GlaxoSmithKline (GSK) would cut retail prices in India to cater to the lower-income segment besides pumping in Rs 430 crore to develop vaccines from its local facilities, according to Andrew Witty, global CEO of the world’s second-largest drug maker. GSK was also evaluating potential acquisitions and alliances with Indian drug makers, but will not pay unreasonably high valuations expected by Indian companies.
Stressing the growing share of low-income consumers in GSK’s India sales, the company was working on plans to price its products accordingly. The long-term purpose of the initiative is to make its medicines accessible to all income groups. The strategy will be executed through a combination of alliances with local firms or reduction of prices of selective brands. Among GSK’s popular mass products in India are health drink Horlicks and painkiller Crocin. The company operates through two listed arms in India, GSK Consumer Healthcare Ltd and GSK Pharmaceuticals Ltd.
The pharmaceutical market is growing 15-20% in emerging markets such as India compared with a low single digit in developed countries. This had led to global pharma majors Pfizer, GSK and Sanofi Aventis, which are set to lose patents of their blockbuster drugs, to buy or tie-up with Indian companies to leverage the latter’s low-cost advantage.
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