DRUGS companies must behave "in step with society" by reducing their prices to help improve healthcare in developing countries, according the head of one of the world’s biggest pharmaceuticals businesses.

Andrew Witty, chief executive of GlaxoSmithKline (GSK), said the industry too often acts “as though it is detached from society“ and should start putting people before profits to increase public trust.

He made the comments as his company, which employs more than a 1,200 people in the North East and Cumbria, revealed a change in its business model that will see the implementation of a tiered pricing structure – with drug prices aligned to a country’s ability to pay.

He said: “To be successful in the long term, we have to operate in a way that is in step with society and its expectations. Today public trust in all big institutions, including governments and business, is challenged.

“I believe industry, including the pharmaceutical sector, sometimes hasn’t helped itself by operating as if we were detached from society.”

Witty said GSK would be offering its rotavirus vaccine to developing countries for a fraction of its Western market price.

The Rotarix vaccine, which prevents diarrhoeal disease – a deadly bug responsible for killing more than half a million children annually – will be made available to poor nations for £1.50 a dose rather than £30.

Profits made in developed countries will be partly used by GSK to subsidise any losses made in their developing counterparts.

“I hope this will enable millions of children to receive this important vaccine, saving countless lives in the future,” added the chief executive.

Witty said the move was “not a gimmick or one-off philanthropic gesture, but part of a concerted strategy to change our business model“.

He added: “Specifically, we are aligning our commercial success with doing what we can to tackle the healthcare needs of people in all countries, including the poorest.”

Andrew Mitchell, the International Development Secretary, said the Government and the pharmaceutical industry are “locked together“ in providing greater assistance in preventing the spreads of diseases in the world’s poorest countries.

“I hope that the entire industry will follow the path down which Andrew Witty and GSK is blazing a trail,” he said.