AFRICA: GSK to cut vaccine price after 'profiteering' claim

Publisher Name: 
Financial Times

GlaxoSmithKline is to discount significantly its pneumonia vaccine for private customers in Africa after claims from a medical charity it is "profiteering" by charging western prices.

The UK pharmaceutical group is reviewing its price after attacks from Médecins sans Frontières (MSF) that it is promoting its Synflorix pneumococcal vaccine to Ugandans willing to pay $50 per dose from their own pockets.

The $50 price offered since launch in Africa this month contrasts with $7 per dose it will charge governments in poor countries for use in public sector clinics through a donor-supported programme set to begin in December.

It contradicts a commitment made earlier this year by Andrew Witty, GSK's chief executive, to introduce discounted or "tiered pricing" to ensure its products are made widely available to the world's poor.

The spat highlights tensions that are likely to grow as drug companies
including GSK stress their commitment to providing drugs and vaccines
affordably to the poor while still trying to generate profit from
customers able to pay more.

Mr Witty has advocated a sharp increase
in the amount of tiered pricing between countries while also
experimenting with discounts internally, so drugs are sold cheaply to
the poorest and at higher prices to the growing middle classes.

Uganda
has yet to seek funding from the Global Alliance for Vaccines and
Immunisation, the UN-backed body that is channelling donor funding to
buy pneumococcal vaccines at a deeply discounted price of just $7 a
dose.

Daniel Berman, deputy head of the access campaign at MSF, said GSK should provide its single dose Synflorix product at $7.

The product has already been authorised in Uganda for sale to the private sector at $50.

He said it was "a bit unethical" for the company to be involved in
campaigns in Uganda alongside public health officials to promote its
sale at a higher price.

GSK said that it would reduce its prices in
Uganda now MSF had pointed out they were at European levels, in
contradiction with its own tiered pricing policy.

However, it denied it was "front-loading" the private market in Uganda, which it said was "minuscule".

It stressed its commitment to "ensuring African babies get the vaccine as quickly as possible".

GSK supported World Pneumonia Day events in Uganda, including funding for
immunisation cards which include a space for pneumococcal vaccination,
although it may not be available in public clinics before 2012.

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