[Ip-health] GSK price discrim w/IN countries

[Sean Flynn]

This is a multi-part message in MIME format.
--
[ Picked text/plain from multipart/alternative ]




http://www.ft.com/cms/s/0/4dc2b3bc-f380-11dc-b6bc-0000779fd2ac.html?nclick_=
check=3D1



GSK varies prices to raise sales



By Andrew Jack

March 16, 2008

Financial Times



GlaxoSmithKline has begun a groundbreaking effort to boost sales and expand=
 treatment in the developing world by selling medicines to patients at diff=
erent prices linked to their ability to pay.



The UK-based pharmaceutical group has launched experiments to extend its pr=
actice of differential or "tiered pricing" by offering its medicines at var=
iable prices within, as well as between, middle-income countries.



The policy, known internally as "tearing down the barriers", is under test =
in nations including India, South Africa and Morocco, which have a signific=
ant and growing middle class as well as many people with far lower incomes =
and little access to subsidised healthcare.



The approach, which will be described in its annual corporate social respon=
sibility report issued this week, is designed to generate a premium to reco=
ver development costs on new medicines from wealthier people in emerging ec=
onomies without excluding those who cannot afford to pay.



In a marked shift from the more wide-ranging practice of offering low-cost =
antiretroviral medicines for HIV in the developing world, the GSK test incl=
udes Avandia, a medicine for diabetes.



While it has in the past offered HIV medicines close to cost price in the w=
orld's poorest countries, in middle income countries it has traditionally c=
harged relatively high prices targeting the small but richest socio-economi=
c classes.



Its new policies are designed to extend its products to far less well-off g=
roups at significant discounts, while recognising that it will be unable to=
 offer medicines so cheaply that they can compete with locally produced gen=
erics targeted at the very poorest.



GSK hopes that a greater volume of sales to a larger share of the populatio=
n will offset lower prices, as well as freeing up governments'

scarce health resources in developing countries to focus on treating their =
most impoverished.



Pharmaceutical companies have traditionally been cautious about tiered pric=
ing - especially within countries - because of fears that medicines charged=
 at the lowest prices for the poor will be "diverted" by middlemen for resa=
le to richer groups. However, GSK has identified little such diversion in p=
ractice since it began its pilot programmes in late 2006.



Its strategy to minimise the practice include the use of different colours,=
 packaging and branding of the same medicines to distinguish the richer and=
 poorer markets.



The company's social responsibility report makes little mention of diversio=
n, but highlights a growing number of raids around the world against counte=
rfeiters of its medicines. It identified 429 cases of fake GSK drugs last y=
ear with a value of =A315m.



The most widely faked drugs were Heptodin and Zeffix - brand names for the =
antiviral lamivudine for hepatitis - and Panadol, as well as Sensodyne toot=
hpaste.