Posted on April 18, 2007

Gates Foundation Giving Poses Challenges to Pharmaceutical Industry

The billions that the Bill & Melinda Gates Foundation has poured into global health initiatives over the last decade is challenging the world's top drugmakers to rethink the way they do drug discovery, Reuters reports.

According to Intelligence.360, an annual report from IMS Health, Inc., a pharmaceutical information group, the emergence of large-scale philanthropy dedicated to global health issues is both a threat and a collaboration opportunity for drug manufacturers. Moreover, given the sheer size of the Gates Foundation, drug companies may find that it makes more sense, from a practical as well as a public relations standpoint, to partner with the foundation even if they succeed in making a discovery first. Or, as IMS stated in its report, "Pharma companies need to develop an explicit strategy to deal with this phenomenon."

For instance, a $287 million Gates Foundation program announced last July created the Collaboration for AIDS Vaccine Discovery, an international network of sixteen labs dedicated to trying new approaches to AIDS vaccine development. The foundation rewards individual labs that come up with innovative ideas and helps develop those ideas, while also ensuring that the labs collaborate with rivals. In order to achieve results more quickly, however, the labs may need to use patented compounds still under development at for-profit pharmaceutical and biotech firms, a move that will likely lead to debate over the ethics surrounding patents on life-saving AIDS drugs and vaccines, of which there are more than two hundred in development.

"Whether or not the Gates Foundation effort succeeds, it benefits pharma companies to stay in the game, working synergistically with the foundation," said IMS. "The alternative is for pharma to allow itself to be perceived as indifferent to global health concerns — or to be unseated in the pursuit of advances in world health."