Glaxo announces 5-year price freeze for post-GAVI countries

GlaxoSmithKline ($GSK) has been a partner of the GAVI Alliance for years, offering some of its vaccines at low cost to help support immunization efforts for children in emerging countries. But now, it's going one step further with a 5-year price freeze on three of its vaccines for countries that graduate from GAVI funding.

By 2020, 22 developing countries will stop receiving resources from GAVI, challenging them to take increasing ownership of their vaccine programs. But as Glaxo announced earlier this week, those governments will continue to receive its jabs for pneumococcal disease, rotavirus and HPV--Synflorix, Rotarix and Cervarix, respectively--at the same reduced prices while they implement their own financing plans.

GAVI Alliance CEO Seth Berkley

"Sustainability is a central pillar in the long-term success of GAVI Alliance-supported vaccine programs," GAVI CEO Seth Berkley said in a statement. "GSK is taking strong steps towards supporting developing countries whose growing economies mean they are no longer eligible for Alliance support."

It's just the latest emerging markets push for Glaxo, a veteran in the area and a leader in tiered pricing strategy. The Britsh pharma giant was one of the first multinational drugmakers to cut prices in the developing world, garnering goodwill as it shot for a pumped-up top line there even at lower margins. The company currently generates 22% of its pharmaceuticals and vaccines sales in its Emerging Markets and Asia Pacific segment, which raked in £4.69 billion ($7.92 billion) in 2013; that number presumably would have been higher had it not been for the $489 million bribery scandal that broke in China last summer, sinking pharma and vaccine sales by 18% in the country.

GlaxoSmithKline CEO Andrew Witty

But Glaxo isn't stopping there. The company recently pledged to increase the registration of its meds and vaccines in Africa and tailor a portfolio of shots specifically to continent's health needs. And this week, CEO Andrew Witty said GSK remains committed to supporting GAVI "to expand and accelerate access to vaccines for children in the countries that still require the support of the Alliance."

- read the release

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