Big Pharma Bets on Emerging Economies
Andrew Jack
On the shelves of pharmacies across India, a new form of competition is taking hold. Patients long neglected by multinational drug groups are beginning to gain access to a wider variety of innovative medicines at more affordable prices.
In the past, even when newer drugs were physically available, they were typically charged at Western prices, too costly for most to buy. Now Merck is offering its diabetes drug Januvia at a fifth of the U.S. price, and GlaxoSmithKline (GSK) is charging different prices even within India to reach more of the population.
Such nuanced approaches to drug pricing that more closely reflect the ability to pay represent an attractive new trade-off for pharmaceutical companies: they provide greater sales to please their shareholders, while improving access to medicines for patients on lower incomes in the developing world.
“The pharma industry has realized that the vanilla solutions that were effective in the past now require significant differentiation,” says Todd Evans, director of the health-care advisory group at PricewaterhouseCoopers, the accountancy and advisory firm. “Pricing is going to be highly varied.”
