GlaxoSmithKline plc (GSK,GSK.L) is to cut significantly the prices of its drugs in emerging economies next spring, according to a report in the Financial Times on Sunday. The reductions are expected to cut prices in most developing countries to below two-thirds of western prices and reflect intensified efforts by drug companies to capitalize on demand from the faster-growing economies.
The FT report noted that UK-based GlaxoSmithKline and other companies have been forced to slash prices in recent months by healthcare systems in developing countries. Earlier in the year, the Philippines imposed sharp reductions for all drug manufacturers, while Turkey is now poised to demand substantial cuts.
Pharmaceutical companies have been criticized for catering to rich patients in poor countries who can afford to pay western prices, while leaving those in need without access to their products. The drug companies have argued that even very large price reductions would leave their medicines unaffordable to the poorest, while creating a risk of "diversion" of lower-priced products back to richer markets, which would undermine prices in the west.
GlaxoSmithKline has already reduced the costs of its cervical cancer vaccine, Cervarix, by as much as 50% in some countries in Asia. According to reports, Glaxo cut the prices of 28 products in March in the Philippines by 30%-50%.
In March 2009, GlaxoSmithKline announced plans work to improve access to medicines in the developing world. The plans include reducing prices for patent medicines in the least developed countries to no more than 25% of developed world prices, setting up a voluntary patent pool to aid research and development of medicines for neglected tropical diseases such as malaria and cholera, and reinvesting 20% of profits from selling medicines in the least developed countries to improving health infrastructure in those countries.
GlaxoSmithKline in June announced an agreement with India-based Dr. Reddy's Laboratories Ltd. (RDY) to develop and market selected products across an extensive number of emerging markets, excluding India. The products will be manufactured by Dr. Reddy's, and licensed and supplied by GlaxoSmithKline in various countries in Africa, the Middle East, Asia Pacific and Latin America. In certain markets, products will be co-marketed by both the companies. Under the terms of the deal, revenues will be reported by GlaxoSmithKline and shared with Dr. Reddy's as per the agreed terms. GlaxoSmithKline noted that the deal was a step forward to grow and diversify its business in emerging markets.
In late October, GlaxoSmithKline reported an increase in third-quarter profit to GBP 1.335 billion or 26.1 pence per share from GBP 1.027 billion or 20.0 pence in the prior-year period. Sales for the quarter grew 15% from last year, helped by favorable currency movements as well as demand for the company's flu products.
The company's revenue from emerging markets pharmaceuticals for the third quarter was GBP 765 million, up from GBP 581 million in the same period last year. Operating profit for the segment improved to GBP 291 million from GBP 216 million a year ago.
GSK closed Friday's trading session on the NYSE at $42.26, down $0.62 or 1.45% on a volume of 0.81 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.