Regional GlaxoSmithKline chief reveals how ‘new pharma’ is changing Gulf health care

Andrew Miles
Updated 21 August 2017
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Regional GlaxoSmithKline chief reveals how ‘new pharma’ is changing Gulf health care

What the critics call “big pharma” has had an image problem in recent years, and Andrew Miles, the executive in charge of the global health care company GlaxoSmithKline’s (GSK) business in the Gulf, thinks he knows how to resolve it.
“Choice of medication should be a clinical choice, rather than being based on some potential conflict of interest,” said Miles when we met at the UAE offices of GSK in Dubai.
For the last four years, GSK has been at the forefront of a transformation of the drugs industry. Barraged by allegations of inappropriate payments to doctors and other health care professionals, especially in the hyper-litigious US, GSK took the decision to halt all payments to health care providers (HCPs), and to cease rewarding its sales force according to the number of prescriptions issued for its products.
The initiative grew out of GSK’s “corporate integrity agreement” in 2012, which settled lawsuits in the US, and involved a multibillion-dollar payment to the authorities, but it has become something more for GSK.
“GSK was the first big pharma company to stop payments to HCPs to promote our products. It was a big decision for us, and nobody else has done it, though maybe other pharma groups will follow. Overall, it has had a net positive impact. Governments love it. They want all pharma companies to stop payments and we are advising them how to do it. It is a policy for the long term, good for patients and good for shareholders,” he said.
That initiative is set to have repercussions in the Middle East, where GSK has been involved for 65 years. Miles revealed that GSK is in advisory discussions with the Saudi health authorities to draw up new legislation to better regulate the medical and pharmaceutical industry in the Kingdom.
“We are in dialogue with the Saudi Food and Drug Administration (SFDA) in an advisory capacity, and I don’t think we’re far off some kind of enactment of major legislation on standards of transparency and engagement with the health care industry,” he said.
Saudi Arabia has been a focus of the company long before the 2000 merger between UK firm Glaxo Wellcome and American SmithKline Beecham that produced the sixth biggest drugs company in the world.
In different guises, GSK has had a manufacturing facility in Jeddah since 1992, currently employing 427 people. Between that facility, a distribution hub in Dubai’s Jebel Ali, and sales offices throughout the region, GSK covers a region of increasing interest.
“The GSK footprint in the region has a big heritage and has been expanding over the years,” he said.
Its regional operation mirrors the three-sector global corporate structure: Consumer products like household drugs Panadol and Sensodyne; pharmaceutical and prescriptions products like its blockbuster respiratory drug Advair; and vaccines, ranging from the full-spectrum of children’s vaccines — over half the pediatric vaccines delivered in the UAE are made by GSK — to anti-HIV and anti-malarial treatments.
“We have an integrated strategy in the Gulf Cooperation Council (GCC) markets. The region does not have a lot of intra-GCC trade, but is very similar in terms of language, culture and business practices,” he said.
“We will be able to supply Kuwait and Oman via the UAE and Saudi Arabia. The UAE has a good position as a re-export hub for the rest of the region and Africa via our facilities at Jebel Ali. In Saudi Arabia, 80 percent of the portfolio is locally manufactured in Jeddah. That operation has been there for a long time, but it is now part of the Vision 2030 strategy to expand localization and local employment,” he added.
A major expansion is also planned in the UAE, with manufacturing facilities in Dubai due to be opened next year, making the full range of GSK products. The standoff between Qatar and the four countries of the Anti-Terror Quartet (ATQ) prompted some urgent changes to distribution channels earlier in the summer.
“Products are now going straight from Europe to Qatar, which used to come direct from the UAE, and we believe supply continuity is going well. We saw an increase in demand when the measures (blocking land, sea and air links with Qatar) were first announced, and some stockpiling of medicines,” he said.
“We are monitoring the situation. We think it could either escalate or de-escalate rapidly, but we don’t see it getting resolved quickly. It could be one or two years on the current status. But really it’s anybody’s guess,” he added.
Even without the distribution changes forced on GSK by the Qatar crisis, other factors are changing the shape of the industry and the traditional marketing methods used by companies.
“The channels of communication with sales reps are all digital now. You might not be able to physically see a sales rep but you can always get experts online,” he said.
And, of course, marketing is being transformed by the decision to stop payments to HCPs. “Before, there were two ways to drive performance. You could pay HCPs to speak on behalf of the science, but this was expensive and problematic. The main concern, however, was the potential conflict of interest involved. So in 2016 we took the decision to stop it completely. Now promotion is purely based on the science. We do still hire HCPs to work for us, to go out and talk about the products, but it is clear they are our employees,” he said.
“The second way was to pay sales representatives by the number of prescriptions issued for a product. We don’t do that anymore either, so again the potential conflict of interest is removed,” Miles added.
Health care is a major pre-occupation in the Gulf and a top priority for policymakers, which has led to a boom in medical-related industries, from the physical provision of hospital and clinic facilities to the expansion of obligatory medical insurance and the growth of pharmaceutical retailers across the region.
But it has not been without its controversies. How does Miles, as a career executive in the “big pharma” sector, see the big issues in health care in the Middle East?
One perennial is the increasing use of antibiotics. Some critics allege that doctors and pharmacists are too ready to prescribe or sell antibiotic treatments for even the most trivial of complaints. The scientific evidence suggests that this is leading to a new generation of “super bugs” that are resistant to traditional penicillin antibiotics, storing up big health problems ahead worldwide.
One of GSK’s biggest products in the region is the ubiquitous antibiotic Augmentin, and Miles concedes that the industry must do more, in conjunction with governments, to curb excessive selling or prescribing.
“There is a risk that the last line of therapy is no longer effective, but there are things that can be done about that. We can invest in new research and development to tackle the superbugs, and we are doing this. But it also revolves around the indiscriminate use of antibiotics. So we need to do more research to monitor the effectiveness and appropriateness of the existing drugs,” he said.
“We must also educate people on the use of antibiotics via prescription. Most illnesses are viral so they are no good anyway. There is a job of education to be done here with the health service providers. We need government support for regulation for the over-the-counter dispensation of antibiotics. The government is taking some steps but more needs to be done,” he added.
The other big issue for the region is in the related field of allergies and respiratory complaints, which have been chronic problems for many in the desert climate.
“We have a big presence in asthma treatment and have a new medicine which presents double the opportunity for asthma control, with a short-acting element to open the respiratory channels and a long-term part to maintain that.
“Maybe because of climate and environment, we’re also looking closely into chronic obstructive pulmonary disease (COPD) at the moment. We’re looking to unveil a ‘blockbuster’ in this area soon. It’s possible now to alleviate the rate of increase in COPD symptoms, and hopefully keep patients out of hospital for longer,” he said.
“COPD and asthma are closely connected, and around 5 percent of asthma patients get acute symptoms. There are around 50,000 people in the GCC with severe asthma who are not currently getting treated. Our new drugs, Relvar and Nucala, tackle this problem and the response has been incredible,” Miles said.
Other blockbusters are also in the pipeline. “Our big new product Shingrix, which will be launched in 2019, is to treat shingles, with an 80 percent prevention rate,” Miles said.
GSK has also been at the forefront of treatment for HIV. “We’ve launched HIV products across the world and the region, to dramatic effect. In the 1980s, it was a death sentence, now it’s under control in all areas, with the possible exception of sub-Saharan Africa. You’re more likely to die of old age even if you have contracted HIV. But we have to emphasize that healthy lifestyles should not be relaxed,” he said.
In Africa and India, GSK has given up its license rights for anti-HIV products to local producers. In many cases, patients and hospitals in those countries could not afford advanced HIV treatments, so GSK in partnership with the Bill & Melinda Gates Foundation waived its right to license fees.
Meningitis is another area where GSK is active. Its incidence always increases during the Hajj season, when pilgrims are in close proximity to each other. “We have developed several vaccines to treat meningitis,” he said.
Other diseases like malaria and polio are also on GSK’s target board, but again there are other factors at play. On malaria, he said: “It’s the biggest killer in the world, but was not well researched because the commercial opportunities are not there. We have a vaccine, which is 50 percent effective, which we are supplying to some countries at cost. But it needs other measures — like water quality control and preventive netting — to make it more effective,” he said.
“Polio too is a problem with a regional resonance. It has largely been eradicated in most of the world, with the exception of some cases in Afghanistan, Pakistan and (now) Syria, as well as a few cases in West Africa. There is still a cultural problem with polio vaccination in some parts of the Middle East and Asia,” Miles said.
Willingness to bend traditional commercial imperatives to the medical needs of communities, in cooperation with governments, is a sign of what some industry analysts have called “new pharma.”
GSK has consciously set out to take a lead in promoting the more progressive, compassionate side of the industry.
At GSK, that change is likely to be accelerated by the arrival of a new British chief executive of the group, Emma Walmsley, who plans to visit the Middle East soon. “The old model couldn’t continue to exist, it had outlived its purpose,” said Miles.


Saudi energy minister recommends driving down oil inventories, says supply plentiful

Updated 19 May 2019
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Saudi energy minister recommends driving down oil inventories, says supply plentiful

  • Oil supplies were sufficient and stockpiles were still rising despite massive output drops from Iran and Venezuela
  • Producer nations discussed how to stabilise a volatile oil market amid rising US-Iran tensions in the Gulf, which threaten to disrupt global supply

JEDDAH: Saudi Arabia’s Energy Minister Khalid Al-Falih said on Sunday he recommended “gently” driving oil inventories down at a time of plentiful global supplies and that OPEC would not make hasty decisions about output ahead of a June meeting.
“Overall, the market is in a delicate situation,” Falih told reporters before a ministerial panel meeting of top OPEC and non-OPEC oil producers, including Saudi Arabia and Russia.
While there is concern about supply disruptions, inventories are rising and the market should see a “comfortable supply situation in the weeks and months to come,” he said.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is de facto leader, would have more data at its next meeting in late June to help it reach the best decision on output, Falih said.
“It is critical that we don’t make hasty decisions – given the conflicting data, the complexity involved, and the evolving situation,” he said, describing the outlook as “quite foggy” due in part to a trade dispute between the United States and China.
“But I want to assure you that our group has always done the right thing in the interests of both consumers and producers; and we will continue to do so,” he added.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
Russian Energy Minister Alexander Novak told reporters that different options were available for the output deal, including a rise in production in the second half of the year.
The energy minister of the United Arab Emirates, Suhail Al-Mazrouei, said oil producers were capable of filling any gap in the oil market and that relaxing supply cuts was not “the right decision.”
Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse and that OPEC would act wisely to maintain sustainable market balance.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” he said.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, data from the government’s Energy Information Administration showed on Wednesday.
DELICATE BALANCE
Saudi Arabia sees no need to boost production quickly now, with oil at around $70 a barrel, as it fears a price crash and a build-up in inventories, OPEC sources said, adding that Russia wants to increase supply after June.
The United States, not a member of OPEC+ but a close ally of Riyadh, wants the group to boost output to bring oil prices down.
Falih has to find a delicate balance between keeping the oil market well supplied and prices high enough for Riyadh’s budget needs, while pleasing Moscow to ensure Russia remains in the OPEC+ pact, and being responsive to the concerns of the United States and the rest of OPEC+, the sources said earlier.
Sunday’s meeting of the ministerial panel, known as the JMMC, comes amid concerns of a tight market. Iran’s oil exports are likely to drop further in May and shipments from Venezuela could fall again in coming weeks due to US sanctions.
Oil contamination also forced Russia to halt flows along the Druzhba pipeline — a key conduit for crude into Eastern Europe and Germany — in April. The suspension, as yet of unclear duration, left refiners scrambling to find supplies.
Russia’s Novak told reporters that oil supplies to Poland via the pipeline would start on Monday.
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
REGIONAL TENSIONS
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over disruptions in Middle East shipments due to US-Iran political tensions.
Tensions between Saudi Arabia and Iran are running high after last week’s attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the Kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi militia claimed responsibility. 
Saudi Arabia’s minister of state for foreign affairs said on Sunday that the Kingdom wants to avert war in the region but stands ready to respond with “all strength” following the attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” Falih said. “They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”
The attacks come as the United States and Iran spar over Washington’s tightening of sanctions aimed at cutting Iranian oil exports to zero, and an increased US military presence in the Gulf over perceived Iranian threats to US interests.