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Healthy Skepticism Library item: 18825

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

Tan EL
GSK cut prices in Indonesia, boost sales in Asia
Reuters 2010 Oct 29
http://in.reuters.com/article/idINTOE69S0AV20101029


Full text:

GlaxoSmithKline Plc (GSK.L) cut prices on all its drugs sold in Indonesia by 30 to 50 percent this month as part of a plan to raise sales volumes in Asia, which is expected to spend more on healthcare in the years ahead.

“We are very much volume driven. By reducing prices, of course, we’ll reduce our margin. But if the (sales) volume increases significantly, that’s fine,” Christophe Weber, Glaxo’s senior vice president and regional director for the Asia Pacific region said in an interview on Friday.

“Clearly, this part of the world will represent a very significant part of the company (revenues) … more than 20 percent in the near future, and certainly, a major part of our growth,” Weber added.

The company could not say immediately how much of its revenues were driven by Asia now.

The world’s second-largest drugmaker cut prices for all its drugs sold in the Philippines in 2009 and found that sales of some of them, like its antibiotic Augmentin, jumped 50 percent.

It extended the same pricing policy for Indonesia this month and intends to do the same for other developing countries in future, but Weber declined to name them.

“We are aiming at more volume at lower prices. In middle income countries where there is no safety net and only out of pocket (patient expenditure), we want to work with 30 to 40 percent of the population rather than 10 percent,” Weber said.

This policy would be adopted for all new products from now, meaning they would be priced at different levels in different countries depending on how much people can afford, he said.

Healthcare spending in Asia can only rise with growing affluence and many countries starting at a very low base, Weber said. While health expenditure is US$3,181 per capita in Australia, it is US$98 in Thailand, US$37 in Vietnam and the Philippines and US$26 in Indonesia, according to Glaxo.

To prepare itself for rising demand, it has invested much in research and development in China and Singapore.

“We are doing many more clinical trials in Asia … Thirty percent of our patients who are recruited in clinical trials in the world are from Asia,” Weber said.

“We make sure we have enough medical data and are doing enough research in Asian patients because we know there are genetic differences.”

In China, its researchers are trying to design drugs to fight hepatitis, asthma, diabetes, cancer and mood disorders.

 

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...to influence multinational corporations effectively, the efforts of governments will have to be complemented by others, notably the many voluntary organisations that have shown they can effectively represent society’s public-health interests…
A small group known as Healthy Skepticism; formerly the Medical Lobby for Appropriate Marketing) has consistently and insistently drawn the attention of producers to promotional malpractice, calling for (and often securing) correction. These organisations [Healthy Skepticism, Médecins Sans Frontières and Health Action International] are small, but they are capable; they bear malice towards no one, and they are inscrutably honest. If industry is indeed persuaded to face up to its social responsibilities in the coming years it may well be because of these associations and others like them.
- Dukes MN. Accountability of the pharmaceutical industry. Lancet. 2002 Nov 23; 360(9346)1682-4.