The leaders of two major European pharmaceutical companies have called for the European Union to allow drug prices to rise to levels comparable to those in the United States in a bid to attract more investment into the region. In a letter published in the Financial Times, the executives argued that U.S. drug prices, which are often nearly three times higher than those in other developed countries, set a benchmark for pharmaceutical companies seeking higher returns on investment. The letter highlighted the growing competitiveness challenges facing European biopharma and how uncertainty regarding tariffs has further reduced incentives to invest in the European market.
The pharmaceutical industry has long faced challenges related to pricing regulations in Europe, where drug costs are often controlled to make them more affordable to consumers. The executives argue that in the current economic climate, with increasing global competition and fluctuating trade policies, the EU needs to rethink its pricing strategy to remain competitive. The pharmaceutical leaders suggested that higher list prices for drugs, along with clear spending targets for innovative medicines, would help reward companies for investing in the research and development of new treatments. They believe this would also support the region’s biopharma industry by providing a more sustainable business model for the future.
The executives emphasized that Europe’s current pharmaceutical model—focused on producing drugs in Europe and exporting them to the U.S.—is no longer viable given the changing economic landscape. To remain competitive, they argued, the EU must strengthen its domestic market by adjusting its pricing policies to reflect the costs of developing and producing cutting-edge drugs.
In recent weeks, several major pharmaceutical companies, including Roche, Novartis, Eli Lilly, and Johnson & Johnson, have committed to large investments in the U.S. to take advantage of incentives offered by the U.S. government, particularly in light of tariffs that are designed to encourage domestic manufacturing. These moves reflect the growing trend of pharmaceutical giants shifting their focus towards the U.S., which they see as a more lucrative market due to its higher drug prices.
Meanwhile, U.S. authorities have warned drugmakers that they may soon link U.S. medicine prices to the lower prices paid in other developed countries, adding further pressure on European pharmaceutical companies to adjust their pricing strategies. The pharmaceutical executives have made it clear that without changes in the EU’s pricing model, the region could risk losing its competitive edge in the global biopharma sector.
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