Drug companies cut vaccine prices in search of a more humane business model

Date: 6 Jun 2011

Several major pharmaceutical companies have announced major cuts in the price for their vaccines in the developing world ahead of a conference in London.

GlaxoSmithKline, for whom the announcement is just the latest step on a series of such reductions, said that it would cut the price of its vaccine for rotavirus in poor countries - $2.50 per dose rather than $50 in developed markets. The rotavirus bug is responsible for killing more than half a million children every year.

GSK has also said it is very close to developing the world's first malaria vaccine - another initiative that has set it apart from some of the other companies, because there is no market for it in the West and therefore limited capacity to cover the research and development investment.

Andrew Witty, GSK chief executive said the move was part of "a concerted strategy to change our business model." Profits made in developed countries will be partly used to subsidise any losses made in the poorer world.

He added that the pharmaceutical industry had not helped itself in the past by operating as if it was detached from society.

Other companies making reductions include Merck, Johnson & Johnson and Sanofi-Aventis.

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