Indian drugmakers have had a hard time tapping into the Chinese market. But U.S. pricing pressure and China's recent policy changes aimed at further bringing down drug costs have intrigued some top Indian players.
There are a couple of ways to deal with government drug price cuts. Throw up your hands and figure you will see revenue fall, or see it as an opportunity to grow volume. GlaxoSmithKline ($GSK) has chosen the second course for hepatitis B drug Viread in China, where it negotiated a deal to cut the price of the drug by two-thirds.nnChina, trying to lower its soaring healthcare costs, has been negotiating lower prices on some of the better selling drugs in the country in exchange for an indication that it will increase the volumes of the drugs it buys. Glaxo has agreed to cut the price of Viread--a Gilead Sciences ($GILD) hepatitis B drug that GSK sells in China--to 490 yuan ($75) a month from 1,500 ($229). But it acknowledged in an email that the new price represented a chance to increase sales because Viread will now be included under China’s reimbursement policies and patients will not have to pay out of pocket for the drug.