AstraZeneca Corporate Responsibility - Our Medicines

Over the last century, the significant advances in healthcare, including medicines, have meant that many previously devastating diseases and disorders can now be effectively managed. As well as the health benefits this brings for many millions of people, effective treatments also contribute to economic development by reducing the need for more expensive care, such as hospital stays, and by improving productivity.

But the fight against disease is far from over. Many diseases are still under-diagnosed or not well treated, or there is not yet an effective therapy. In addition, in most major markets, aging populations mean increasing incidence of chronic diseases such as cancer and diabetes, which require long-term management. Chronic disease is on the increase in middle income countries too, and is also beginning to have an impact in the least developed countries, who continue to face the ongoing infectious disease challenges of HIV/AIDS, TB and malaria.

Continued innovation is required to address the unmet medical needs of a rapidly changing world. At the same time, the growing demand for healthcare, driven by people living longer, increasing populations and the emergence of new economies, means more and more pressure on the budgets of those who
pay for it.

At AstraZeneca, our challenge is to balance the associated downward pressure on the price of our medicines with the cost of continued pharmaceutical innovation that brings benefit for patients and adds value for society over time. We also recognise that we have a role to play in improving health in the developing world, where often the lack of effective healthcare systems, including the lack of healthcare professionals, means that the availability of medicines is not always the primary challenge.

When setting the price of a medicine, we take into consideration its full value to patients, to those who pay for healthcare and to society in general. Our pricing also takes account of the fact that, as a publicly owned company, we have a duty to ensure that we continue to deliver a return on investment for our shareholders. We balance many different factors, including ensuring appropriate patient access, in our global pricing policy, which provides the framework for optimising the profitability of our products in a sustainable way.

We continually review our range of medicines (both those on the market and in the pipeline) to identify any that may be regarded as particularly critical to meeting healthcare needs – either because they treat diseases that are (or are becoming) prevalent in developing countries, or because they are potentially a leading or unique therapy addressing an unmet need and offering significant patient benefit in treating a serious or life-threatening condition. In such cases, we aim to provide patient access to these medicines through expanded patient access programmes. We also support the concept of differential pricing in this context, provided that safeguards are in place to ensure that differentially priced products are not diverted from patients who need them, to be sold and used in more affluent markets.

Patents are important incentives for the continued innovation that drives society’s progress. In the case of pharmaceuticals, the majority of new medicines come from research-based industry – no one else has the right combination of skills, experience and resources to deliver real advances in this area. The path to a new medicine is a long, complex, expensive and risky process. It can take between eight and 12 years and typically over $800 million is invested before the first dollar of sales is realised. We usually file for patent protection early in the research and development process, which means that at the time a new medicine is launched, we have between eight and 15 years of protection left before other companies can begin selling generic versions (at lower prices, because they do not need to bear the high costs of research that we do). We therefore rigorously defend our legitimate intellectual property rights during the period of protection, because this gives us time to generate the revenue we need to continue our investment in providing medicines for important areas of healthcare.

Patents do not create a monopoly for treating a disease – other companies are able to develop a different medicine to treat the same condition. Also, because patents require the disclosure and publication of information about the patented medicine, they can stimulate competition to innovate improved alternatives that expand the range of treatment options – which is important, because patients respond differently to different therapies. And after all patents applicable to a product expire, any company (both innovative and generic) can legitimately market the same product.

Compulsory licensing (the waiving of patent rights to allow patented medicines to be manufactured by other parties) is increasingly being included in the access to medicines debate. AstraZeneca recognises the right of developing countries to use the flexibilities in Trade-Related Aspects of Intellectual Property Rights (TRIPS) provided for in the Doha declaration on the World Trade Organization TRIPS agreement (December 2005) in cases of public health emergency. This enables developing countries with no domestic manufacturing capability to import copies of patented medicines to treat diseases such as HIV/AIDS, malaria and tuberculosis in a public health emergency. We believe that this should apply only when other ways of meeting the emergency needs have been considered and where healthcare frameworks and safeguards to prevent diversion are in place to ensure that the medicines reach those who need them.