More emerging-markets action for GlaxoSmithKline (GSK). The drugmaker has inked a $2.2 billion deal to supply its Synflorix vaccine to Brazil, one of the hottest drug markets in the developing world. But the agreement isn't a simple buy-sell deal. It includes a price that falls from €11.50 to €5 per dose over time. And it includes technology transfer, too.
Over the 10 year life of the vaccine contract, Glaxo will pass on its expertise and technology so that Brazil can end up making the shots on its own. Plus, Glaxo will invest €35 million ($51 million) into an effort to develop a dengue fever vaccine, matching Brazil's own investment into the effort. "One of our strategic visions is to strengthen the Brazilian capacity for producing, developing and innovating" new drugs, Brazilian health minister Jose Gomes Temporao said at a press briefing on the deal (as quoted by the Wall Street Journal).
Indeed, Glaxo's emerging marketing chief said Brazil had been lobbying for Synflorix technology for some time. "The last time we signed an agreement, he said 'hey, this is great, but the next time we do a partnership, let's see if we can take it to the next level,' " Abbas Hussein told the WSJ. And he said Glaxo would consider making similar arrangements with other countries.
As you know, Glaxo CEO Andrew Witty (photo) has been leading a charge into emerging markets since he took the helm of the company. Among his strategies have been partnerships with local companies and discounts on drug prices (which apply to the Synflorix deal as well). Now Glaxo is partnering with governments, too. What's next?