Novartis Chief Executive Vasu Narasimhan said Europe needed a “complete rethink” of how medicines are priced, warning that it could delay the entry of new medicines into the market.
In his comments on Tuesday, Narasimhan echoed calls from leaders of other European drug companies, including Roche and AstraZeneca, who have criticized Europe’s health policy for stifling innovation.
Roche CEO Thomas Schinecker last week called Europe’s bureaucracy and overregulation “alarming” and warned that the continent was falling further behind the United States and China as industry innovators.
The criticism comes after industry leaders including Novartis, Roche and AstraZeneca struck most-favored-nation (MFN) pricing deals with the United States, and President Donald Trump called on other rich countries to pay their “fair share” for medicines.
Germany announced reforms earlier this month that would cut health care costs by billions of dollars and introduce discounts on branded medicines.
“We have been a significant investor in Germany for decades, and more broadly, the pharmaceutical industry is one of Europe’s largest employers and sources of innovation,” Narasimhan told reporters on a conference call Tuesday as Novartis released first-quarter results. “Such policies would send the wrong signal to highly innovative industries like ours, where the United States and China are actively investing in the biotech ecosystem to improve their competitiveness.”
Meanwhile, the US recently entered into a partnership with the UK to waive tariffs on medicines exported to the US in exchange for Britain spending 25% more on new medicines.
Backing up Narasimhan’s warning that there could be delays in access to new drugs in Europe, a recent report from GlobalData showed that new drug launches in Europe have fallen by 35% since President Trump launched his MFN plan last May.
“We’re working with governments, not just in Japan but across Europe, to hopefully get to a better situation. I think there needs to be some urgency here because I don’t think we’re seeing progress at the pace that we would have liked,” Narasimhan said. “Across the industry, I expect companies to be forced to make difficult decisions in terms of how they set up and ultimately move forward with their operations.”
Narasimhan said it was imperative that other countries in Europe increase their health spending because President Trump’s most-favored-nation system is tied to what other rich countries pay for medicines.
“What is critically important now is that we continue to appeal to European governments to ensure that they reward innovation appropriately and to avoid policies that make it virtually impossible for companies like ours to continue to invest in clinical trials and manufacturing in Europe,” Narasimhan said. “Europe needs a healthy ecosystem, and this will require a complete rethinking of how reimbursement systems work on the continent.”
