Glaxo pharmaceuticals will price its drugs 25-40% cheaper in India

GlaxoSmithKline Pharmaceuticals will sell its drugs at prices at least 25% less than those it charges in the US.

This is as per the tier-pricing model the company has adopted, under which prices are decided based on a country’s gross domestic product.

The company on Friday launched two drugs, Revolade and Votrient, in the local market. Revolade, an oral drug used in the treatment of a rare chronic blood disorder that involves depletion of platelets, is priced at Rs28,000 per monthly dosage. On the other hand, Votrient, priced at Rs56,000 per monthly dosage, is used in treatment of advanced cancer of the kidney cells.

The two drugs, targeted at people with chronic illnesses, will be imported from the UK and used for at least 2,000 identified patients in India.

The oncology drug market in India is currently worth around Rs1,200 crore.

GSK is a new entrant in the field, but expects Votrient to have a market size of Rs15-20 crore over the next five years.
The company did not give any guidance for Revolade.
GSK Pharma also offers the breast cancer drug, Tykerb, at similar discounted prices in the Indian sub-continent, along with a host of drugs and vaccines.

“Pharmaceutical companies have taken this approach of differential pricing after there was a huge uproar about the pricing of products. Various companies have taken different methods to reduce prices of products, or even offer medicine for free in extreme cases,” says Dr Purvish Parikh, managing director, Americares India, a non-profit organisation dealing with disaster relief and humanitarian aid.

This leaves open the possibility of cross-selling —- products finding their way into higher-price markets from lower-price markets — which manufacturers try to prevent by adopting various innovative methods.

“Companies put special instructions such as ‘for sale in India only’ on the packing, or even change the language on the packing to regional languages so that these drugs are not sold in other countries,” said Ranjit Kapadia, vice president-institutional research, HDFC Securities.

Considering the prices are often unaffordable even after the discounts, some pharmaceutical companies also offer medicines at heavily subsidised rates depending on the patient’s socio-economic background, said industry sources. Companies apply different methods to verify the patient’s ability to pay for the dosage and the severity of the illness, even offering a discount of up to 100%, if needed.