Astra sets lower price for launch of latest ulcer drug

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The Independent Online

AstraZeneca, the pharmaceuticals group, yesterday set out its initial pricing policy for this month's launch of Nexium, its lead drug, as it unveiled a costly marketing push for the new ulcer treatment.

AstraZeneca, the pharmaceuticals group, yesterday set out its initial pricing policy for this month's launch of Nexium, its lead drug, as it unveiled a costly marketing push for the new ulcer treatment.

The group said the standard Nexium dose will be priced at a 10 per cent discount to the standard dose of Losec, the AstraZeneca drug which it replaces and which is already coming off patent in some countries.

Analysts had expected Nexium to be priced at a premium because of the company's claims of its superiority over its predecessor. The pricing policy applies only to the launch in Sweden on 14 August, and is to be reviewed for other countries.

Tom McKillop, chief executive, said: "We believe Nexium's better and we want it to be taken up quickly. We don't want price to be a barrier. The reality today is that price is more important than it was." He expected sales of Nexium to exceed those of Losec despite a broader lower price policy because it would take share from other drugs in its class.

AstraZeneca yesterday unveiled half-year pre-tax profits up 19 per cent at $2.4bn on sales up 8 per cent at $9.5bn, driven by demand for Zestril, a cardiovascular drug, and Seroquel, the schizophrenia treatment. Sales of Losec fell 1 per cent to $1.38bn in the second quarter as the drug lost share in the United States.

The launch of Nexium in six markets this year - Sweden, Britain, Denmark, Norway, Germany and Ireland - and in the US in 2001 alongside other drugs, will see AstraZeneca spend an additional $320m (£214m) this year on marketing, including the recruitment of 1,300 staff in the US. "We don't want to look back in three years and wish we'd done more to push Nexium from the beginning," said Jon Symonds, chief financial officer.

Marc Booty, analyst at ABN Amro, said: "AstraZeneca is betting the house on Nexium."

The marketing drive will also support the launch of the group's "superstatin" cholesterol-lowering drug.

The group is maintaining its 25 per cent margin target this year having accelerated the cost-cutting programme from the founding merger of Astra and Zeneca. It expected to save $600m, some $100m more than expected this year.

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