Summary of the “Cancer Drugs Get Cheaper, in India”

Summary of the “Cancer Drugs get cheaper, in India”

Roche Holding AG, a drug producer in Swiss is planning a new strategy to survive their products from severe competition in generic drugs industry and fast-growing economy. They aim to expand the market in India, in which there is a relatively large number of potential customers due to the huge population.

The new strategy is focusing on cutting the price of the two cancer drugs, Herceptin and Mabthera in India market to survive from the fierce price competition and to gain more market share in generic drug industry. However, this decrease of price leads to the shift on Swiss drugs producers since they are supposed to charge the same price for the same medications in various countries. This problem will lead to the cutting price in all the other countries, which is a severe loss of profit. Therefore, Roche is planning to give a new name of the two cancer drugs to remain the price power in other countries. For the new names, Roche aims to choose the one that haven't been revealed and are subject to Indian approval. This can avoid wholesalers to purchase the Indian products and resell them at a higher price in other countries, where the new brand names won't be licensed for sale.

Another reason of cutting the price is that it could prevent other generic drug producers in India from legally copying their product and selling it at a lower price, which would challenge the market share of Roche. Tuygan Goeker, head of Middle East and Asian markets at Roche has specified that the plan of cutting price would be initiated next, although the specific amount has not been announced. Mr. Goeker also stated that the package of the two drugs would be changed as well by India-based Emcure Pharmaceuticals Ltd.

Despite all the benefits resulted from the cutting-price-strategy, The low price of drugs in India market would still lead to a couple of troublesome problems. It is hard to prevent Indian level price products...