GSK Cuts Prices Again, but Generics Still Cheaper

After saying last year that its treatments for AIDS and malaria were as cheap as they could be, GlaxoSmithKline now claims that improved manufacturing practices and greater economies of scale allow it to reduce prices even more. And, if increased production volume leads to still greater economies of scale, the company hopes to cut prices even further.

GSK will reduce prices on its AIDS therapies by up to a third, including a 25 percent cut in the price of Retrovir (zidovudine), also known as AZT, and a 33 percent slash in the price of the combination medicine Trizivir. The price of its antimalarials Malarone (atovaquone/proguanil) and Halfan (halofandrine) will drop by 38 percent and 7 percent, respectively.

Customers eligible to buy the drugs at those prices include the public sector, not-for-profit nongovernmental organizations, the United Nations, aid agencies in the 49 countries defined by the United Nations as "least developed," and 14 others in sub-Saharan Africa. The UN-sponsored Global Fund-set up to finance the prevention and treatment of AIDS, malaria, and TB-will also benefit from the new prices.

According to recent figures from M裩cins sans Fronti籥s, however, generic versions of some of the medicines are still substantially cheaper. AZT from India's Aurobindo Pharma costs $140 a year, less than half the price of GSK's new price for Retrovir.

GSK is also seeking regulatory approval to supply the reduced-price medicines in different packaging from those sold commercially in the developed world. That would help prevent black market sales in countries where patients pay full price.