GSK to slash prices to appeal to lower income group in India

GSK to slash prices to appeal to lower income group in IndiaThe World' second largest pharmaceutical company GlaxoSmithKline (GSK) has announced that it will slash its retail prices for various medicines in India. The strategy behind this price cut in its drugs is to furnish to the lower-income group in the country.

Actually, there has been a significant growth in the share of low income group in GSK's overall India sales and that is what has triggered this decision. Commenting on the decision, The global CEO of GSK, Andrew Witty said in a press statement, "We have a flexible approach. The plan has already started globally and it is up to the Indian team how they do here".

The company stated that the price cut will not result in reduced margins as the cost reduction will be achieved through operational efficiency.

Witty also admitted that the company is planning to invest a huge sum of Rs. 430 crore in developing local vaccine facilities in the country. Acquisitions and Joint ventures of other Indian pharmaceutical companies is also on GSK's cards, provided they come at a reasonable price. In fact, the company backed out from a few such potential deals because it felt that the valuations in these deals were not justified. But the company is hopeful of striking some meaningful deals in India sometime soon.