Drug prices in China to be lowered further due to GSK controversy

Drug prices in China to be lowered further due to GSK controversy

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After the controversial Glaxo SmithKline (GSK), there are expectations that the drug prices which can be lowered. The investigations on the drug company has deepened. On July 25, 2013 it was announced by the Ministry of Public Security in to GSK China?s suspected bribery. The investigation is being progressed by the GSK?s cooperation.

GSK china

It was earlier reported that some of the senior executives of GSK China had come to a secret understanding to offer large bribes to increase the prices of drugs which will lead to expansion in sales, and seek illegal profits. Earlier GSK had planned to restructure its operations so as to cut down operational costs.

Current investigations have revealed that the cost of GSK China?s commercial bribery accounts for about 30 percent of its drug prices and means that the prices could have dropped by 30 percent. On July 22, 2012 GSK said that the savings made due to the proposed change to the operational model will be passed in the form of price reductions and ensures medicines and are more affordable to the Chinese patients.

At the beginning of this month, the National Development and Reform Commission had carried out the investigations on several drug companies which included GSK China. The probe was related to the drug companies production costs.

Photo Credits: Asia Daily Wire