Drugmakers have been on the losing end of India's headlines lately. But GlaxoSmithKline ($GSK) CEO Andrew Witty still sees the country as a key market--so much so that GSK's board actually convened there this week.
In an interview with India's CNBC-TV18, Witty ticked off the reasons why he's "a huge bull on India." For one thing, GSK's businesses there sell at a higher volume than anywhere else in the world--at lower prices, of course. Witty sees his tiered-pricing strategy, where prices are tailored to a market's ability to pay, as key to the company's success there.
In fact, he contends that the whole patent-and-price debate is wrongheaded. Big Pharma's usual pump-the-patent sales strategy doesn't work everywhere. "What needs to be recognized is that India has a unique identity," Witty said. "One has to be very clear that pricing should be much more driven by affordability and create value in the society that one wants to trade in."
Intellectual property protections have come under fire in India lately, as domestic pharma and government officials worry about Big Pharma's growth in their midst. Novartis ($NVS) has been fighting for a patent on its leukemia drug Glivec for years--the case is now under Supreme Court review--and Pfizer ($PFE) recently lost its bid for a patent on the liver and kidney cancer drug Sutent. And then there's the Nexavar controversy; officials circumvented Bayer's exclusivity with a compulsory license, allowing Natco Pharma to launch a much-cheaper generic.
Witty didn't waste the opportunity to call for IP protection, however, if only in boilerplate language. "Intellectual property protection is an important aspect of ensuring that innovation is rewarded," Witty said, adding, "At GSK, we will continuously strive to defend intellectual property, but more importantly, defend tiered pricing to make sure that we have appropriate pricing for the affordability of the country."
By letting GSK's business "really be an Indian business," Witty figures that his pharma and consumer healthcare can continue to grow. And having GSK's directors backing that strategy can't hurt. "There is a lot more potential for these businesses as they evolve in step with India, and I want my board to see that," Witty said.
- read the CNBC-TV18 interview