GlaxoSmithKline boss says new drugs can be cheaper

* Improved R&D productivity can be passed on as lower prices

* GSK CEO says $1 bln drug development cost a "myth"

By Ben Hirschler

LONDON, March 14 (Reuters) - The pharmaceutical industry should be able to charge less for new drugs in future by passing on efficiencies in research and development to its customers, according to the chief executive of GlaxoSmithKline Plc .

"It's not unrealistic to expect that new innovations ought to be priced at or below, in some cases, the prices that have pre-existed them," Andrew Witty told a conference on healthcare in London.

"We haven't seen that in recent eras of the (pharmaceutical) industry but it is completely normal in other industries."

High prices for new medicines, most notably in cancer care, are a growing challenge for healthcare providers, particularly in austerity-hit Europe where government budgets are under pressure.

Traditionally, drug companies have argued that premium prices are needed to pay for the $1 billion-plus cost of developing a single new medicine.

But Witty said the $1 billion price tag was "one of the great myths of the industry", since it was an average figure that includes money spent on drugs that ultimately fail.

In the case of GSK, a major revamp in the way research is conducted means the rate of return on R&D investment has increased by about 30 percent in the past three or four years because fewer drugs have flopped in late-stage testing, he said.

"If you stop failing so often you massively reduce the cost of drug development ... it's why we are beginning to be able to price lower," Witty said.

"It's entirely achievable that we can improve the efficiency of the industry and pass that forward in terms of reduced prices."

The average cost of developing a new medicine, including failures, is now $1.1 billion, according to a December study of R&D productivity among the world's 12 top drugmakers by Deloitte and Thomson Reuters.

But the performance of individual companies varies widely. For the most successful company in the group studied, the average cost was just $315 million, while at the other extreme one firm spent $2.8 billion.

Overall, the industry is having more success in bringing new drugs to market, with 39 new drug approvals in the United States last year - a record only beaten in 1996.

In addition to improvements in research, global demand for medicines is increasing and the explosion in the volume of products sold in emerging markets should contribute to lower unit costs, Witty said.

GSK has for some years adopted a strategy of offering lower prices in less-developed markets in a bid to balance volume against price and maximise overall sales.

(Editing by David Holmes)

((ben.hirschler@thomsonreuters.com)(+44 20 7542 5082)(Reuters Messaging: ben.hirschler.thomsonreuters.com@reuters.net))

Keywords: GLAXOSMITHKLINE PRICES/

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GlaxoSmithKline unit joins patent pool for AIDS drugs

* ViiV Healthcare places paediatric abacavir in patent pool

* Move follows earlier sign-up to pool by Gilead Sciences

LONDON, Feb 27 (Reuters) - GlaxoSmithKline's HIV/AIDS drugs business is to share intellectual property rights on children's medicine in a patent pool designed to make treatments more widely available in poor countries.

ViiV Healthcare, majority-owned by GSK, is the second research-based pharmaceutical business to sign up to the new Medicines Patent Pool, following a lead set in 2011 by Gilead Sciences.

Although more than half of people living with the human immunodeficiency virus (HIV) that causes AIDS now get the drugs they need - thanks to a major roll-out of treatment in Africa - an estimated 6.8 million still go without, according to UNAIDS.

The Medicines Patent Pool (MPP), launched in 2010 by the UNITAID health financing system that is funded by a levy on airline tickets, aims to address the remaining gap by getting patent holders to share know-how with makers of cheap generic drugs.

In the case of ViiV, a key paediatric medicine known as abacavir will be made available to generic manufacturers which will be able to take a licence to make and sell it in 118 poor countries, the patent pool said on Wednesday.

ViiV and the patent pool have also agreed to negotiate further licences that will allow generics firms to manufacture low-cost versions of an experimental drug, dolutegravir, that is currently awaiting regulatory approval in Western markets.

There are 3.4 million children living with HIV worldwide but only 562,000 have access to medicines. Treating them is challenging because many drugs are not adapted for use in children.

Abacavir and dolutegravir are both seen as priority products for fighting HIV in poor countries. ViiV also sells other older drugs, some of which are already off patent and available as cheaper generics.

ViiV - which is owned 76.5 percent by GSK, 13.5 percent by Pfizer and 10 percent by Shionogi - only signed up to the patent pool after lengthy negotiations.

Some other major drugmakers have yet to join.

Bristol-Myers Squibb, Roche and privately owned Boehringer-Ingelheim are currently discussing plans to join the scheme, but Abbott, Johnson & Johnson and Merck have so far remained outside.

J&J decided in November to take unilateral action by not enforcing its patents on HIV drug Prezista in a limited number of poor countries, in a move that disappointed campaigners who argued joining the pool would have been more effective.

(Reporting by Ben Hirschler, Editing by Kate Kelland and Mark Potter)

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