Glaxo outlines strategy aimed at middle-income markets

Mumbai: GlaxoSmithKline (GSK), the UK's largest drugmaker, plans to bolster earnings by selling to more people in middle-income countries after cutting prices in the world's poorest nations.

"Our strategy is to grow our business in middle income countries by increasing the volume of products we sell," chief executive Andrew Witty said in an e-mailed interview. Extending Glaxo's flexible pricing programme for such nations would "improve the affordability of our medicines, increase access for patients with lower income levels and be profitable for GSK," he said.

Glaxo has stepped up expansion in emerging regions including Asia to counter slowing demand in the US. The London-based company said in October revenue from developing nations climbed 25 per cent in the third quarter, compared with a 12 per cent drop in the US.

The maker of the Advair asthma treatment said it is adopting flexible pricing models worldwide and cut prices by an average of 45 per cent in the poorest countries from April 2009.

Middle-income nations are "diverse in terms of economic status, demography and health care infrastructure which can vary significantly," Witty said yesterday in the e-mail, which didn't identify individual countries. "Taking a single pricing approach would be difficult, inappropriate and inequitable."

Witty, who went to Nashik, India, for a factory opening Monday, said Glaxo will consider acquisitions as part of its expansion plan in the country.

"Opportunities will be evaluated based on a variety of factors including the strategic nature of the fit," the CEO said. "We are actively looking at growing organically and in-organically."