made suc- when or where to register its products, nor does cessfully and in compliance will local codes and it publish information about its products’ regis- laws. Takeda reserves the right to conduct inde- tration status. However, it has filed to register CAPACITY BUILDING pendent audits of third parties and recipients. more than half (70%) of its newest products in a RANK 10 SCORE 1.8 few priority countries (disease-specific sub-sets Involved in humanitarian aid programmes. of countries with a particular need for access to Showing significant improvements. Takeda is Takeda provided ad hoc donations for humani- relevant products). As most of these products one of the biggest risers since 2014. The com- tarian aid, mostly via its partner Americares. were first marketed in 2010, the company can pany has particularly improved in capacity build- consider improving its registration in low- and ing in R&D and pharmacovigilance. However, its middle-income countries. performance is mixed: it disclosed no relevant supply chain management capacity building ini- Consistent recall guidelines. Takeda has glob- tiatives, and does not have a clear focus on local ally consistent guidelines for issuing drug recalls needs. in all countries relevant to the Index where its products are available. Takeda does not publish Strong in R&D capacity building. Takeda builds information on recalls. local R&D capacity through partnerships with and support of local research organisations in Limited brochure and packaging adaptation for countries in scope, including China and Thailand. rational use. Takeda adapts its brochures and The company has a relatively large number of packaging materials to address local language partnerships but it is unclear how it targets local and environmental needs, but does not consider skills gaps. literacy, demographic, or cultural needs. Improved performance in strengthening pharmacovigilance systems. Takeda voluntar- PATENTS & LICENSING ily shares safety data with authorities in coun- RANK 17 SCORE 0.6 tries in scope. The company has activities to build local pharmacovigilance capacity in south- Among laggards, but new policy. Takeda had east Asia, through the International Society of not published its patent filing and enforcement Pharmacovigilance. policy, the status of their patents, or their position on the Doha Declaration on the TRIPS Building manufacturing capacity with a focus in agreement and public health during the period Asia. Takeda commits to assessing and building of analysis. However, there are positive future capacity in countries in scope for in-house man- indications. It has a newly agreed IP policy, which ufacturers only. The company undertakes a rel- includes a policy of not filing patents in sub-Sa- atively small number of capacity building activi- haran Africa, and a new preparedness to offer ties, focusing on in-house facilities in Asia (India royalty-free licensing terms for supply to low-in- and Indonesia). come countries and Least Developed Countries. Builds capacity outside the value chain in Haiti Waiving patent rights in sub-Saharan Africa. and Kenya. Takeda’s philanthropic strategy is rel- Takeda has not made its position on patents atively strong: it targets local needs and includes public, but it has disclosed to the Index that it impact measurements, but does not routinely will not file for new patents and will actively consider long-term impact. The company builds abandon existing patents in sub-Saharan Africa capacities outside the pharmaceutical value (except in South Africa). chain, focusing on local gaps in access to health services, in Haiti and Kenya. No public disclosure of patent status. Takeda does not publish the status of its patents. PRODUCT DONATIONS Commits to engaging in licensing in the future. RANK 16 SCORE 1.7 Takeda does not engage in the non-exclusive voluntary licensing of its patented products. Rises two places. While Takeda has not yet Takeda disclosed to the Index that it will offer implemented a structured donation programme, royalty-free licences to manufacturers to supply it has risen from 18th to 16th position in this Least Developed Countries and low-income area. The company has tailored donation policies countries. and strategies, and is involved in humanitarian aid programmes. Absence of competition-related breaches. Takeda was not found to have been the sub- Respects WHO guidelines in product dona- ject of breaches, fines or judgements relating to tions. Takeda has tailored its donation strategy, competition law during the period of analysis. partly in line with the core principles of WHO Guidelines for Medicine Donations.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 139 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Boehringer Ingelheim GmbH 14 (2014)

Stock Exchange: Privately held • Ticker: - • HQ: Ingelheim, Germany • Employees: 47,501 (average 2015)

Ranking by technical area Ranking by strategic pillar

Management 3.1

Compliance 1 .3

R&D 2.0

Pricing 1 .1

Patents 2.1

Capacity 1 .2 average leader 3 . 0 7 3 1 .6 2 Donations . . . 1 1 2 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Boehringer Ingelheim falls two places to 16th. Its transpar- targets local needs. However, the company rises in R&D, with ency remains low, particularly regarding market influencing one of the largest pipelines for diseases in scope and a new and the outcome of its stakeholder engagements. Its access R&D strategy that includes measurable time-bound targets. approach does not clearly align with its corporate strategy. Plus, it has expanded its commitment not to file for or enforce It drops in donations as it no longer has a structured dona- patents, achieving the broadest geographic scope (albeit for tion programme. In capacity building, it has fallen considera- one product) compared to peers. In pricing, its performance bly, in part by providing comparatively little evidence of how it falls and it is overtaken by peers.

CHANGE SINCE 2014

• Has two new, promising pilots of innovative • Has doubled the size of its relevant pipeline. • Has no registration targets for products for business models in low-income communities diseases in scope. in Kenya. • Has a new R&D strategy focused on open innovation via collaboration. It is not currently • No longer provides price- and volume-of-sales • Has developed an Africa Strategy, where it partnering with third-parties on relevant R&D. information. acknowledges the long-term growth potential of markets in Africa. • Has the same number of products with equita- • Pledges not to enforce its patent on extend- ble pricing strategies as in 2014. ed-release nevirapine (Viramune XR®), includ- • Maintains low transparency regarding its ing in all middle income countries. access strategy and stakeholder engagement • Improves its accountability for its sales agents’ pricing practices. • Is less active in manufacturing capacity build- • Has not strengthened its compliance system. ing (but began technology transfers with a third-party manufacturer in China in 2015).

OPPORTUNITIES

Prioritise R&D targets based on need. lar, it can designate certain territories where it stakeholders to jointly identify skills gaps and Boehringer Ingelheim has pledged EUR 11 bil- is not present as suitable for licensing to generic capacity building goals in other areas of the lion for R&D from 2015 to 2020. It can prioritise medicine manufacturers. pharmaceutical value chain (e.g., strengthening R&D targets based on the needs of people in supply chains). low- and middle-income countries, and engage Improve transparency, particularly around in relevant R&D partnerships. The company can stakeholder engagement. Boehringer Ingelheim also put clear access plans in place during prod- can improve the transparency of its access strat- uct development to ensure successful innova- egies and initiatives. It can engage more with tions are accessible to relevant countries upon stakeholders worldwide, in order to learn from market approval. them and share expertise with external partners. It can disclose the outcomes of these Address access needs in markets not prior- engagements. itized in Africa Strategy. Boehringer Ingelheim has prioritsed five markets in sub Saharan Africa. Broaden capacity building efforts in response It can consider approaches for ensuring access in to local needs. Boehringer Ingelheim can draw other sub-Saharan countries, e.g., by using equi- upon its experience of long-term R&D partner- table pricing, licensing and donations. In particu- ships with local universities, to work with local

140 Access to Medicine Index 2016

Sales in countries in scope Net sales by segment (2015) 1 45 MN 576 MN 1 ,363 MN

1 ,51 3 MN EUR 14,798 MN

11 ,201 MN

Prescription Medicines Biopharmaceuticals Consumer Health Care Industrial Customers Animal Health and other sales In scope, has sales Net sales by region In scope, has no sales

Not in scope 1 4,000

1 2,000 MN EUR

SALES AND OPERATIONS 1 0,000

8,000 Boehringer Ingelheim has five divisions: business for Boehringer Ingelheim’s consumer 6,000 Prescription Medicines, Consumer Health Care, healthcare business was announced. Boehringer Animal Health, Biopharmaceuticals and Industrial Ingelheim has sales in 23 countries within the 4,000

Customers. Prescription Medicines accounts for scope of the Index. 2,000 the vast majority of its sales. The company’s key 0 areas of focus are: cardiovascular disease, met- 2011 2012 2013 2014 2015 abolic diseases, immunology. oncology and dis- Asia/Australasia/Africa Europe Americas eases of the central nervous system. In June 2016, an assets swap of Sanofi’s animal health

PORTFOLIO AND PIPELINE Products per disease category 3 Boehringer Ingelheim has one of largest pipe- tes and kidney diseases. Since 2014, five of its 2 lines of products: with 52 relevant projects. Its R&D projects have progressed from discovery portfolio is mid-sized, with 34 medicines, and stage to pre-clinical development, and two pro- has a strong focus on non-communicable dis- gressed from pre-clinical into clinical develop- 34 eases (NCDs). ment. A small proportion of its pipeline targets high-priority product gaps with low commercial Within its NCD portfolio, Boehringer Ingelheim’s incentive. 29 medicines target respiratory diseases, diabetes, Communicable Non-communicable and hypertensive and ischaemic heart disease. Maternal and neonatal

This focus is also reflected in their R&D pipeline, Boehringer Ingelheim’s portfolio is heavily focused with most candidates targeting asthma, chronic on NCDs, which account for 85% of its total obstructive pulmonary disease (COPD), diabe- portfolio.

Pipeline projects First-line treatments and essential medicines

1 00% 10 5 4 15 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Boehringer Ingelheim does not collaborate with external organisations on its 19 of Boehringer Ingelheim’s medicines are listed on the WHO EML and/or relevant R&D projects. are first-line treatments: e.g., olodaterol (Striverdi®), telmisartan/amlodipine (Twynsta®), fenoterol (Berotec®) and nevirapine (Viramune®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD 37 11 3 NCD

Boehringer Ingelheim’s relevant pipeline has a focus on developing innova- Boehringer Ingelheim is not currently adapting any products to meet the tive medicines for non-communicable diseases. The company is developing needs of people living in low- or middle-income countries. among the largest number of innovative medicines relevant to the Index.

141 Access to Medicine Index 2016

Boehringer Ingelheim GmbH

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE MARKET INFLUENCE & COMPLIANCE RESEARCH & DEVELOPMENT MANAGEMENT RANK 18 SCORE 1.3 RANK 13 SCORE 2.0 RANK 14 SCORE 3.1 Drops eight places due to decreased trans- Improved position in R&D. Boehringer Ingelheim Rises two places despite mixed performance. parency and weak compliance. Boehringer rises five places in the R&D ranking. Its pipeline Boehringer Ingelheim moves from 16th to 14th. Ingelheim falls eight places due to an overall has more than doubled in size since 2014, due It has started several innovative access pilots drop in transparency and a below-average com- to projects that meet new inclusion criteria. Its through its best-practice platform for foster- pliance system. improved ranking is also a result of drops in the ing innovation (Making More Health). However, it performance of some of its peers. lacks transparency across access management, Lags in ethical marketing, with no clear code access outcomes and stakeholder engagement. of conduct. Boehringer Ingelheim does not New R&D strategy supported by five-year have a detailed marketing code of conduct, but investment. Boehringer Ingelheim’s new strat- Access strategy in place, but no clear alignment refers to IFPMA principles on ethical conduct egy plans to invest EUR 11 bn into its new with corporate strategy. Boehringer Ingelheim and promotion. It is not a signatory of the United R&D programme over the next five years. This has an access strategy for its business activities Nations Global Compact and provides no details includes EUR 5 bn for pre-clinical R&D. EUR 1.5 in emerging markets that relate to specific ther- about its marketing programmes in countries bn will go towards collaborative R&D. When size apeutic areas: cardiovascular diseases, respira- within scope. (by revenue) is taken into account, the company tory diseases and diabetes. It has also developed is a clear leader when it comes to directing R&D an Africa Strategy. However, the company does Below average transparency in lobbying. investments towards relevant diseases. not provide details on how its access strategy Boehringer Ingelheim has made some of its aligns with its corporate strategy. public policy positions available on its web- Poor performance in collaborative R&D. The site, specifically related to anti-counterfeiting. company is not engaged in relevant R&D part- Performance management system in place, but In addition, the company supports the policy nerships nor intellectual property sharing. no insight into targets. Boehringer Ingelheim positions of trade associations of which it is a has a performance management system to track member. It does not disclose information about Takes measures to ensure ethical clinical trial progress toward access objectives. However, its conflict of interest policy. conduct. Boehringer Ingelheim has policies in the company is not transparent with regards place and takes measures to ensure in-house to these measurements, nor does it provide Does not disclose breaches of laws or codes. and outsourced clinical trials are conducted evidence that it has specific access-oriented Boehringer Ingelheim did not provide any infor- ethically. incentive structures in place to motivate its mation regarding breaches of codes, regulations employees. and laws, or consequent settlements. The company has been found in breach of codes of con- PRICING, MANUFACTURING & Lack of transparency in stakeholder engage- duct twice for cases related to unethical market- DISTRIBUTION ment. Boehringer Ingelheim has a stakeholder ing, during the period of analysis. RANK 18 SCORE 1.1 engagement strategy and a system in place to incorporate local stakeholder perspectives in its Some enforcement processes present. Drops four places as peers overtake on equi- access-related activities. Nevertheless, it does Boehringer Ingelheim has a process for enforc- table pricing. Boehringer Ingelheim falls four not publish its stakeholder engagement pro- ing codes of conduct that applies to all employ- places from 14th: its equitable pricing behav- cesses, activities and related outcomes. ees and third parties. Failure to comply with iour remained static while peers improved. the company’s rules and regulations may result Additionally, unlike in 2014, the company does ▶ Innovation: two business models. PreCare is a in disciplinary action, including termination of not provide any price or volume-of-sales infor- holistic stroke care package for reaching low-in- employment or discontinuation of services. mation to demonstrate the implementation of come communities in Kenya through awareness However, the company does not disclose details its equitable pricing strategies. raising, education, innovative transport, treat- of disciplinary action taken. ment and insurance solutions. It has also set up a Laggard in equitable pricing. Boehringer coupon-based “loyalty” program, also for stroke Audit system extends to third parties. The com- Ingelheim has equitable pricing strategies for the and which targets both patients and healthcare pany has an auditing system that is co-managed same products as in 2014: these are focused on professionals. Patients receive points for healthy by its Compliance and Internal Audit depart- ischaemic heart disease, HIV/AIDS and stroke. behaviour, and clinics and doctors receive points ments. These oversee regular audits within the However, only a few (6%) of the company’s rele- for adhering to protocols and patient tracking. company and of third parties. The system covers vant products have pricing strategies that target all countries in which the company has opera- priority countries (disease-specific sub-sets ▶ Best Practice: Making More Health. tions. Boehringer Ingelheim does not use exter- of countries with a particular need for access Boehringer Ingelheim and Ashoka (an NGO) nal resources for audits. to relevant products). Together, these target work together to develop, support and scale up just a few (6%) priority countries. Boehringer innovative business models that address global Ingelheim is the only company without a spe- health challenges, focusing on prevention, diag- cific commitment to applying equitable pricing in nosis and treatment. countries and diseases in scope.

142 Access to Medicine Index 2016

New products are registered relatively rap- Pro-access stance on trade policy. Boehringer PRODUCT DONATIONS idly. Boehringer Ingelheim has not yet set spe- Ingelheim has no publicly available position on RANK 17 SCORE 1.6 cific registration targets for diseases and coun- the Doha Declaration on the TRIPS agreement tries in scope. It does not publish its criteria for and public health. However, it states that it does Drops two places. Boehringer Ingelheim has deciding when and where to register its prod- not support positions within free-trade agree- halted its nevirapine (Viramune©) structured ucts, nor does it state where products are reg- ments that would negatively impact access to donation programme for HIV/AIDS. It ended istered. However, it has filed to register all of its medicines. in January 2014 following a change in WHO newest products in at least some priority coun- treatment guidelines. The company no longer tries (disease-specific sub-sets of countries engages in structured donation programmes and with particular need for access to relevant prod- CAPACITY BUILDING drops to 17th place. ucts). Almost half of these products were first RANK 17 SCORE 1.2 launched in 2014 or 2015, making this a relatively Complies with external guidelines. Boehringer good performance. Biggest faller in capacity building. Boehringer Ingelheim’s ad hoc donations commit to the core Ingelheim fell 13 places. It demonstrated less principles of international guidelines for dona- Consistent recall guidelines. Boehringer activity in key areas such as manufacturing, and tion programs, and follow WHO and PQMD Ingelheim has globally consistent guidelines for was outperformed by peers in areas such as guidelines. issuing drug recalls that apply in all countries rel- pharmacovigilance and capacity building outside evant to the Index. It does not publish informa- the pharmaceutical value chain. Its targeting of Undertakes regular audits. Boehringer tion on its recalls. local needs and skills gaps is limited. Ingelheim is one of the few companies undertaking regular audits and requiring regular reporting Limited brochure & packaging adaptation for Above average performance in R&D capac- from recipients on donations. rational use. Boehringer Ingelheim provides evi- ity building. Boehringer Ingelheim’s strongest dence of adapting brochures and packaging capacity building area is R&D: it has a number of Involved in humanitarian assistance. Boehringer materials to address language needs, but does partnerships with local research organisations Ingelheim typically donates ad hoc donations to not consider literacy, demographic, environmen- to support R&D expertise in countries. All of its long-term partners AmeriCares, Direct Relief tal or cultural needs in countries in scope. its partnerships are long-term, but they do not International and MAP international. clearly target local skills gaps.

PATENTS & LICENSING Some activity to strengthen pharmacovigilance RANK 7 SCORE 2.1 systems. Boehringer Ingelheim updates safety labels in countries in scope but did not volun- Consistent performer. Boehringer Ingelheim is tarily share other safety information with rele- a consistent performer in Patents & Licensing, vant authorities. The company has one relevant and provides clarity on where it intends to make activity to build local pharmacovigilance capac- use of its IP rights. In 2016, it improves its behav- ity: with authorities in the Middle East (including iour by expanding the geographic scope of its Egypt and Iraq). non-assert declaration for extended-release nevirapine (Viramune XR®). Low level of activity in manufacturing capacity building. While Boehringer Ingelheim has a spe- Maintains its access-oriented approach to IP on cific system to build capacity for in-house man- anti-retrovirals (ARVs). Boehringer Ingelheim ufacturers, it disclosed only one capacity build- has a history of issuing in non-assert declara- ing activity in the period of analysis: it has begun tions on ARVs. These currently apply to extend- transferring production of HIV/AIDS medicines ed-release nevirapine (Viramune XR®) and to to a third party manufacturer in China. tipranavir (Aptivus®). Limited focus on strengthening supply chains. Waives nevirapine patent rights in MICs. Boehringer Ingelheim did not demonstrate rele- Boehringer Ingelheim has expanded its pledge vant activities to build supply chain management not to enforce its IP rights to extended-release capacity in countries in scope. The company dis- nevirapine (Viramune XR®) to cover all middle closed a detailed approach to falsified medicines income countries. This is the broadest non-en- but did not commit to timely reporting of sus- forcement agreement noted by the Index, and pected cases. was negotiated through the Medicines Patent Pool. Local capacity-building needs for health-related skills and infrastructure outside the value No transparency on patent status. Boehringer chain are not clearly targeted. Boehringer Ingelheim does not publish the status of its Ingelheim does not demonstrate a strategic, patents. needs-based approach to philanthropy. The company undertakes capacity building activities Absence of competition-related breaches. outside the pharmaceutical value chain but does Boehringer Ingelheim was not found to have not clearly address local needs or mitigate con- been the subject of breaches, fines or judge- flicts of interest. ments relating to competition law during the period of analysis.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 143 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Eli Lilly & Co. 17 (2014)

Stock Exchange: XNYS • Ticker: LLY • HQ: Indianapolis, IN, US • Employees: 41,275

Ranking by technical area Ranking by strategic pillar Management 3.7

Compliance 1 .9

R&D 1 .5

Pricing 1 .2

Patents 0.9

Capacity 1 .5 average leader 7 4 6 7 . Donations . . 2.4 . 0 2 1 1 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Eli Lilly remains 17th. The governance of its approach to product than in 2014, and now has three donation pro- access has significantly improved: its new Going Beyond grammes. However, it has the smallest pipeline relevant to the Medicines Alone strategy combines its several initiatives Index. It has fallen back in pro-access IP management. During on access. It has improved substantially in Market Influence the period of analysis, it was judged to have breached com- & Compliance, with a more transparent approach to ethi- petition law in Mexico. Eli Lilly shows innovation in capacity cal marketing and lobbying, and a broad, risk-based approach building but does not clearly demonstrate that all its capacity to auditing. It uses equitable pricing strategies for one more building activities consistently target local needs.

CHANGE SINCE 2014

• Improves its access strategy, including the building capacity outside the pharmaceutical • Still does not publish the status of its patents development of an innovative business model value chain. in countries in scope. for diabetes in China. • Has not yet set targets for registering prod- • Has no publicly available position on the Doha • Has the smallest relevant pipeline of all 20 ucts for specific diseases or in countries in Declaration on the TRIPS agreement and companies measured. scope. public health.

• Expanded its intellectual-property-sharing • Has not yet disclosed price or volume-of-sales • Continues to engage in donation programmes partnership with the Medicines for Malaria information to demonstrate the implementa- for diabetes and mental health conditions. Venture in 2015. tion of its equitable pricing strategies.

• Performs less well in building capacity in man- • Still does not provide pricing guidelines to ufacturing, offset by an innovative approach to sales agents or monitor prices or mark ups.

OPPORTUNITIES

Expand and strengthen its access focus. Eli Lilly R&D activities fill key product gaps by drawing Set registration targets for key diseases. Eli currently focuses its access initiatives around on its experience in understanding local product Lilly can set targets for registering products in products for diabetes and TB. It can go beyond development needs, gathered, e.g., through the countries in scope. This helps to ensure early these by drawing upon its diverse expertise Lilly China Research and Development Centre. access to products in high-need countries. The in different disease areas and product types. As new products move into late stages of devel- company can also register existing products in Plus, given that non-communicable diseases opment, Eli Lilly can make plans for products to more countries with high burdens of disease. (NCDs) are a growing concern in low- and mid- reach poor and vulnerable populations in low- dle-income countries, Eli Lilly can strengthen its and middle-income countries. Consider access barriers for animal health approach to affordability here. products. Given the large numbers of people in Strengthen and expand capacity building low- and middle-income countries living with Mitigate mark-ups in low- and middle-income efforts. Eli Lilly can draw on its experience in livestock and other animals, Eli Lilly can leverage countries. Where legally possible, Eli Lilly can building capacity outside the value chain and its acquisition of Novartis’ Animal Health busi- provide pricing guidance to sales agents and from its multi-drug-resistant TB (MDR-TB) part- ness to improve human health by addressing establish processes for monitoring mark-ups. nership, to strengthen and expand its activities zoonotic diseases. within the value chain. For example, it can expand Consider local needs and access during prod- its efforts to build manufacturing capacity, work- uct development. Eli Lilly can ensure more of its ing with local partners to identify shared goals.

144 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015)

3,1 81 .0 MN

USD 19,958.7 MN

1 6,777.7 MN

Human pharmaceutical products Animal health

In scope, has sales Revenues by geographic information In scope, has no sales Not in scope 24,000 22,000 20,000 MN USD 1 8,000 SALES AND OPERATIONS 1 6,000 1 4,000 Eli Lilly is divided into two segments: Human The company has sales in 72 countries in scope, 1 2,000 1 0,000 Pharmaceutical Products and Animal Health and approximately 15% of its revenues derive 8,000 Products. Its portfolio is focused on oncology, from emerging and frontier markets. 6,000 neuroscience, men’s health, immunology, endo- 4,000 2,000 crinology and cardiovascular disease. With the 0 acquisition of Novartis’ Animal Health busi- 2011 2012 2013 2014 2015 ness, Eli Lilly became the world’s second largest Rest of world Japan Europe USA animal health company.

PORTFOLIO AND PIPELINE Products per disease category 1 Eli Lilly has the smallest pipeline of projects, Eli Lilly’s relevant R&D project aims to develop 3 with one R&D project that addresses the needs a VEGFR1 antibody to target diabetic nephropa- of people in countries in scope. With 14 med- thy. This product candidate has moved from dis- icines, its portfolio is also one of the small- covery stage, through preclinical development, 14 est of the companies in scope. Eli Lilly’s portfo- and into phase I since 2014. Eli Lilly is not target- 10 lio includes medicines targeting ischaemic heart ing high-priority product gaps with low commer- disease, diabetes and mental health conditions. cial incentive for diseases in scope.

In 2014, Eli Lilly gained market approval from the Communicable FDA for dulaglutide (Trulicity®) for the treat- Non-communicable ment of type 2 diabetes. In addition to products Multiple categories for NCDs, Eli Lilly’s portfolio also contains med- Eli Lilly’s portfolio is focused on NCDs: 10 out of icines for infectious diseases: vancomycin, cefa- the 14 products in its relevant portfolio target one clor and capreomycin. or more NCDs.

Pipeline projects First-line treatments and essential medicines14

1 00% 3 3 6 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Eli Lilly is not collaborating with external organisations on R&D for diseases Eli Lilly has eight medicines listed on the WHO EML and/or as first-line treat- in scope. ments: olanzapine, glucagon, insulin lispro, vancomycin, capreomycin, quini- dine duloxetine and fluoxetine.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD NCD

Eli Lilly’s only relevant pipeline project is a new chemical entity (NCE): a Eli Lilly is not currently adapting any products to meet the needs of people VEGFR1 antibody targeting diabetic nephropathy. living in low- or middle-income countries.

145 Access to Medicine Index 2016

Eli Lilly & Co.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE local governments, communities and the com- RESEARCH & DEVELOPMENT MANAGEMENT pany, through training, support and partnership. RANK 18 SCORE 1.5 RANK 9 SCORE 3.7 The programme aims to extend the reach and impact of the company’s product portfolio to the Falls further in ranking. Eli Lilly’s pipeline of Improvements in all areas lifts company into emerging Chinese middle class. products that qualify for analysis is below aver- top ten for access management. Eli Lilly moves age in size; it was not able to demonstrate how up three places into the top ten, following certain investigational products will be made improvements across all areas of measurement. MARKET INFLUENCE & COMPLIANCE accessible in relevant countries. Eli Lilly main- Its transparency is still limited: the company RANK 12 SCORE 1.9 tains a leading position when it comes to ensur- does not yet disclose its performance toward ing that clinical trials will be conducted ethically. access targets or its approach to stakeholder Rises seven places following improved com- engagement. pliance. Eli Lilly rises into the middle group, No clear R&D targets addressing diseases and mainly due to indications that its compliance has countries in scope. Eli Lilly commits to conduct- New access strategy covering multiple pro- improved and to an increased level of transpar- ing R&D for diseases in scope, including diabe- grammes. Eli Lilly has developed a new Going ency in its lobbying activities. tes, and intends to register its products in coun- Beyond Medicines Alone Strategy, aimed at tries in scope. However, Eli Lilly does not pro- increasing access to medicine for people in low- Weak evidence of code of conduct for ensur- vide evidence of having measurable, time-bound and middle-income countries. This strategy ing ethical marketing. Eli Lilly discloses weak strategies to operationalise this commitment. includes several programmes, such as the com- evidence that its approach to ethical marketing pany’s MDR-TB Partnership and the Expanding is consistent with industry standards. However, Commitment to R&D partnerships, but no Access for People programme for diabetes in the company provides training for its employees policy. Eli Lilly commits to engaging in R&D China. on ethical marketing. Employee incentives take partnerships to increase access to medi- more than sales performance into account, also cine. However, it has no mechanism for ensur- Performance management system in place, but looking at employee competencies, behaviours ing access-oriented terms are systematically does not publish progress. The company has a and customer value metrics. included in the terms of R&D partnerships. centralised performance management system that uses quantitative and qualitative measures Some transparency on lobbying activities. Eli Strong policy on clinical trial ethics. The Lilly to collect data and appraise performance across Lilly states that it does not make political contri- Bioethics Framework helps ensure Eli Lilly’s its global operations. Eli Lilly does not publicly butions in countries within scope. It discloses an trials are conducted ethically. This includes an report on its performance against access-re- overview of its policy positions related to access iterative process to ensure studies are designed lated targets. to medicine, in particular those related to free ethically, and a clear policy on providing partic- trade agreements and intellectual property. Eli ipants with continued access to investigational Incentive programme rewards teamwork, col- Lilly does not disclose any information related to medicines after a trial is complete. laboration, leadership. The company has estab- its policy for managing conflicts of interest. lished the Lilly Access Excellence Awards, which High transparency around clinical trials. Eli Lilly recognizes individuals and teams for excellence Transparent when found to be acting unethi- maintains a high level of clinical trial data trans- in access-to-medicine practices. Employees are cally. Eli Lilly is transparent with regards to dis- parency, including providing scientific research- rewarded for outstanding teamwork, cross-func- closure of its settlement reached for infractions. ers access to patient-level data upon request, via tional collaboration and leadership in meeting The company has been found in breach of a clinicalstudydatarequest.com. this goal. code of conduct, related to unethical marketing, once during the period of analysis. Collaborates through intellectual property Stakeholder engagement strategy includes sharing. While Eli Lilly has no collaborations in structured approach. Eli Lilly’s stakeholder Has system for enforcing compliance. Eli Lilly its relevant pipeline, it shares intellectual prop- engagement strategy includes a structured has a system for enforcing compliance among erty for MDR-TB via the Lilly Tuberculosis Drug approach to engaging with local stakeholders. employees and representatives, but it discloses Discovery Initiative. Its Open Innovation Drug This approach is managed from either the HQ or only general information and does not provide Discovery Program shares compounds with the local offices, depending on the type of engage- details on disciplinary actions taken. Medicines for Malaria Venture. ment and location. Nevertheless, the company does not publish information on its stakeholder Broad scope for auditing process. Audits are engagement approach. conducted annually, but the company does not PRICING, MANUFACTURING & specify whether it also uses external resources. DISTRIBUTION ▶ Innovation: business model for diabetes in The scope extends to the entire organisation, to RANK 17 SCORE 1.2 China. Lilly Expanding Access for People (LEAP) all countries of operations and to third parties, is a pilot that addresses access to diabetes care based on risk assessment. Rises one place with an expansion of equitable in China. It uses a for-profit business model, pricing. Eli Lilly moves from 18th to 17th place, informed by a shared value approach, that cre- due to a modest increase in its use of equita- ates benefits for individuals, their families, ble pricing. The company only considers afforda-

146 Access to Medicine Index 2016 bility, and no other socio-economic factors, in Limited transparency on patent status and the active pharmaceutical ingredient for capreo- either its inter- or intra-country equitable pricing trade agreements. Eli Lilly does not publish mycin (a TB medicine). strategies. It performs poorly when it comes to the status of its patents in countries in scope, rapidly and widely filing for registration. and has not published its position on the Doha ▶ Innovation: supporting TB treatment capac- Declaration on the TRIPS agreement and public ity. Eli Lilly takes a multi-pronged, technolo- Increased equitable pricing. Compared to 2014, health. gy-based approach to building capacity in India Eli Lilly has one more product with equitable to diagnose and treat TB patients. Its strategy pricing. Its equitable pricing strategies cover No involvement in voluntary licensing. Eli Lilly includes a mobile application to support rural products for diabetes and unipolar depres- does not engage in the non-exclusive voluntary health care workers, and a web-based tool to sive disorders. A quarter (25%) of its products licensing of its patented products, and has no improve TB-case notification and treatment have equitable pricing strategies that target pri- public stance detailing when and how it would adherence by private health services. ority countries, reaching some (27%) priority consider licensing. countries (disease-specific sub-sets of countries with a particular need for access to rele- Evidence of anti-competitive behaviour. During PRODUCT DONATIONS vant products). the period of analysis, the Mexican Supreme RANK 11 SCORE 2.4 Court of Justice confirmed a decision by the Still no pricing guidance for sales agents. As in Mexican Competition Authority that Eli Lilly Rises five places, out of the bottom group. 2014, Eli Lilly does not guide, monitor or audit (among other companies not in scope) engaged Eli Lilly has moved from 16th to 11th place. the pricing practices of its sales agents. in anti-competitive practice between 2003- With three donation programmes for NCDs, it 2006. Eli Lilly maintains it did not engage in accounts for almost half of the donation pro- Limited registration performance. The com- inappropriate behaviour. grammes in this category. pany has only provided registration information for one of its products, dulaglutide (Trulicity®), Has three long-term structured donation pro- for which it has filed for registration in a few pri- CAPACITY BUILDING grammes. Eli Lilly’s programmes are focused ority countries (disease-specific sub-sets of RANK 15 SCORE 1.5 on mental health and diabetes. It provides insu- countries with a particular need for access to lin to diabetes patients through two single-drug relevant products). Eli Lilly does not have dis- Focuses on capacity building outside the value donation programmes: Life for a Child (LFAC), ease-specific targets for registering its prod- chain. Eli Lilly takes a relatively strong approach in which Eli Lilly provides insulin for 13,500 chil- ucts in countries in scope, nor does it commit to to building capacity outside the pharmaceutical dren in 23 countries; and AMPATH, in which Eli a registration timeframe. It does not publish the value chain, including innovative initiatives in this Lilly provides insulin to 1,475 adults in Western criteria it uses to decide when and where to reg- area. However, its performance in other areas is Kenya. ister its products. comparatively weak, particularly in manufacturing and in R&D partnerships with local research Improving donations supply chain. In partner- Consistent recall guidelines. Eli Lilly has glob- organisations in countries in scope. It does not ship with DHL, Eli Lilly helped to improve the ally consistent guidelines for issuing drug recalls consistently target local needs. security of shipments of donated pharmaceuti- in all countries in scope where its products are cal products to Kenya. Shipments included insu- available. Eli Lilly does not publish information Stronger in building capacity outside the value lin, fluoxetine and olanzapine for AMPATH dona- on recalls. chain. Eli Lilly’s approach to philanthropy is relation programmes. tively strong (including long-term commitments Limited brochure & packaging adaptation for and impact measurement), but does not clearly Unclear guidelines on monitoring, audit- rational use. Eli Lilly aims to facilitate rational target local needs or specific objectives. The ing and donations. Eli Lilly states that its ad use by using blister packs for products destined company builds capacities outside the pharma- hoc and structured donation programmes are for hot and humid conditions and by ensuring ceutical value chain in relevant countries, focus- designed to comply with both internal standards packaging and labelling include text in local lan- ing on TB and diabetes. and external guidelines, including WHO guide- guages for all products. lines. It has not, however, disclosed its policy. Strengthening supply chains through part- The company also did not provide any informa- nerships. Eli Lilly is moderately active in build- tion regarding the monitoring and auditing of its PATENTS & LICENSING ing supply chain management capacity in coun- donation programmes. RANK 15 SCORE 0.9 tries in scope through partnerships, including in Pakistan, Rwanda and Vietnam. However, Makes ad hoc donations following natu- Conservative approach to licensing and the company did not demonstrate that it shares ral disasters and in humanitarian crises. Eli patent transparency leads to a low ranking. information with relevant stakeholders to Lilly donates medicines that are specifically While Eli Lilly has a clear policy of not filing improve supply chains. requested by relief agencies, partnering with for or enforcing patents in Least Developed them during natural disasters and humanitar- Countries, it remains comparatively conserva- Limited strengthening of pharmacovigilance ian crises. During the period of analysis, it has tive in its approach to licensing, patent disclo- systems. Eli Lilly updates safety labels for its donated in response to earthquakes in Haiti sure and public acknowledgement of the Doha products in relevant countries but did not dis- and Nepal, MAP international, project HOPE, Declaration on TRIPS and public health. Plus, Eli close voluntary safety data sharing with author- Americares, Direct Relief International and Lilly was the object of a negative decision con- ities. It does not build local pharmacovigilance Partners in Health. cerning anti-competitive behaviour in Mexico. capacity through partnerships.

Publicly available policy of not filing for or Weaker performance in building manufacturing enforcing patents. Eli Lilly has a publicly availa- capacity. Eli Lilly makes a general commitment ble policy of not seeking, maintaining or enforc- to building manufacturing capacity in relevant ing patents in Least Developed Countries. countries. In the period of analysis, the company completed one technology transfer to a third- party manufacturer in China for manufacturing

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 147 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Daiichi Sankyo Co., Ltd. 19 (2014)

Stock Exchange: XTKS • Ticker: 4568 • HQ: Tokyo, Japan • Employees: 15,249

Ranking by technical area Ranking by strategic pillar Management 1 .6

Compliance 1 .6

R&D 2.6

Pricing 1 .8

Patents 0.3

Capacity 1 .7 average leader 0 8 8 8 . Donations . . 1 .1 . 0 1 1 1 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Daiichi Sankyo rises one place, with signs of improvement ited evidence of an access-oriented approach to intellec- in several areas. The company is slightly more transparent tual property. There is also no evidence it uses performance regarding its market influence activities; it has expanded equi- measures to consistently track progress toward access-re- table pricing to one more product; it is one of the biggest lated targets. It has no structured donation programmes and risers in Capacity Building; and it makes a clear commitment has been found in breach of civil laws governing marketing to reporting suspected falsified medicines to national author- practices. ities. Nevertheless, it drops in Patents & Licensing, with lim-

CHANGE SINCE 2014

• Still lags in access-to-medicine management, • Has registered more products in high-burden • Has moved a greater proportion of R&D pro- where it lacks solid management structures countries than in 2014. jects through the pipeline than in the previous and performance measurements. reporting period. • Improves its accountability for its sales agents’ • Shows some improvement in the transparency pricing practices, by providing guidelines and • Has still not disclosed a pro-access of its marketing and lobbying activities. monitoring prices. IP-management strategy.

• Has equitable pricing strategies for one more • Provides price-point data for the first time. • Has improved in capacity building outside the product than in 2014. pharmaceutical value chain and for R&D. • Its relevant pipeline is approximately 50% • Has implemented a global policy for issuing larger than in 2014. • Discloses the strongest commitment to drug recalls. reporting suspected falsified medicines, relative to peers.

OPPORTUNITIES

Consider future access during development. with high inequality. For example, its pricing Set registration targets. Daiichi Sankyo can set Daiichi Sankyo can make specific access plans strategy for olmesartan medoxomil (Benicar/ time-bound targets for registering new products for all relevant R&D projects (e.g., affordable Olmetec®) could be expanded to countries such for diseases in scope that prioritise low- and pricing and sufficient supply commitments) as as Indonesia and Pakistan. middle-income countries where there is a need. they move along the pipeline. Develop a public position on IP management. Join efforts to combat antimicrobial resist- Incorporate insights from country-level mar- Daiichi Sankyo can develop and disclose a public ance. Daiichi Sankyo has two antibiotics on the keting codes into new global code. Daiichi position on where it plans to file for and enforce WHO Model Essential Medicines List (EML) that Sankyo can incorporate insights from its many patents. are used in clinical practice. The company can country-level marketing codes of conduct into take action to increase access to these med- its newly released global code. It can also expand Enlarge activities in low and middle-income icines, while ensuring their responsible use. its enforcement processes to cover all third par- countries. Daiichi Sankyo can widen its presence Daiichi Sankyo can join global efforts to address ties globally. in these countries to ensure its focus on “inno- antimicrobial resistance, for example by sign- vative business” also delivers new products to ing the Declaration by the Pharmaceutical, Expand equitable pricing strategies. Daiichi unserved populations. It would need a detailed Biotechnology and Diagnostics Industries on Sankyo can expand existing equitable pric- access strategy that uses an appropriate range Combating Antimicrobial Resistance. ing strategies to more high-burden countries of product deployment approaches.

148 Access to Medicine Index 2016

Sales in countries in scope Revenues by segment (2015) 2,756 MN 53,365 MN

JPY 986,444 MN

930,323 MN

Prescription drugs Healthcare (OTC) products Others In scope, has sales Revenues by geographic area In scope, has no sales Not in scope 1 ,1 00,000 1 ,000,000

MN JPY 900,000 SALES AND OPERATIONS 800,000 700,000 600,000 In 2015, following its divestment of generics Daiichi Sankyo currently has sales in 44 coun- 500,000 arm Ranbaxy, Daiichi Sankyo moved to a busi- tries within the scope of the Index. 400,000 ness model focused on “innovative business”. 300,000 The company’s primary focus is on discovering 200,000 1 00,000 and developing medicines for cardiovascular and 0 metabolic diseases, and oncology. The divest- 2011* 2012** 2013** 2014 2015 ment has reduced the company’s exposure to Rest of world India Japan Europe North America developing countries. *Due to a change in company reporting practices, numbers from 2011 and 2012 are incomparable. **Includes revenues from Ranbaxy Group.

PORTFOLIO AND PIPELINE Products per disease category

Daiichi Sankyo has a small portfolio, of 13 medi- the treatment of venous thromboembolism. The 4 5 cines and four preventive vaccines, for relevant company is developing medicines and vaccines diseases. It has a mid-sized pipeline of 20 R&D for lower respiratory infections, diarrhoeal dis- projects that address the needs of people in eases, TB, malaria, and eight NCDs. It has multi- 17 countries in scope. ple new discovery-stage projects. 1

It has seven medicines targeting one or more Several projects target high-priority product 7 non-communicable diseases (NCDs), four tar- gaps with low commercial incentive, including Communicable Non-communicable geting a range of infectious diseases, and one for discovery-stage projects for malaria and TB. The Maternal and neonatal Multiple categories treating maternal haemorrhage. The company company has moved DS-2969, (for C. difficile gained marketing authorisation from the FDA in infection) from discovery into phase I trials. Daiichi Sankyo has products for communicable 2015 for edoxaban (Savaysa®) for the reduction diseases and NCDs. The latter mainly target res- of stroke risk in non-valvular atrial fibrillation and piratory and cardiovascular diseases.

Pipeline projects First-line treatments and essential medicines

1 5% 1 0% 75% 4 4 7 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Daiichi Sankyo partners with the Medicines for Malaria Venture and the TB Of the 17 products in Daiichi Sankyo’s portfolio, 10 are listed on the WHO Alliance to conduct small molecule screening. Prices will be set on the basis EML and/or as first-line treatments. This includes four vaccines for the pre- of a no-gains, no-loss policy in most countries in scope. vention of measles, pertussis and tetanus.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 2 CD 5

NTD NTD

MNH MNH

NCD 2 2 NCD 7

Two of Daiichi Sankyo’s medicines are in phase II trials: CS-3150 for hyper- Daiichi Sankyo’s adaptive pipeline includes numerous new discovery-stage tensive heart disease and DS-8500 for diabetes. projects, including projects targeting malaria and TB.

149 Access to Medicine Index 2016

Daiichi Sankyo Co., Ltd.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Some transparency around lobbying activi- eration of scientific requirements and research MANAGEMENT ties. Daiichi Sankyo states that it does not make protocols, use of placebo controls and post-trial RANK 20 SCORE 1.6 any political contributions in countries in scope. provisions. It lists its memberships of industry associa- Lags in this area, with limited information tions, and provides links to industry association Provide patient-level data on request; but does about access management. Daiichi Sankyo (JPMA)positions on intellectual property, TRIPS not disclose all trial results. The company newly remains in 20th place. The company only pro- and counterfeit medicines. Nevertheless, it does provides scientific researchers with access to vides general information regarding its perfor- not disclose the financial contributions it makes patient-level data upon request (via clinical- mance management system, and limited trans- to associations it has joined. studydatarequest.com). However, it does not parency on its stakeholder engagement activi- commit to publishing the results of clinical trials ties. However, it now takes a clearer, more stra- Found to have breached civil laws governing that have negative results. Currently, it consid- tegic approach to access. ethical marketing. Daiichi Sankyo reached a set- ers responding to requests for such results on a tlement in the USA of approximately USD 39 mn, case-by-case basis. Access approach focused on three priorities. for claims regarding physician opinion and dis- Daiichi Sankyo’s access approach focuses on: (1) cussion programmes. As part of the settlement, orphan disease treatment and global health; (2) the company entered into a Corporate Integrity PRICING, MANUFACTURING & social contributions to improve medical access; Agreement that involves enhancing its compli- DISTRIBUTION and (3) social responsibility for a sustainable ance programme. RANK 13 SCORE 1.8 society. The company does not describe how these objectives combine to form an overall Auditing process in place, but not for third par- Rises four places to join the middle ranks. access strategy. ties. Audits are conducted on a three- to five- Daiichi Sankyo rises four places. Unlike in 2014, it year basis, and the frequency may increase now provides price-point information to demon- Poor disclosure of access-related outcomes. based on risk assessments. Audit teams are strate that it implements equitable pricing strat- Daiichi Sankyo has a performance manage- composed of in-house auditors and can include egies. It has pricing guidelines for sales agents as ment system, but does not specify which meas- external auditors. Audits are conducted in all well as drug-recall guidelines. It performs above urements it uses. Likewise, the company is not countries where the company has operations. average in registration, with improved registra- transparent about its access targets or related Third parties are not audited. tion of products in high-burden countries. progress. It does not have dedicated incentive structures for rewarding employees when they Equitable pricing activity increases modestly achieve access-related objectives. RESEARCH & DEVELOPMENT from low base. The company has equitable pric- RANK 9 SCORE 2.6 ing strategies for more products than in 2014. Not transparent about stakeholder engage- They cover products for communicable and ment. Daiichi Sankyo is not transparent about Despite high investment, R&D commitments non-communicable diseases, including lower how it chooses which stakeholders to engage not clearly linked to need. The company respiratory infections, TB, ischaemic heart dis- with, nor about the process or outcome of these directed JPY 64,550 mn towards R&D for disease, hypertensive heart disease and asthma. engagements. Furthermore, it does not provide eases relevant to the Index in 2014 and 2015, However, only some (29%) of Daiichi Sankyo’s details of its engagements with local stakehold- making up a relatively large proportion of the products have pricing strategies that target pri- ers in particular. company’s R&D investments. Daiichi Sankyo ority countries (disease-specific sub-sets of commits to conducting R&D for global health countries with a particular need for access to priorities. However, its commitments are not relevant products). Together, these strategies MARKET INFLUENCE & COMPLIANCE clearly linked to specific needs in low- and mid- cover only a few (8%) priority countries. RANK 15 SCORE 1.6 dle-income countries. Limited consideration of socio-economic fac- Rises five places through increased transpar- Commitment to R&D partnerships, but no tors when setting prices. Daiichi Sankyo only ency. Although Daiichi Sankyo remains in the policy. Daiichi Sankyo is involved in relevant considers affordability in its intra-country equita- bottom half of the ranking, it rose five positions. R&D partnerships, such as with the Global ble pricing strategies, but considers factors such This is mainly due to the increased transparency Health Innovation Technology Fund. However, as disease burden, competition and the country’s of its lobbying and marketing activities. the company does not have a policy that regulatory system in some of its inter-country ensures access-oriented terms are systemat- equitable pricing strategies. Marketing code of conduct of limited scope. ically included in the terms governing these Daiichi Sankyo’s marketing code of conduct arrangements. Pricing guidelines to sales agents and some applies to third parties, but only in some coun- price monitoring. Daiichi Sankyo provides local tries. Currently, it does not disclose marketing Comprehensive policy to ensure clinical trials sales agents with pricing in all countries in scope activities in countries in scope, but is considering are conducted ethically. Daiichi Sankyo has pol- where its products are sold. Its guidelines differ disclosing marketing payments made in some icies and takes measures to ensure its in-house depending on the pricing system in each coun- countries to healthcare professionals, medical and outsourced trials are conducted ethically. try. It also monitors prices set by distributors in a associations or patient groups. Its policies are strong: they include the consid- sub-set of relevant countries.

150 Access to Medicine Index 2016

Mixed registration performance. The company company does not demonstrate that it consist- commits to registering products for a sub-set of ently targets local needs. diseases in some lower-middle income countries but provides no time-frame for doing so. It does Active in manufacturing capacity building, not publish where its products are registered or including in China and Iran. Daiichi Sankyo has the criteria it uses to decide when and where policies in place to assess needs and build capac- to register its products. However, the company ity in relevant countries for its in-house manu- has filed to register more than half (70%) of its facturers. In practice, the company has a rela- newest products in a few priority countries (dis- tively large number of capacity building activi- ease-specific sub-sets of countries with a parties, including activities with unaffiliated parties ticular need for access to relevant products). in China and Iran.

Recall guidelines vary between countries. R&D capacity building in China. Daiichi Sankyo Daiichi Sankyo has a general global policy for has a long-term partnership with Fudan issuing drug recalls, but its specific guidelines University in Shanghai, China to build local R&D for recalls are different in every country. This is capacity, with a focus on pharmacology. It is not an improvement from 2014, when the company clear how the company targets local skills gaps had no stringent recall guidelines. The company through this partnership. does not publish information regarding its drug recalls. Focuses on health services when building capacity outside the value chain. Daiichi Limited adaptation of brochures and packag- Sankyo’s philanthropic strategy does not clearly ing materials. Daiichi Sankyo provides evidence target local needs. However, the company dis- of adapting its brochures and packaging to take closes several initiatives to build capacities out- account of local language and literacy needs. It side the pharmaceutical value chain in response always includes information in at least one local to local skills and infrastructure gaps, focusing language where its products are sold. In Brazil, on health services in Cameroon, China, India and for example, it also provides an audio version Tanzania. of the package insert to address varying literacy levels. Strongest commitment to reporting falsified medicines. Daiichi Sankyo commits to reporting suspected falsified medicines to relevant author- PATENTS & LICENSING ities within a week. However, the company did RANK 19 SCORE 0.3 not demonstrate that it shares other information to strengthen supply chains, or that it has part- Laggard in Patents & Licensing. Daiichi Sankyo nerships to build supply chain management skills ranks last in this area: it provides limited evi- in countries in scope. dence that it takes an access-oriented approach to IP management. No external pharmacovigilance capacity building activities. Daiichi Sankyo does not disclose Low transparency in its approach to intel- examples of safety label updates for its prod- lectual property. Daiichi Sankyo continues to ucts, voluntary safety data sharing with authori- makes no public commitment concerning its pat- ties, or external capacity building activities (such enting strategy, makes no public disclosure of as training partnerships) to strengthen pharma- patent status, and has not published a company covigilance systems in countries in scope. position on the Doha Declaration on the TRIPS agreement and public health. PRODUCT DONATIONS No consideration of voluntary licensing. Daiichi RANK 18 SCORE 1.1 Sankyo does not engage in the non-exclusive voluntary licensing of its patented products, and No structured donation programmes. Daiichi has made no public offer to consider this. Sankyo remains in the lower ranks, in 18th place, due to its very low level of activity in this area. Absence of competition-related breaches. Daiichi Sankyo does not have a structured dona- Daiichi Sankyo was not found to have breached tion programme, and made one ad hoc donation competition law during the period of analysis. in Palestine.

CAPACITY BUILDING RANK 11 SCORE 1.7

Significant improvement in capacity building. Daiichi Sankyo is one of the biggest risers in this area. It improved in capacity building outside the pharmaceutical value chain and for R&D, and has made the strongest commitment to reporting suspected falsified medicines. However, the

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 151 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Roche Holding AG 12 (2014)

Stock Exchange: XSWX • Ticker: ROG • HQ: Basel, Switzerland • Employees: 91,747

Ranking by technical area Ranking by strategic pillar TO BE NOTED Roche declined to provide data Management 1 .8 to the 2016 Access to Medicine Index, citing the fact that oncol- Compliance 2.6 ogy – a major and expand- R&D 1 .4 ing part of its business – is not in scope. The 2015 Index Pricing 0.7 Methodology Report explains why, following a thorough mul- Patents 1 .3 ti-stakeholder consultation pro- Capacity 0.3 cess, cancer medicines were leader average not included within the scope 2 . 3 7 6 0 . . Donations 2.3 . of the 2016 Index. Roche’s per- 2 0 1 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation formance in access to medicine has been evaluated since PERFORMANCE the first Index was published in 2008. Roche has important non-cancer products in its port- Roche falls seven places. It has advanced in compli- In comparison with other companies, Roche’s folio, including medicines for ance, with enforcement processes that also apply public transparency, and therefore its commitment HIV/AIDS and hepatitis C, as to third parties. It lags in R&D, as its commitments to accountability and knowledge-sharing, is gen- well as diagnostics. Of these, are not linked to need within the scope of the erally low. For example, it does not publish: infor- 13 products are on the WHO Model Essential Medicines Index, it does not share intellectual property for mation about access commitments, performance List (2015). Roche has both R&D with relevant stakeholders and has no policy measurements or outcomes; outcomes of stake- the capacity and the respon- of basing R&D partnerships on pro-access terms. holder engagement activities or its stakeholder sibility to improve access to It applies equitable pricing strategies to only a lim- selection process; the results of clinical trials these products. The Index also ited portion of its products. In IP-management, within a specified timeframe; whether it commits assesses companies’ overall approaches to access to med- Roche commits to not filing for or enforcing pat- to registering all trials; its criteria for making reg- icine (not disease-specific), at ents in low-income countries, and has enabled istration decisions, or where products are filed the strategy-setting and gov- technology transfer for HIV/AIDS treatments. for registration; whether it has issued drug recalls ernance levels. Based on these Roche donates products for diabetes and commits during the period of analysis; the status of its pat- considerations, the 2016 Index to building capacity in several areas. ents, or its position on the Doha Declaration. evaluated Roche using data from past submissions and public sources.

CHANGE SINCE 2014 For Roche only, this section reflects performance changes that are publicly disclosed.

• In 2015, rolled out the Access Planning • Still does not prioritise access in its R&D com- • In 2014, extended its partnership with the Framework, aiming to identify specific regional mitments or partnerships. Côte d’Ivoire Ministry of Health to facilitate and national challenges, and developed more • Supported hepatitis C awareness raising in access to hepatitis B, C and D treatments. than 60 country-specific access plans. Vietnam for World Hepatitis Day in 2014, and • Launched the Roche Pharma Africa Strategy • Has improved its compliance system as well as in Indonesia in 2015. in 2015, acknowledging the need for capacity the transparency of its lobbying activities and • Signed the Declaration by the Pharmaceutical, building in sub-Saharan Africa in collaboration enforcement processes. Biotechnology and Diagnostics Industries on with local partners. • Has not been found in breach of anti-competi- Combating Antimicrobial Resistance. tion laws during the period of analysis.

OPPORTUNITIES

Include other diseases areas in its access small proportion of its portfolio. It can expand can ensure strong access plans are included in efforts. Roche can broaden its existing access these strategies to more diagnostics and plat- the terms and conditions of these partnership initiatives (e.g., for cancer medicines) to improve form technologies, particularly its HCV diagnos- agreements (e.g., non-exclusivity, affordability). access to medicine for other diseases, includ- tic products, to ensure all relevant products are ing for products on the WHO Model Essential priced affordably where they are needed. Evaluate impact of capacity building efforts in Medicines List (EML). For example, Roche could sub-Saharan Africa. Through the Roche Pharma build on its cancer-focused partnerships in coun- Agree access-oriented licensing terms for Africa Strategy, the company aims to increase tries such as Gabon, Indonesia and Kenya. pipeline products. Roche has licensed dano- access to medicines for viral hepatitis and wom- previr (now in phase II development) for supply en’s cancers. As it works toward this aim, Roche Ensure affordability for more products. Roche in China. When licensing promising pipeline can help ensure effectiveness by evaluating the implements equitable pricing strategies for a products for supply to emerging markets, Roche impact of its initiatives and publishing outcomes.

152 Access to Medicine Index 2016

Sales in countries in scope Sales by division (2015)

1 0,81 4 MN

CHF 48,145 MN

37,331 MN

Pharmaceuticals Diagnostics

In scope, has sales Sales by geographic area In scope, has no sales Not in scope 45,000

40,000 MN CHF 35,000 SALES AND OPERATIONS 30,000

25,000 Roche is one of the world’s largest biopharma- ing molecular diagnostics, clinical chemistry and 20,000 ceutical companies. It works in in-vitro diagnos- immunoassays, tissue diagnostics, point-of-care 1 5,000 tics, tissue-based cancer diagnostics and diabe- diagnostics and biotech solutions. These diag- 1 0,000 tes management. It has two divisions: pharma- nostics cover a variety of diseases in scope, 5,000 ceuticals and diagnostics. Roche’s pharmaceuti- including metabolic, liver and heart diseases. As 0 cal business is focused on oncology, immunology, of 2014, it had sales in approximately 90 coun- 2011 2012 2013 2014 2015 ophthalmology, infectious diseases and neuro- tries in scope. Africa/Australia/Ocenia Latin America Asia Europe North America science. Roche Diagnostics offers a wide range of diagnostics and platform technologies, includ-

PORTFOLIO AND PIPELINE Products per disease category

12 Roche has a large portfolio of products for communicable diseases, with a heavy focus on high-burden diseases, and a mid-sized pipeline viral hepatitis. Roche did not disclose products in 39 of projects intended to address the needs of discovery or pre-clinical stages of development. people in countries in scope: with 76 registered 76 products and 14 R&D projects. A small proportion of its pipeline targets 21 high-priority product gaps with low commer- Roche has 19 medicines, 46 diagnostics and 11 cial incentive. including the hepatitis C medicine 4 platform technologies registered for diseases in danoprevir. The Cobas 6800/8800 system was Communicable Non-communicable scope. The majority target viral hepatitis, HIV/ launched in Q4 2014 and approved for HIV/AIDS Maternal and neonatal Multiple categories AIDS or ischaemic heart disease. diagnosis by the FDA in Q4 2015. Roche committed to making its Cobas system available at Approximately half of Roche’s portfolio is focused The company is developing products for five lower prices in developing countries. on communicable diseases. non-communicable diseases (NCDs) and four

Pipeline projects First-line treatments and essential medicines

7% 1 4% 79% 9 4 4 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Roche is developing a beta-lactamase inhibitor and two medicines for viral 79% of Roche’s medicines are listed on the EML/or as first-line treatments: hepatitis in partnership. Roche granted Ascletis rights to develop and manu- e.g., peginterferon alfa-2a (Pegasys®), ribavirin (Copegus®), alteplase facture danoprevir, in phase II for hepatitis C, in China. (Activase®) and oseltamivir (Tamiflu®).

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD 3 4 CD

NTD NTD

MNH MNH

NCD 3 NCD

Roche has 11 relevant innovative medicines in clinical development. Roche is adapting products that target kidney diseases and hepatitis B. Both Lebrikizumab, a late-stage product targeting chronic obstructive pulmonary projects include trials in countries in scope, such as Brazil, Colombia and disease and severe asthma, is being tested in countries including Mexico. Mexico.

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Roche Holding AG

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE parties. It makes no reference to incentives for patient-level data upon request, via clinicalstudy- MANAGEMENT sales agents, other than sales targets, nor does it datarequest.com. RANK 19 SCORE 1.8 disclose information regarding marketing activities or the payments it makes in countries within ▶ Innovation: signing on to combat antimicro- Biggest faller. Roche drops nine positions from scope. The company has not signed the United bial resistance. Roche signed the Declaration 10th. Even though it has a clear access strategy, Nations Global Compact. by the Pharmaceutical, Biotechnology it drops due to low public transparency regard- and Diagnostics Industries on Combating ing progress toward access-related targets and Strong in transparency of lobbying practice. Antimicrobial Resistance in January 2016, stakeholder engagement. The company publishes its policy positions thereby committing to investing in R&D that related to access to medicine, including biosim- aims to meet public health needs. Clear access strategy. Roche’s access strat- ilars, anti-counterfeiting and clinical research. egy has a detailed set of objectives, namely: In its code of conduct, Roche describes its No evidence of sharing intellectual property delivering innovation; improving affordability; approach for managing conflicts of interest. This for R&D. Roche does not provide evidence that strengthening healthcare infrastructure; increas- includes the description of cases where conflicts it shared its intellectual property with research ing awareness; and supporting patients. It tai- of interest may arise, and actions employees are institutions or neglected disease drug discovery lors its approach depending on local health- expected to take. Nevertheless, it does not dis- initiatives during the period of analysis. However, care needs. In 2015, it rolled out the Access close information related to the political contri- in April 2016, the company did review its posi- Planning Framework, aiming to identify spe- butions it may make in countries within scope. tion on R&D for neglected tropicla diseases cific regional and national challenges to provid- (NTDs), where it commits to consider sharing ing access to medicine. It has also developed the Found to have breached code of conduct. intellectual property with potential applications Roche Pharma Africa Strategy, with a focus on Roche was the subject of a settlement regarding in neglected tropical diseases with non-profit 20 sub-Saharan countries, targeting viral hepati- a breach of a code of conduct during the period organisations or other companies who wish to tis and some types of cancer. of analysis, involving the unethical marketing of pursue such research further. a medicine in Australia. Poor transparency on access-related outcomes. Roche publishes only general information about Transparent enforcement process and discipli- PRICING, MANUFACTURING & its access-related outcomes. It does not publish nary actions. In its 2015 Annual Report, Roche DISTRIBUTION details, such as commitments, targets and per- disclosed aggregate totals of internal investiga- RANK 20 SCORE 0.7 formance measures. tions into alleged violations of its code of conduct, as well as of the sanctions and disciplinary Biggest faller. Roche falls 9 places to 20th, Low transparency regarding stakeholder actions taken in response. mainly because it provides no information in sev- engagement. Roche publishes information eral key areas, including price and volume-of- related to stakeholder engagement, but does sales data, drug recall policy, registration targets not publish the outcomes of these activities nor RESEARCH & DEVELOPMENT and how it attempts to facilitate the rational use its stakeholder selection process. RANK 19 SCORE 1.4 of its products.

Ad hoc engagement with local stakeholders. R&D commitments not clearly linked to needs Targets needs to a degree through equitable Roche engages with local stakeholders on an ad within the scope of the Index. Roche commits pricing. Public data shows that 5% of its rele- hoc basis. It publishes only general information, to R&D that addresses unmet product needs vant products have pricing strategies that target and provides no evidence that it incorporates within the scope of the Index. Roche makes no priority countries, reaching 70% of correspond- the outcomes of these activities into its opera- commitment to meeting the specific needs of ing priority countries (disease-specific sub-sets tions and strategies. populations in countries in scope. of countries with a particular need for access to relevant products). No policy for R&D collaborations. The company MARKET INFLUENCE & COMPLIANCE does not commit to ensuring access-oriented No guidelines for sales agents. The company RANK 4 SCORE 2.6 terms are included in its research partnerships. does not have pricing guidelines or a monitoring or auditing system for in-house or third-party Leading in market-influence transparency and Takes measures to ensure that clinical trials are sales agents. compliance. Roche climbs from 12th to 4th. This conducted ethically. Roche has policies in place is due to improvements in the structure of its and takes measures to ensure its in-house and No disease-specific registration targets. Roche compliance system and to its public transpar- outsourced clinical trials are conducted ethically does not report disease-specific registration tar- ency regarding lobbying activities and enforce- gets. It does not publish its criteria for making ment processes. Does not fully publish trial results; has system registration decisions, nor does it reveal where for making patient-level data available. Roche its products are filed for registeration. Mixed performance in ethical marketing. Roche does not specify a timeframe for publishing has a code of conduct that includes ethical mar- the results of its clinical trials. However, it does No drug recall policy. Roche does not report keting provisions and that also applies to third provide scientific researchers with access to having a drug recall policy. Roche does not pub-

154 Access to Medicine Index 2016 lish whether it has issued drug recalls during the considers financial sustainability and includes ters to measure blood sugar levels for all chil- period of analysis. impact evaluations. The company supports dren involved. capacity building outside the pharmaceutical Facilitating rational use of diabetes products in value chain in relevant countries, e.g., through its Commits to social responsibility. Roche pub- children. In 2014, Roche adapted the packaging Phelophepa mobile health clinic in South Africa. licly commits to acting responsibly through phil- of the glucometers and insulin pumps it donates It did not disclose how it prevents or mitigates anthropic donations and non-commercial spon- via the Changing Diabetes in Children pro- conflicts of interest in these initiatives. sorship. The company is transparent about its gramme (run with Novo Nordisk). Its adaptations policy, which aligns with WHO guidelines. take account of language, literacy and demo- Limited focus on low- and middle-income coun- Transparent about impact. Roche publishes graphic needs in ten relevant countries. In 2015, tries for R&D partnerships. Roche partners with information about several ad hoc donations, Roche supplied glucometers and testing strips 50 universities globally, but focuses on coun- including the outcome and impact reports. to children in seven African countries. tries outside the Index scope. The company did not disclose any relevant partnerships with local Involved in donations following natural disas- research organisations to build R&D capacity in ters. Following natural disasters, Roche pro- PATENTS & LICENSING relevant countries in the period of analysis. vides product donations to local partners. RANK 11 SCORE 1.3 Following the earthquake in Nepal, the company Builds manufacturing capacity. Roche makes donated more than 180,000 vials of ceftriax- Commits to waiving patent rights in poor coun- a general commitment to build manufacturing one (Rocephin®), an antibiotic that treats a wide tries. Roche has publicly committed not to file capacity in relevant countries. The company has range of infectious diseases. for or enforce the existing patents it holds in 20 production sites globally, including in China, Least Developed Countries and in low-income Brazil and Mexico, but did not disclose whether countries, and not to file for or enforce patents it undertook any manufacturing capacity build- for ARVs in sub-Saharan Africa. ing activities (e.g., in-house training, third-party REFERENCES technology transfers, or capacity building with Public commitment to licensing for anti-retrovi- unaffiliated partners) in the period of analysis. rals. Roche has publicly stated that it is open to Publicly available sources used to compile this the licensing of saquinavir (Invirase®), an alter- Some activity in strengthening pharmacovig- report card include: Roche Finance Report 2015; native second-line HIV/AIDS treatment, should ilance systems. Roche contributed to at least Roche Annual Report 2015; Roche corporate significant medical need be identified. Roche one workshop on pharmacovigilance in coun- website. Other references are available. previously completed technology transfers to tries in scope during the period of analysis, spe- 13 manufacturers for the supply of saquinavir cifically regarding biotherapeutic medicines in to sub-Saharan Africa and to Least Developed Ghana. The company did not disclose exam- Countries. It has granted licences for the pro- ples of safety label updates for its medicines or duction of oseltamivir (Tamiflu®) in order to pharmacovigilance-related information-sharing support increased production. (e.g., voluntarily sharing post-marketing safety surveillance data with authorities) in countries in Does not publish patent statuses. Roche does scope of the Index. not publish any information about the status of its patents. Limited disclosure about strengthening supply chains. Roche makes a public statement on Does not take a public position on the Doha counterfeiting, committing to cooperate with Declaration. Roche has not made a public state- authorities whenever a Roche product is con- ment about its position on the Doha Declaration cerned. The company did not disclose relevant on the TRIPS agreement and public health. activities (e.g., training partnerships) or information-sharing with local stakeholders (e.g., to pre- Has not been found in breach of competition vent product diversion, or improve demand fore- law. Roche has not been found to have breached casting) regarding supply chain management competition law during the period of analysis. capacity building in countries in scope during the period of analysis.

CAPACITY BUILDING RANK 19 SCORE 0.3 PRODUCT DONATIONS RANK 12 SCORE 2.3

Limited disclosure regarding capacity build- Among the fallers. Roche moves from 7th to ing activities. Roche makes a strong public 12th place . The company donates blood glucose commitment to capacity building in its philan- meters (ACCU-CHEK®) in a structured donation thropic policy, including targeting local needs. programme for children with diabetes. Roche is The company supports capacity building activi- involved in humanitarian aid donations, and has ties in countries in scope, such as training labo- a clear public commitment to engaging in prod- ratory technicians in sub-Saharan Africa through uct donations. its HIV-focused AmpliCare programme, but did not disclose details or show how it targets spe- Continues support for diabetes control. Roche cific local needs. has renewed its commitment to the Changing Diabetes in Children (CDiC) programme (which Strong approach to philanthropy. Roche’s pub- is coordinated with Novo Nordisk). In this pro- lished philanthropic strategy targets local needs, gramme, Roche provides strips and glucome-

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 155 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

RANK SCORE . Astellas Pharma Inc. 18 (2014)

Stock Exchange: XTKS • Ticker: 4503 • HQ: Tokyo, Japan • Employees: 17,113 (FY2014)

Ranking by technical area Ranking by strategic pillar Management 2.1

Compliance 1 .5

R&D 1 .6

Pricing 0.8

Patents 1 .2

Capacity 1 .8 average leader 0 4 3 3 . Donations . . 1 .1 . 0 2 1 1 average 0 1 2 3 4 5 Commitments Transparency Performance Innovation

PERFORMANCE

Astellas falls two places to 20th, despite improving in cer- capacity building, focusing on Asia. It has yet to implement an tain areas. In R&D, it commits to maintaining its investment in equitable pricing strategy for a disease in scope, and has no R&D overall at over 17% of net sales, and has clear targets to relevant registration targets. Its transparency around market- develop products for neglected tropical diseases. Its approach ing and lobbying is low, and it was found to have acted unethi- to intellectual property has improved, with a pledge not to file cally twice. It has set objectives relating to access to medi- for or enforce IP rights in select Least Developed Countries cine, but they do not clearly link to an overall access strategy. and low-income countries. It is one of the biggest risers in Astellas does not donate products for diseases in scope.

CHANGE SINCE 2014

• Still lacks a clearly defined access strategy and its total R&D investment at more than 17% of • Has improved in building local capacity in its stakeholder engagement activities are still net sales. supply chain management and in health-re- conducted on an ad hoc basis. lated areas beyond the production and distri- • Improves its accountability for its sales bution of medicines, including building health- • Exhibits weaker performance in compliance agents’ pricing practices, by providing pricing worker capacity in Kenya. than in 2014. It was found to have breached guidelines. the UK PMCPA code twice: for providing false information and for failing to provide accurate • Still has no set targets for filing for the regis- information. tration of new products in countries in scope.

• Its R&D strategy for 2015-2017 includes mul- • Publicly commits not to file for or enforce pat- tiple targets to develop products for the dis- ents in select Least Developed Countries or eases of poverty, and to maintain the ratio of low-income countries.

OPPORTUNITIES

Put access plans in place for pipeline projects. Transfer knowledge of equitable pricing strate- access to these medicines, while ensuring their Astellas can make specific access plans for each gies. Astellas can transfer its experience of equi- responsible use. It can join global efforts to R&D project for high-burden diseases: e.g., its table pricing to products for diseases in scope. address antimicrobial resistance, for example by medicines in phase I for asthma, kidney diseases This could include existing products, as well as signing the Declaration by the Pharmaceutical, and schizophrenia. This can include commit- products emerging from its pipeline. Biotechnology and Diagnostics Industries on ting, during late stages of clinical development, Combating Antimicrobial Resistance. to registering successful innovations in countries Expand Changing Tomorrow Together pro- where they are needed. gramme. Astellas can expand this stakeholder Leverage R&D expertise in product adapta- engagement programme to low- and middle-in- tion for more diseases. Through partnerships, Build lasting improvements in local R&D capac- come countries where it has operations. This Astellas can apply its expertise in adapting exist- ity. Astellas can draw on its existing R&D activi- could lead to a structured approach to stake- ing products to meet specific needs (as exhib- ties in countries in scope to build local research holder engagement. ited in its schistosomiasis partnership) to more capacity: e.g., through institution-level partner- disease areas. ships with local public research organisations. Join efforts to combat antimicrobial resistance. This will help address local skills gaps in a sys- Astellas has six antibiotics on the WHO EML temic and sustainable way. that are used in clinical practice and are important for low-resource settings. It can increase

156 Access to Medicine Index 2016

Sales in countries in scope Sales by segment (2015)

JPY 1,372,706 MN

Pharmaceuticals

In scope, has sales Sales by geographic area In scope, has no sales Not in scope 1 ,200,000 MN JPY 1 ,000,000 SALES AND OPERATIONS 800,000

Astellas is active in five therapeutic areas: urol- Early 2016, the company acquired the regenera- 600,000 ogy, oncology, immunology, nephrology, and neu- tive ophthalmology biotech Ocata Therapeutics 400,000 roscience. The company aims to expand its port- for a similar amount. folio with products for muscle diseases and 200,000 opthamology. The company has sales in 45 coun- 0 tries in scope. At the end of 2015, Astellas sold 2011* 2012 2013 2014 2015 its dermatology business to LEO Pharma for Asia/Oceania Europe/Middle East/Africa Americas Japan USD 727 mn. *Due to a change in company reporting practices, the numbers from 2011 are incomparable with following reporting years.

PORTFOLIO AND PIPELINE Products per disease category

Astellas has a small portfolio of 15 medicines for Its relevant pipeline is mainly clustered in clinical 4 relevant diseases and a small pipeline of eight development, with projects targeting lower res- R&D projects that address the needs of people piratory infections, schistosomiasis, schizophre- 6 in countries in scope. nia, chronic kidney disease, severe asthma and 15 diabetic nephropathy. Astellas has two R&D pro- Astellas’ portfolio is mainly focused on infectious jects that target high-priority product gaps with diseases, and includes seven broad-spectrum low commercial incentive: for Chagas disease 5 antibiotics registered for the treatment of multi- and schistosomiasis. Both of these projects are Communicable ple diseases in scope. In Q1 2016, Astellas gained being conducted in partnership. Astellas’ inves- Non-communicable marketing authorization (FDA) for isavucona- tigative medicines for schizophrenia, chronic Multiple categories zonium sulfate (Cresembra®), an azole antifun- kidney disease and severe asthma moved from Astellas’ portfolio contains 15 medicines, targeting gal to be used in conditions associated with HIV/ pre-clinical into clinical development since the infectious diseases, asthma, diabetes, schizophre- AIDS. last Index. nia and hypertensive heart disease.

Pipeline projects First-line treatments and essential medicines

1 3% 38% 49% 5 3 6 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140

In partnership, with access provisions (ap) In partnership, w/o ap Not in partnership First-line & on WHO Essential Medicines List First-line only On WHO-EML only Other

Astellas is collaborating on drugs for Chagas disease, and (via the Pediatric 60% of Astellas’ medicines are listed on the WHO EML and/or as first- Praziquantel Consortium with Merck KGaA) for schistosomiasis. The latter line treatments. This includes nilvadipine (Nivadil®), doxycycline and includes plans for access, e.g., via manufacturing in endemic countries. benzylpenicillin.

Pipeline by stage of development Innovative medicines and vaccines Adaptive medicines and vaccines

CD CD

NTD NTD

MNH MNH

NCD 3 NCD

Astellas’ pipeline is highly focused on innovative projects. Alongside several Astellas, via the Pediatric Praziquantel Consortium with Merck KGaA, is medicines, it is developing an H5N1 avian influenza vaccine (in phase II) and a co-developing a new formulation for in children under six. Features include a seasonal influenza vaccine (in phase III). less bitter taste, making the pill easier for children to take.

157 Access to Medicine Index 2016

Astellas Pharma Inc.

PERFORMANCE BY TECHNICAL AREA

GENERAL ACCESS TO MEDICINE Breaches of code of conduct and weak enforce- No intellectual property sharing. The company MANAGEMENT ment system. Astellas was responsible for a provided no evidence that it shares intellectual RANK 18 SCORE 2.1 double breach of the UK PMCPA code during property with research institutions or neglected the period of analysis: for giving a false response disease drug-discovery initiatives. Lags behind without a clear strategy for and for failing to provide accurate information. improving access to medicine. Astellas remains On this occasion, the company’s enforcement in 18th place. The company does not have a system also failed, as proper, timely action to PRICING, MANUFACTURING & well-defined access strategy and does not report address unethical behaviour was not taken. DISTRIBUTION on how it tracks progress toward its access tar- RANK 19 SCORE 0.8 gets. Furthermore, its stakeholder engagement Annual, risk-based auditing system. Astellas’ activities are executed on an ad hoc basis. audits draw on both internal and external Joins the laggards as it is now the only com- resources and extend to all contractors and in all pany without an equitable pricing strategy. Has objectives for improving access, but they countries that the company has operations with. Astellas has dropped four places to 19th posi- are not aligned with the core business strategy. tion. It is now the only company in the Index to Astellas’ discloses access objectives including: have not implemented equitable pricing strat- combating neglected tropical diseases (NTDs); RESEARCH & DEVELOPMENT egies for a disease in scope. It also performs preventing and controlling non-communicable RANK 17 SCORE 1.6 poorly when it comes to registering its products diseases (NCDs); supporting anti-counterfeit- for high-burden diseases. ing efforts; and engaging in technology transfer. Maintains its performance while others drop Nevertheless, it does not report having an access behind. Astellas rises three positions in R&D: No efforts to facilitate its products’ rational strategy, nor does it explain how its objectives overall it has maintained its performance, and use. Astellas does not provide evidence that it align with its core business strategy. has a stronger pipeline than in 2014. adapts its brochures and packaging materials to address local literacy, language, demographic, No incentives to reward access-related perfor- R&D commitments tied to clear targets. cultural or environmental needs of populations mance. Astellas does not have dedicated incen- Astellas commits to conducting R&D for dis- from countries in scope. Such measures help tive structures in place for rewarding its employ- eases that have been neglected for commer- ensure products are used as intended. ees when they achieve their access-related cial reasons. It acknowledges that achiev- objectives. Nor does it have measures for tracking its R&D commitments requires long-term Pricing guidelines provided to sales agents. ing progress toward its access-related targets. efforts to improve access to health in develop- Astellas provides general pricing guidance to its ing countries. distributors and affiliates. It does not monitor Poor performance in stakeholder engage- prices or mark-ups. ment. The company does not have a structured Poor policy and transparency in collaborations. approach to stakeholder engagement in coun- The company does not commit to ensuring Lags behind when it comes to product registra- tries in scope. However, it does have some ad access-oriented terms (such as pricing or supply tion. Astellas does not set disease-specific tar- hoc engagement activity, such as those related commitments) are systematically included in gets for registering new products within a set to its Fistula Project in Kenya, in which the com- its research partnerships. Neither does Astellas time-frame. It has not filed to register any of pany engages with local non-governmental publish such terms and conditions in relation to its newest products in any of their correspond- organisations. its ongoing research collaborations. ing priority countries (disease-specific sub-sets of countries with a particular need for access to No policy of disciplinary action where unethi- relevant products). It does not disclose its cri- MARKET INFLUENCE & COMPLIANCE cal trial conduct occurs. Astellas has policies in teria for deciding where or when to register RANK 17 SCORE 1.5 place and takes measures to ensure clinical trials a product, nor does it publish the registration are conducted ethically. However, the company status of its products. As a result, it is unclear Drops eight positions following low transpar- does not provide evidence of how it takes dis- how the company considers where and when to ency and compliance. Astellas’ transparency ciplinary action if ethical violations occur in its make its products available for sale. around its marketing and lobbying activities has trials. decreased since 2014. Its compliance record has Consistent recall guidelines. Astellas has glob- also worsened. It was found to have breached Transparency around clinical trial data set to ally consistent guidelines for issuing drug recalls industry codes of conduct multiple times. improve. Astellas is revising its global policy for in all countries relevant to the Index where its transparency of its clinical trial data. This is cur- products are available. Astellas has not recalled Low transparency in ethical marketing and rently slated to include the disclosure of the a product for a relevant disease in a country in anti-corruption. Astellas’ marketing code is con- results of discontinued research programmes. scope during the period of analysis, but also sistent with industry standards. Its sales agents In a new step, the company provides scientific does not have a policy of disclosing recalls on its are only assigned performance-linked incentives, researchers with access to patient-level data website. driven by sales targets. The company does not upon request via clinicalstudydatarequest.com. disclose anything about its marketing activities.

158 Access to Medicine Index 2016

PATENTS & LICENSING Building manufacturing capacity, e.g., in Brazil RANK 13 SCORE 1.2 and Iran. Astellas commits to assessing needs and building capacity in countries in scope for Rises six places through transparent new in-house manufacturers. In practice, the com- approach. After consecutive Indices at the pany undertakes a number of capacity building tail end of the ranking in Patents & Licensing, activities, including with third parties, e.g., tech- Astellas rises six places. This can be attrib- nology transfers in Brazil and Iran. uted to its new public stance on patenting, and its pledge to consider non-exclusive voluntary Stronger philanthropic approach to build- licensing. ing capacity outside the pharmaceutical value chain. Astellas’ new philanthropic policy is rel- New commitment not to file for or enforce pat- atively strong – it aims to deliver sustainable ents in the poorest countries. Astellas makes improvements and includes impact evaluation a new, public commitment not to file for or – but it does not clearly target local needs. The enforce its patents in select Least Developed company discloses one relevant initiative to build Countries or in low-income countries. capacities outside the pharmaceutical value chain, focusing on obstetric fistula in Kenya. Does not disclose the status of its patents. Astellas does not publish whether and/or where Limited approach to building R&D capacity. it holds patents. Nor does it disclose its position Astellas undertakes some activities to build R&D on the Doha Declaration on the TRIPS agree- capacity in countries in scope (e.g., to strengthen ment and public health. ability to conduct clinical trials). However, it did not disclose any relevant partnerships with local Committed to considering requests to license. universities or other public research organisa- While Astellas has not yet licensed any of its tions to build R&D capacity. products, it publicly states that it will consider requests for negotiating licences on a “case-by- case basis”. PRODUCT DONATIONS RANK 19 SCORE 1.1 No breaches of competition law. Astellas was not found to have been the subject of settle- Ranks last. Astellas ranks last: it has not made ments, fines or judgements relating to competi- any structured or ad hoc donations during the tion law during the period of analysis. period of analysis in any of the countries in scope.

CAPACITY BUILDING RANK 10 SCORE 1.8

One of the biggest risers in capacity building. Astellas rose nine places. The company has improved in capacity building outside the pharmaceutical value chain, and supply chain management. However, it disclosed no relevant R&D capacity building initiatives, and does not have a clear focus on local needs.

Active in strengthening supply chains in Asia. Astellas is moderately active in building supply chain management capacity through partnerships and information sharing, primarily in China and south-east Asia. The company did not disclose a detailed approach to reporting suspected falsified medicines in countries in scope.

Focus on Asia continues for pharmacovigilance capacity building. Astellas demonstrates that it updates safety labels in countries in scope but did not disclose other relevant information sharing. The company has a number of activities to strengthen pharmacovigilance systems in China.

Disclaimer Copyright As a multi-stakeholder and collaborative project, the The material is not intended as an offer or solicitation for No part of this report may be reproduced in any manner 159 findings, interpretations and conclusions expressed herein the purchase or sale of any financial instrument. The report without the written permission of the Access to Medicine may not necessarily reflect the views of all members of the is not intended to provide accounting, legal or tax advice or Foundation. The information herein has been obtained from stakeholder groups or the organisations they represent. investment recommendations. Whilst based on information sources which we believe to be reliable, but we do not guar- The report is intended to be for information purposes only believed to be reliable, no guarantee can be given that it is antee its accuracy or completeness. All opinions expressed and is not intended as promotional material in any respect. accurate or complete. herein are subject to change without notice. Access to Medicine Index 2016

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