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AFRICA: GSK to cut vaccine price after ‘profiteering’ claim

by Andrew JackFinancial Times
November 20th, 2010

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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