This week GlaxoSmithKline (GSK) announced “new measures to further advance its commitment towards greater openness, transparency and collaboration”.
Previously GSK restricted the publication of detailed data from its clinical trials. Now it will make this data available, opening itself up to scrutiny by the wider healthcare industry.
This signifies a milestone in the fundamental changes that are taking place in the pharmaceutical industry, and how GSK are taking a different approach to many of its competitors.
Historically the pharmaceutical industry has relied on ‘blockbuster drugs’ that once made it the darling of dividend-hungry investors. However, these discoveries have dried up. Some companies have opted for the route of acquisition to sustain growth (e.g. Pfizer acquiring Wyeth for over US$60billion, due to its pipeline strength), while others have started to split (e.g. Abbott).
GSK, under the leadership of Sir Andrew Witty (who, interestingly, joined GSK through its graduate scheme), has adopted a fundamentally different approach. It has recognised the need to change the way it does business rather than just diversify who it does business with.
In the last few years, GSK has regularly championed the benefits of working with society rather than against it. In a Guardian article Andrew Witty said: “That’s one of the great mis-steps of business over the last 20 years. They’ve allowed it to be perceived that it’s all about money. It shouldn’t be about that… We want to make a return, yes – we’re not a charity. We want to make a good return for our shareholders. But we’re going to do it by being in step with society.”
Whilst there has been positive action in line with this statement by focusing on innovation, access and creating shared value, there is also clear criticism levelled at GSK. This includes a significant fine in relation to poor data disclosure and accusations of shifting assets abroad to reduce tax liabilities which whilst legal, is ethically questionable to some.
Personally, I think that while these issues are specific to GSK, they occur across business under different guises. GSK, in changing how they do business, are in a much better place to create a more responsible model where society is not negatively impacted through business decisions than those that are merely changing business structures (although the tax issue could be discussed in a separate thesis, let alone blog!).
An interesting topic, that has created varying opinions in the office. Please do contribute!
Jonathan Gill, Corporate Advisory Manager, CAF