GSK Launches Revolade and Votrient, Aims to Cut Indian Drug Prices by Up to 40%

GSK Launches Revolade and Votrient in India

UK major GlaxoSmithKline (GSK) has launched Revolade (eltrombopag) and Votrient (pazopanib) in India as it aims to match industry growth of 15–16%, Business Line reports. Both drugs will be marketed by the major's Indian oncology division and will be imported from the UK. Revolade will be available in 25-mg and 50-mg strengths, priced at 27,000 Indian rupees (USD608.12) per month for the 25-mg per day treatment regimen. Votrient will be available in 800-mg strength, priced at INR58,000 per month. GSK is expecting the two products to help push its market share up 2–3% in the next five years, with estimated revenues of INR200 million. The Indian oncology market is valued at approximately INR12 billion and is growing at a rate of 16–17%. Votrient is a kinase inhibitor indicated for the treatment of patients with advanced renal cell carcinoma, while Revolade is indicated for the treatment of immune (idiopathic) thrombocytopenic purpura (ITP) in adult patients (aged 18 years and over) who have had their spleen removed and have received prior treatment with corticosteroids or immunoglobulins.

GSK Adopts Tiered-Pricing Strategy in India

In other news GSK has announced it will sell its medicines at 25–40% discounts in India compared with prices in the US in a bid to increase sales volume and market share. The company will adopt the tiered pricing model which it rolled out in other emerging markets (see United Kingdom: 1 December 2009: GSK to Implement Price-Cutting Strategy in Emerging Markets), under which drug prices are based on the country's GDP and per capita income. This comes at a time the UK major is looking to improve access to medicine within its commercial regions.

Outlook and Implications

The launch of Revolade and Votrient follow the UK major's strategy of rolling out new products in India to consolidate and boost its position in the market (see India - Sri - Lanka - United Kingdom: 16 February 2011: GSK Consolidates Position in India Through Acquisitions and Product Launches, Acquires Rights to BMS Products in Sri Lanka). The monthly cost of Revolade in India is 54–76% cheaper than the European Union equivalent—against EUR1336.46 (USD1,918.76) in Germany for example. Meanwhile, Votrient is 75–80% cheaper than EU equivalents (at EUR4,630.46 in Germany) and 77% cheaper than the current US factory price of USD5,716.18 for a month's supply (price source: IHS POLI database). The roll out of the two products under the tiered pricing mechanism follows that of Tykerb (lapatinib) and vaccines Rotarix (against rotavirus diarrhoea) and Cervarix (targeting cervical cancer).

Although these are significant price reductions compared with the developed market, in Indian terms these prices are still beyond the reach of many patients, with about 70% of the population living below the World Bank poverty line of USD2 per day. This indicates the products will be aimed towards the 30% of the population covered by the private health sector, where income levels allow greater out-of-pocket expenditures, and the tiered pricing means that the higher the income levels the higher the price charged. Revolade and Votrient received Indian marketing approval in October 2010 approximately six months and one year respectively after European and US FDA approval. Previously, it was expected that the products would be launched six months after approval, however there has been a nine-month delay, probably due to hold-ups receiving import licences. With both Revolade and Votrient still under patent, launching the products in the Indian market could open them up to generic competition, as both drugs are highly differentiated products that cater to specific patient populations and offer potential future revenue growth for both GSK and Indian generic firms.

GSK is employing tiered pricing as the firm continues to face increasing generic competition and pricing pressures in the United States and developed markets, with close to 30% of its topline exposed to generic threats over the 2010–15 period. The strategy is essentially based on lowering prices to drive volume growth. So far, the company has focused on high-population markets such as Brazil (see Brazil: 18 June 2010: GSK Introduces 20-50% Price Cuts for Six Leading Drugs in Brazil), the Philippines (see United Kingdom: 12 June 2009: GSK Cuts Drug Prices in Emerging Markets But Rejects Russian Requests for Cheaper HIV Drugs), and even Kenya (see Kenya: 8 January 2010: GSK to Introduce Up to 40% Price Reduction for Two Drugs in Kenya).

For the full year ending 31 December 2010, GSK India reported a 10.2% year-on-year (y/y) increase in net profits to INR5.64 billion, with total income rising by 13.7% to INR21.62 billion. Although this represents a positive performance, it was below the average revenue growth of 15% experienced by domestic firms in India. New product launches are focused on the vaccine, oncology, cardiovascular, and metabolic segments, and on high-revenue products with growing demand, which will boost both the firm's Indian market portfolio and financial performance in the immediate-to-medium term. The focus on high-revenue, high-growth products in India is driven by the growing double-disease burden of both communicable and non-communicable diseases, increased government expenditure on vaccination programmes, increased health insurance coverage and investment in healthcare.