As reported in the Daily Telegraph, the global pharmaceutical company, GlaxoSmithKline (GSK) is well prepared to take cuts in pharmaceutical drug prices as government budgets are squeezed.
At yesterday’s annual meeting, Andrew Witty, GSK’s Chief Executive, reassured stakeholders that the pharmaceutical company was already experiencing prices cuts of 3% and that it was something they ‘were used to.
Witty stated, ‘We are moving into unpredictable times. Just in the last week, we have seen the government in Greece cut prices by 24% and Germany cut prices by 10%
Witty also recognised that these price pressures mean it is even more important that GSK offered “value-for-money propositions on great medicines that make a difference to people’s lives and are priced at a level for government’s to purchase.
Pharmaceutical investors have recently been focusing their attention to the US, where health reforms are also driving down prices. Not only that but in Greece new regulations have been introduced resulting in cuts of up to 27% for the highest priced pharmaceutical drugs.
However, Citi yesterday stated that GSK had only 21% of sales exposed to potential European drug price action, the second lowest in the sector, “GSK is helped by the high level of sales from vaccines, over-the-counter and also its solid geographic mix.”