Novartis and other pharmaceutical giants call for higher medicines in the EU
Swiss Novartis and French Sanofi, two largest European pharmaceutical players, are increasing pressure on the European Union to raise the prices of medicines on the old continent. In an open letter published in a British newspaper Financial Timesthe main executive of both companies claim that prices in the EU should be more reflected in those in the United States in order to encourage investments and innovations in the region, which in their opinion is losing competitiveness.
The Chief Executive Director of Novartis You narasimhan and his colleague at Sanofi Paul Hudson They point out that current low drug prices in Europe inhibit growth and reduce the attractiveness of innovation for the pharmaceutical industry. As they wrote, higher prices promote innovation and much -needed investments in the European pharmaceutical sector. They point out that the competitiveness of European pharmaceutical companies is declining, and uncertainty about potential US customs duties further discourages investments in the EU.
In 2024, the salary of Novartis’s Chief Executive Director, Vasanta Narasimhan, reached a record 19.2 million Swiss francs (about € 20.2 million). According to the counseling company for pension funds, which is being referred Swissinfo.ch, This is the highest paid salary to the director of Novartis since 2009.
In 2024, the salaries of Novartis’s Chief Executive Director, Vasanta Narasimhan, reached a record 19.2 million Swiss francs. Photo: Yves Herman/Reuters
Their requirements at prices closer to the American ones echoes in a broader context of concerns about the European pharmaceutical industry. Also Pascal SoriotCEO of Astrazenec, is reported by a news agency Reuters urged Europe to strengthen its « health sovereignty ». According to him, Europe is devoting a significantly lower share of GDP to innovative drugs than the US, and consequently lags behind in attracting investments in research, development and production, which threatens its ability to protect the health of its own population.
In their letter, Zarasimhan and Hudson propose a concrete measure: determining the European Reference Catalog Price for New Medicines, which would be « in the US net prices » (prices actually paid by discounts), as needed by additional rhabies for some countries. This is a much bold proposal than the one in the previous letter, signed by more than 30 leaders from the pharmaceutical industry in early April (including directors Astrazeneca, Bayer, Eli Lilly and New Nordic) and addressed to the President of the European Commission Ursulo von der leyen.
Although the letter called for a consideration of price policy in the light of US Customs’ threats, it did not contain such specific proposals, states Reuters. According to sources near the industry it gives ReutersPaul Hudson already criticized the European governments at a meeting with von der Leyenu because they are not paying enough for innovation.
It is known that the prices of medicines in the US are significantly higher – according to the US government, they pay almost three times as much as a comparable developed country. Photo: Leon Vidic/Work
In the financial year 2024, the pharmaceutical company Novartis created the following results from the continued business (after the secession of Sandoz), as follows from the published data of 31.
– net profit: about $ 11.0 billion ($ 11.9 billion)
– operating profit: about $ 13.4 billion ($ 14.5 billion)
– core net profit: about $ 14.6 billion ($ 15.8 billion)
– Surely operating profit: about $ 18.0 billion ($ 19.5 billion).
The purpose of the core financial results is to show the basic, fundamental or repetitive business performance of the company, so that from standard results, they eliminate some items that the management considers is not part of a regular business or could distort a picture of actual operational efficiency.
It is paradoxical that calls for higher prices in Europe appear simultaneously with reflections in the US about approaching US prices international prices. It is known that the prices of medicines in the US are significantly higher – according to the US government, they pay almost three times as much as a comparable developed country. European governments are directly negotiating with manufacturers for lower net prices, which are often not publicly known. Meanwhile, Trump’s administration is reportedly reported Reuters Thinking about binding American prices to those in other developed countries, which would be a challenge for an industry that creates much profit in the expensive US market.
According to the company, Novartis has more than 3500 employees in Slovenia. Photo: Leon Vidic/Work
Nevertheless, the United States is currently experiencing a wave of announced pharmaceutical investments, partly in response to tariff uncertainty. The Swiss Roche has announced $ 50 billion investments in the next five years, Novartis promised $ 23 billion (about 19 billion Swiss francs) for production and research and development, and major investments are also announced by US companies Eli Lilly and Johnson & Johnson. On the contrary, Novartis and Sanofija, the director of Novartis and Sanofi, warn that, due to low prices and bureaucracy – they also urge the end of national measures that restrict market volume, and to eliminate prices for new medicinal indications – loses its attractiveness. They also emphasize the increasing competition from China, the second largest pharmaceutical market.
According to its spokesman, the European Commission is aware of the strategic importance of the pharmaceutical industry and seeks to « make the market more attractive ». However, the debate on the prices of medicines remains extremely sensitive, as European institutions must weigh between the provision of treatment for citizens and the promotion of an industry that is crucial for innovation and public health.
