Oct 02, 2006

Novartis Sets the Bar in Pharma Philanthropy with Malaria Drug Price Drop

by Laura Starita

Swiss pharmaceutical company Novartis has announced a plan to offer its malaria drug, Coartem, to developing countries for $1 per treatment, reports The Wall Street Journal. Coartem is considered to be the most effective drug treatment for malaria available. An almost 30 percent decrease in price, this drop means the drug will be sold below cost.

The new Coartem pricing comes after African governments noted that, even with funding from the Global Fund to Fight AIDS, Tuberculosis and Malaria, the per-treatment price was too high for widespread use.

Novartis is not new to the challenges of fighting diseases endemic in the developing world. Since 1979, the Novartis Foundation for Sustainable Development has given funds and drugs to control such illnesses, such as leprosy, malaria and tuberculosis. In a recent interview published in the McKinsey Quarterly, foundation president Klaus Leisinger talked about how the foundation influences the company’s activity in the philanthropy sector:

Our role is to consult, challenge and question. That’s how an institution like ours can help a company define its corporate-citizenship guidelines...Once the guidelines are defined, they have to be implemented through normal corporate-management processes…Only if corporate responsibility metrics are part and parcel of normal business can they be successful.

Novartis knows, however, that cheap drugs cannot be the only piece of an anti-malaria campaign. Distribution and monitoring of treatment has always been more of a barrier than the cost of drugs. The good news is that with lower cost drugs, more money can be spent on solving logistical challenges.

Wall Street Journal: Novartis Cuts Price of Malaria Drug