French drug giant Sanofi Aventis is in talks with the UAE’s Ministry of Health to introduce a tiered pricing policy for its diabetes drugs, in an attempt to widen access among the country’s lower-income residents.
Dr Robert Sebbag, vice president of the firm’s Access to Medicines programme, said the proposed plan would see poorer residents, such as labourers, receive discounted diabetes treatments, while the remainder of the population paid market price.
One in four residents is thought to have diabetes. At 19.5 percent, the country’s adult incidence of the disease is surpassed only by Nauru, the world’s smallest independent republic.
Lessons can be learned on many fronts here.
Sanofi Aventis is proud of its Access to Medicines programme. It is even ranked No. 5 on the global Access to Medicines Index. (http://www.atmindex.org/index/2008) Its drug donations top out at 5 on the Index.
Dr Robert Sebbag warned however revenue would need to stay high across the market to subsidise the cut-price plan.
“We cannot jeopardise the normal product. To facilitate this sort of policy, you need profit in one side and a no-profit, no-loss price for the rest of the [poorer] population,” he said. “Drug donation is not a sustainable solution.”
We do agree with his last statement, drug donation is not a sustainable solution. But neither is “no-profit, no-loss” pricing. Sanofi Aventis is still focused on per unit pricing under the guise of touting a “market price.”
Please. The idea of a market pricing for pharmaceuticals has only a glimmer of reality, and only in those countries where lobbying has been active. Even in the US, where the industry’s lobbying efforts have been very successful, it would be a hard chore to defend true “market pricing.”
What Sanofi Aventis appears to be saying in the UAE is that the richer populace will pay for the less rich, or poor, but they won’t lose money on the poor, and this is necessary to balance out the market. (Here is the US we here this argument daily. The position goes like this: because big pharma can only sell at price points in the developed west, they rely on “market pricing” in the US to make up for the “losses” and support R&D.)
Old pharma struggling to learn new models.
As noted above, Nauru is the only country with a higher incidence of diabetes than the UAE. Nauru however might have more in common with the UAE than diabetes. It is another commodity dependent, exporting country and its main export, phosphate, is soon to run dry, so to speak.
Sanofi Aventis is also acting like a commodity dependent, exporting country. It is simply trying to maximize its pricing before the well runs dry….or make that patent expiration……HK