by Simeon Bennett and Trista Kelley
SANOFI-AVENTIS SA has slashed the prices of some drugs in Southeast Asia to tap rising rates of diseases including diabetes and cancer in the region.
Poor patients in Indonesia and the Philippines could save as much as half the price of drugs such as Lantus for diabetes and the cancer treatment Taxotere in those countries under a tiered-pricing program, Jean-Louis Grunwald, Sanofi’s head of Southeast Asia, said in Singapore.
Sanofi intended to expand the plan to countries in the region including Thailand, he said.
“Answering this need is a must,” Grunwald said in an interview Monday.
“Our capability to solve this access issue, together with other stakeholders, will define the success of our organization in this part of the world in the years to come.”
Sanofi joins GlaxoSmithKline Plc in tapping faster-growing developing economies by making medicines cheaper for poor people. Chief executive Chris Viehbacher, who took the helm in December 2008, has said emerging markets and diabetes products are two businesses that will propel sales at Paris-based Sanofi.
“In some cases very heavy discounting has been seen as commercial suicide, but yet sales volumes doubled or trebled as a consequence,” Mark Clark, an analyst at Deutsche Bank AG, said before Sanofi’s announcement.
“There have been concrete examples of a massive uptick in volumes in what appeared to be on the face of it a pretty significant price cut.”
Glaxo reduced the price of its cervical cancer vaccine Cervarix by 60 percent in the Philippines and gained a 14-fold increase in volumes, Abbas Hussain, the company’s head of emerging markets, told investors last month.
London-based Glaxo said in November it planned to cut prices in emerging markets to less than two-thirds of that in western countries.
Sanofi said it was working with Southeast Asian governments and patient groups under its Innovation for Life program to provide education on and increase access to the drug maker’s medicines.
Grunwald said Sanofi had seen an increase in patients getting its drugs under the plan.
The program would increase sales and profit, Grunwald said, without providing specific figures. He declined to say how much Sanofi charges for Lantus, a form of insulin.
“I’m not naive,” he said. “Our initiative has to be sustainable. We cannot do it at cost.”
Diabetes accounts for 5 percent of all deaths globally and almost 80 percent of them occur in low- and middle-income nations, according to the World Health Organization.
The number of diabetes patients in Indonesia might jump to 21 million by 2030 from 8 million in 2000, Grunwald said.
Lantus generated 2.3 billion euros of sales in the first nine months of 2009 for Sanofi, surpassing the blood thinners Lovenox and Plavix as the company’s top product. It’s the world’s best-selling diabetes medicine and faces generic threats as soon as 2014.
Sanofi gets about 26 percent of sales from emerging markets, the most among drug makers, according to Deutsche Bank’s Clark. Bloomberg
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(Published in the Manila Standard Today newspaper on 2010/january/13.)
