GSK intends to halt market share decline

The launch of new products, the development of vaccines, along with the production of a new drug at the plant in Brasov, are the prime targets David Lechleiter, the new general manager of GlaxoSmithKline Romania, has set for himself to fulfil.
“Of course I have a main target, namely stopping the company’s market share from declining and then boosting it. I believe this is expected of me as general manager, in a country we’ve heavily invested in. There are many countries, in which we operate, where we haven’t invested in production or distribution and these countries are proving to be more profitable than Romania,” says David Lechleiter in his first interview with ZF after he was appointed head of operations in Romania.
Before David Lechleiter’s appointment with GSK Romania, he held the position of general manager of GSK Slovenia and takes over the position from Roberto Musneci. According to Lechleiter, the volume of capital investments operated by GSK in Romania has reached a total of around $83 million (66.4 million euros).
The British company’s share of the Romanian market has gradually shrunk from 10.9% in late 2004 to 8.1% at the end of last year, according to data recorded by Cegedim.
One of the main factors that pushed GSK’s market share down is the policy of setting drug prices at extremely low levels, a move intended to protect consumers, according to GSK representatives.
“Now that Romania has joined the EU, we will see the first changes in this respect because such a policy becomes hard to sustain,” says Lechleiter.
According to Lechleiter, the setting of lower prices can give rise to drug production below quality standards.
This year, the company intends to focus on the development of vaccines, a field in which it has an international reputation.
GSK also plans to bring 3 or 4 brand new products onto the domestic market. At present, GSK’s portfolio in Romania is made up of 110 brands and 233 pharmaceutical products. The best selling GSK products are Augmentin and Seretide.
Additionally, a new strategy is beginning to shape up for the plant in Brasov. Whereas so far the main part of production has been destined to the domestic market, starting this year production will begin to address the international market.
“Starting this year, we’ll try to address a global market. We will try and see whether we can produce at international standards and costs. This year, the plant of Brasov will begin manufacturing a new product – an antibiotic,” adds the GSK representative.
According the general manager, the only way to make this business competitive is to produce in very large volumes. Concerning the domestic market, Lechleiter says it lacks financial discipline and is characterised by a high degree of volatility, which makes many companies reconsider investments, despite the huge growth potential.