Drugmakers Embrace Reforms

Image: image100/Corbis

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In the span of just a few weeks, two titans of the drug industry have endorsed a couple of big ideas that Big Pharma has long resisted: GlaxoSmithKline has adopted "tiered pricing," and Eli Lilly & Co. has promised "full disclosure."

While this isn't as stunning as, say, the National Rifle Association accepting the idea of regulating handguns, it is an example of how enlightened self-interest seems to be taking hold in at least two pharmaceutical companies.

Drugmaking is an industry that has been rocked by scandals, recalls, plummeting numbers of new drug approvals, and falling stock prices. Pharmaceuticals companies have also seen their public image plummet from beloved to distrusted in less than 25 years.

As recently as the 1980s, a large majority of Americans adored them. Last year, only 27 percent trusted drugmakers somewhat or a great deal, according to a Harris Poll. This compares to 20 percent who trust Congress, and the current 28 percent approval rating for President Bush.

This decline has occurred even as the industry has produced numerous wonder drugs, from cholesterol-lowering statins such as Pfizer's Lipitor to cancer-busting drugs such as Genentech's Avastin—though the output of late has been slowing.

Now comes London-based Glaxo announcing the abandonment of a central orthodoxy of its peers: that the entire world should pay First World prices for most drugs. Instead, Glaxo has been experimenting with charging much less in developing countries, running pilot projects in South Africa, Morocco, and India. Internally at Glaxo the project has been dubbed "tearing down the barriers." 

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