Following through on a pledge to reduce the cost of its meds in the developing world, GlaxoSmithKline is rolling out price cuts in Kenya. The company's Kenyan unit will reduce prices on "essential" drugs by 50 percent, local Managing Director John Musunga told Bloomberg.
The move is not a purely altruistic one. Improving patient access to medicines can boost the volume of sales, and in emerging markets, higher volumes may make up for the lower prices. Musunga told Capital Business that, after cutting the price of its leading antibiotic by 40 percent, GSK saw a 60 percent increase in volume, thus compensating for the price change.
"What that has shown us is that people like good-quality medicine, but are not able to afford it," Musunga told Bloomberg. "We cannot afford to focus only on the high-income social groups."
The Kenyan changes are part of a companywide effort to cut the prices of its drugs in the developing world, in some cases to as low as one-fourth their cost in developed markets, GSK said in a statement. This latest round of price decreases in Kenya follows cuts to the cost of 13 drugs there since 2009.
- read the Bloomberg news