[Ip-health] Pfizer CEO Ian Read says Europe is "freeloading" off others in Asia and the United States
james.love at keionline.org
Wed Mar 14 15:22:15 PDT 2012
This is what Pfizer CEO Ian Read thinks of Europe. You can tell him what
you think by writting him at ceo at pfizer.com
Pfizer's Ian Read: Europe Is Undermining Drug Innovation
By Kate Kelland and Ben Hirschler
March 13, 2012 9:58 AM EDT
LONDON (Reuters) - 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.
Tensions between European governments and large drug companies like Pfizer
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.
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
POLISH PRICES FOR GERMANY?
Pfizer's Read singled out Germany for particular criticism, pointing to
Berlin's recent decisions to extend drug price freezes from 2010, which
were initially designed as an emergency measure, and to use a basket of
countries including Poland and Greece as a benchmark for how much it will
pay for drugs.
"What is the fundamental message there? They are saying ... investment in
innovation is at a level that Greek prices can support," Read said.
"That's not a recipe to create an innovative industry that can compete on
the world stage."
Read, who took over as Pfizer chief executive in December 2010 after the
abrupt departure of his predecessor Jeff Kindler, said he'd like to see
governments taking a longer-term view and engaging on the issue of who
should pay for the research and development costs of cutting-edge medicines.
Since Germany is one of Europe's wealthiest countries, Read questioned
whether referencing its prices to Greek or Polish levels would offer
drugmakers a fair return.
"These are the questions I'd like politicians to look at in a fundamental
way," he said.
Asked whether such discussions should take place as part of World Trade
Organization talks, he said they were not on the agenda at the moment, but
probably should be.
"Eventually I think it will have to be. The risk of freeloading is so great
in an industry with sunk costs," he said.
James Love. Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140. Sometimes I am
using my MaxRoam number: +447937390810
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