[e-drug] Pharmalot: Glaxo Cuts Prices On AIDS Drugs For Poor Nations

E-DRUG: Pharmalot: Glaxo Cuts Prices On AIDS Drugs For Poor Nations
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http://www.pharmalot.com/2008/02/glaxo-cuts-prices-on-aids-drugs-for-poor-nations/

Glaxo Cuts Prices On AIDS Drugs For Poor Nations
February 20th, 2008 7:14 am By Ed Silverman

Glaxo announced what it calls "significant new price reductions" for its
HIV drugs that are offered on a not-for-profit basis to the world's
poorest countries. The reductions, the fifth such cut since 1997, apply
to all of its HIV meds but the most significant will be on Ziagen syrup
which is recommended by the World Health Organisation for use in
first-line and second-line regimens within resource-limited settings,
particularly for children. The new price per pack was lowered by almost
40 percent to $15.08.

The average reduction among the 14 meds is 21 percent and Glaxo sys the
cuts will take effect immediately for public sector customers and
not-for-profit organisations on the United Nations list of 'Least
Developed Countries' and Sub-Saharan Africa, a total of 64 countriesl.
The meds are also available to projects financed by the Global Fund to
Fight AIDS, Tuberculosis and Malaria and by President Bush's Emergency
Plan for AIDS Relief, otherwise known as PEPFAR.

In discussing the move, Glaxo says the price cuts reflect "including
improvements and efficiencies in manufacturing and supply, and
reductions in the costs of active ingredients"

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3 Comments

1.February 20th, 2008 at 10:48 am
Bob Freeman

Interesting piece-I don't think the reduction in
manufacturing/distribution costs is the underlying reason for the
pricing decision. Rather, I see this as a way to maintain control of the
products per se and a way to avoid compulsory licensing by making it
less attractive for generic suppliers to enter the market. (I'm not all
that convinced either that price concessions are sustainable in the
long-term.)

I am more impressed with Roche's corporate decision to forgo patent
registrations in these countries as well as their commitment to building
a manufacturing and distribution networks in those countries.

2. February 20th, 2008 at 11:02 am
truthman

How kind of Glaxo... Good PR Move... That's about all it amounts to...

3.February 20th, 2008 at 11:08 am
Bob Freeman

Agree, Truthman. Certainly nothing new.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/

E-DRUG: Pharmalot: Glaxo Cuts Prices On AIDS Drugs For Poor Nations (2)
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The fact that Glaxo is cutting its prices on AIDS drugs is welcome, though
like all price discounting, it might reduce incentives for generic entry.
However, the other part of the story that rarely gets reported is that
Glaxo is achieving significant cost advantages through economies of scale,
but none of those cost savings are passed on in rich country markets where
it continues to raise prices whenever it can.

Brook

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115
617-373-3217 (office)
617-259-0760 (cell)
E-mail: B.Baker@neu.edu