Healthy Skepticism Library item: 18735

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Cooper D
Glaxosmithkline cuts Far East prices to boost share of market
Telegraph.co.uk 2010 Oct 3
http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/8038687/Glaxosmithkline-cuts-Far-East-prices-to-boost-share-of-market.html

Abstract:

Glaxosmithkline (GSK) has begun cutting prices on some of its key products in Indonesia by up to 80pc as part of a move to increase its market share in the Far East.

Full text:

The Sunday Telegraph has learnt that prices are being slashed by between 35pc and 80pc on 35 brands, including Avamys, a hayfever treatment, and Avodart, a prostate drug.
The move follows a similar initiative last year in the Philippines, where prices on 28 of GSK’s most popular products were cut by between 30 and 50pc. Having dropped the the price of its cervical cancer vaccine by 60pc, GSK saw a six-fold rise in monthly volumes.

Britain’s biggest drug maker is also hoping to introduce a microfinance scheme in both Indonesia and the Philippines to further extend access. Christophe Weber, head of GSK’s Asia business, told The Sunday Telegraph this could help reach patients on a low, or unpredictable income.
Microfinance and re-pricing reflect a bid by drug makers to adapt their business models in emerging markets – the new battleground for the pharmaceutical industry.
A spokesman for GSK confirmed the price cuts would lead to reduced margins, but added it felt this was “fair and reasonable as as we have publicly committed to ensuring our medicines reach people across the spectrum of society”.
GSK is aiming to maintain margins in emerging markets at around 30 to 35pc.
Professor Adrian Towse, director of the Office of Health Economics, said GSK was making a reality of chief executive Andrew Witty’s speech at Harvard University last year, where he said the company would take various approaches to tier the market.
“Improving access and making a profit are not necessarily in conflict,” said the professor.