British pharmaceutical giant GlaxoSmithKline recently announced plans to cut the price of a rotavirus vaccine by 95 percent for the world’s poorest countries.
GSK CEO Andrew Witty urged other pharmaceutical companies to follow suit and said the price cut was not a gimmick or one-time philanthropic gesture, according to AFP.
The new pricing system will apply to the Rotarix vaccine, which is used to treat rotavirus, a chronic diarrheal infection that kills an estimated 500,000 children each year worldwide, predominantly in Asia and Africa.
The company said that it intends to use profits made in wealthier countries to subsidize drugs for poorer nations, selling them at a price that covers just the cost of production. Witty said the plan is part of a concerted strategy aimed at changing GSK’s business model.
"To do this we can't just be a donor," Witty said, according to AFP. "We have to create a better and more sophisticated model, one that combines commercial success with long-term sustainable contributions. This is how we can help improve the health of people wherever they live."
Despite a recent slump in product sales, GSK announced in April that its net profits rose 14 percent in the first quarter to $2.5 billion.