GSK Announces Plan To Reduce Drug Prices in Developing Countries

GlaxoSmithKline CEO Andrew Witty on Friday announced a plan to reduce the prices of several of its patented medications in 50 of the lowest-income countries worldwide and invest 20% of its profits from low-income countries into health clinics and other infrastructure, the Wall Street Journal reports.

Under the plan, GSK will reduce the price of its patented medications for some diseases -- including asthma, hepatitis B and malaria -- to no more than 25% of the price of such medications in developed countries. According to a GSK spokesperson, GSK's antiretroviral drugs already are sold at reduced prices in developing countries; however, the cost of such drugs will be reduced further if they currently are priced higher than 25% of the price in developed countries (Whalen, Wall Street Journal, 2/14). The plan also would make GSK's drugs more affordable in middle-income countries such as Brazil and India. In addition, GSK will invite scientists from other companies, nongovernmental organizations and governments to conduct research on treatments for tropical diseases at its facility in Tres Cantos, Spain (Boseley, Guardian, 2/14).

Witty also proposed the creation of a voluntary patent pool to fuel development of new treatments for neglected diseases and said that GSK would contribute its patents that could lead to the development of new treatments for malaria, tuberculosis and other diseases. He called on other pharmaceutical companies to make patents available to third-party researchers working on treatments for neglected diseases. According to Reuters, GSK did not include its HIV/AIDS research in the patent pool. Witty said the intent of the patent pool is to focus on diseases that do not have treatments and that other efforts are addressing the need for antiretrovirals (Richwine, Reuters, 2/13).

Witty in an interview before the announcement said the price reductions and investments in infrastructure would not cost much for the company. According to the Journal, GSK's total sales in the lowest-income countries are about $43 million annually. Witty said that 20% of the company's profits from developing countries likely would be about $1.4 million to $2.8 million per year (Wall Street Journal, 2/14).