London: Europe is undermining drug innovation by cutting prices, raising barriers to new medicines and “freeloading" off others in Asia and the United States who are more willing to pay, the boss of Pfizer, the world`s largest drugmaker, said.
European governments are sacrificing the long-term future of science in their countries for the sake of short-term budget cuts, chief executive Ian Read told Reuters on Monday.
“There is a disconnect in Europe between the marketplace for pharmaceuticals and the desire of European governments to have innovation and research," he said in an interview.
“Europe is not paying its fair share of innovation."
Tensions between large drug companies and European governments have been rising for several years as administrations across the region face the challenge of curbing the rising costs of healthcare in tough economic times. Governments are by far the biggest buyers of medicines in Europe, allowing them to dictate prices.
The common European practice of cross-referencing to medicine prices in other countries means that exceptional price cuts in Spain or Greece will trigger knock-on cuts elsewhere.
Modern medicines for complex diseases like cancer can be hugely expensive and many governments in Europe have also put other mechanisms in place, such as Britain`s cost-effectiveness watchdog the National Institute for Health and Clinical Excellence (NICE).
Read hit out at governments who have slashed drug prices and racked up close to $20 billion in unpaid bills for medicines, largely in southern Europe, saying their increasing reluctance to pay up for innovative therapies would come back to haunt them.
“The pharmaceutical industry requires a vibrant marketplace. It`s a high-risk business ... and a high-risk business needs the potential for high returns. So in the end, European leaders are sacrificing the long term for the short term," Read said.
GlaxoSmithKline Plc Chief Executive Andrew Witty said last month he now ranked Europe behind the United States and Japan as a market where he would want to launch new products.
Bayer AG CEO Marijn Dekkers has also expressed concern about Europe`s direction, noting in a recent results presentation that the money earned from today`s drugs was needed to pay for developing the medicines of tomorrow.