GSK adopts differential pricing to boost sales

The UK-based drug major is offering its medicines at variable prices in India, Morocco, South Africa and other developing nations, to tap into their large segments of middle class and low income groups. The new pricing system is said to be designed to generate a premium to recover R&D costs on new medicines from wealthier people in emerging economies without excluding those who cannot afford to pay. GSK is also offering Avandia, a medicine for diabetes at a low cost.

GSK believes that considerable gains can be achieved in both the social and economic fronts by offering drugs at a low price to a larger section of the population. By achieving greater volumes of sales, it can offset lower prices, and also help local governments utilize their meagre health resources in treating their most impoverished.