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GlaxoSmithKline to reduce drug prices in emerging markets
 
 
 
 
by Matthew Dennis November 30, 2009, firstword.com
 
The Financial Times reported that GlaxoSmithKline is planning to significantly reduce drug prices in emerging markets next spring, which could see the cost of medicines fall to below two-thirds of western prices.
 
Abbas Hussain, head of emerging markets at the company, said GlaxoSmithKline believes that "access for more of the masses is the way to go." He explained: "My preference is not a high price and 100 units of profit for 100 patients, but to drop the price and make 100 [units] of profit from 500 patients."
 
Some drugmakers have claimed that reducing drug costs in developing countries will lead to lower-priced products finding their way back into wealthier markets, but Hussain remarked that analyses by GlaxoSmithKline suggest these exports were "not substantial enough to worry about."
 

GSK to cut prices of drugs in developing countries, exec tells newspaper
 
Nov 30 2009, Triangle Business Journal - by Frank Vinluan
 
GlaxoSmithKline plans to cut its drug prices in developing countries next spring, according to a report in London's Financial Times.
 
"We fundamentally believe access for more of the masses is the way to go," Abbas Hussain, head of emerging markets at GSK, told the newspaper.
 
The cuts will bring prices below two-thirds of what drugs cost in the western world. The Financial Times reports that London-based GSK and other pharmaceutical companies have been forced to slash prices in recent months by the health-care systems in developing countries.
 
London-based GSK has its U.S. headquarters in Research Triangle Park, where it employs more than 4,000 people. The company has been focusing more attention on emerging markets, where it is seeing strong growth. In its third quarter earnings report, GSK said that while overall sales were up by 3 percent, sales in emerging markets were up by 25 percent. The company said sales in emerging markets represent 14 percent of overall revenue compared to 12 percent a year ago.
 

 

GSK to cut drug prices for developing countries
 
By Andrew Jack in London
Published: November 29 2009 22:30 | Last updated: November 29 2009 22:30
http://www.ft.com
 
GlaxoSmithKline is to cut significantly the prices of its medicine in emerging economies next spring.
 
"My preference is not a high price and 100 units of profit for 100 patients, but to drop the price and make 100 of profit from 500 patients," Abbas Hussain, head of emerging markets at the UK pharmaceuticals company, said. "We fundamentally believe access for more of the masses is the way to go."
 
The reductions - expected to reduce prices in most developing countries to below two-thirds of western prices - reflect intensifying efforts by drug companies to tap demand from the faster-growing economies as western markets stagnate.
 
This year Gbola Amusa, a pharma analyst with UBS, said emerging markets would help the sector maintain annual sales growth of at least 3 per cent, and singled out Novartis, Bayer, Novo Nordisk and Teva as beneficiaries.
 
A number of pharmaceutical groups in recent years have made donations or offered deep discounts in the world's poorest countries on a narrow range of medicines - notably anti-retrovirals for HIV.
 
GSK and other companies have been forced to reduce prices in recent months by healthcare systems in developing countries. This year the Philippines imposed sharp reductions for all drug manufacturers, and Turkey is poised to demand substantial cuts.
 
Global pharmaceutical groups have been criticised for "cherry-picking" rich patients in poor countries who can pay western prices, while leaving most of those in need without access to their products.
 
In response, companies have argued that even very large price reductions would leave their medicines unaffordable to the poorest, while creating a risk of "diversion" of lower-priced products back to richer markets, which would undermine prices in the west.
 
Mr Hussain said experiments by GSK in lower-price markets had not led richer countries to demand similar discounts, while exports back into richer countries were "not substantial enough to worry about".
 
The US, western Europe and Japan account for the bulk of sales of patented medicines, but the greatest growth is forecast to come from countries such as China, Russia, India and Brazil.
 
In the third quarter, GSK's sales in emerging markets were 14 per cent of total pharmaceutical sales, up from 12 per cent a year before.
 
 
 
 
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