GSK aims at prices in middle-income countries

GlaxoSmithKline has cut prices to boost sales in the poorest countries on the globe. Now it's homing in on middle-income countries as another way to grow its revenues. And the company's strategy in these nations mirrors its approach in the poorer ones: Make medicines more affordable, improve access to them, and higher sales will come.

"Our strategy is to grow our business in middle-income countries by increasing the volume of products we sell," CEO Andrew Witty tells Bloomberg.

GSK is part of the Big Pharma parade into Asia and other emerging markets. Faced with the prospect of more generic competition and tougher pricing policies, drugmakers have been looking past the slow-growth U.S. and Europe. GSK's revenue from emerging markets grew by 20 percent in 2009 to about $4.5 billion, and the company is looking for more growth this year.

So, GSK is using flexible pricing models to make drugs more affordable; because middle-income countries have a wide range of socioeconomic groups, the pricing models will allow for different prices in different settings. "[E]conomic status, demography and healthcare infrastructure ... can vary significantly," Witty says. "Taking a single pricing approach would be difficult, inappropriate and inequitable."

- read the Bloomberg story [1]

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