The Economic Times reports that Lilly will experiment with pricing models for its drugs in India. I think this is smart. Afterall, Lilly is looking at a very DOWN revenue year with Zyprexa already off paent and Cymbalta off wihtin the past month. It has a myriad of well publicized pipeline failures and times ae tough.
The company recently announced that it has designs on being among the top 20 drug companies in India in the very near term. With that in mind, and with all their other economic challenges, why not take a bold move to do someting different with pricing? Clearly, India and other developing nations have made it increasingly clear that their regions/governments cannot bear the costs of Western pricing models for their large and often poor populations. Who can affort multi-hundred thousand pricing for the latest cancer drug or rare disease biological? Even the more mainline cancer biologics ae often well out of economic range of the average developing nation citizen.
So it seems to me that Lilly is in a good place to experiment. Perhaps they will develop models they can use throughout developing nations to be a power in that sphere. Certainly, a systematic exploration of the possibilities is warranted given their economic/competitive state and the stated aims of these governments and advocates. Perhaps, there is a chance that this type of pricing could just erode the attractiveness of these markets more rapidly, but that should be a controllable risk and the upside could be much greater for Lilly and in satisfying demand within these populations for more affordable drugs.
Posted by Bruce Lehr Jan 23rd 2014.