AstraZeneca issues a warning to Europe about future access to innovative drugs. Against the backdrop of new pricing rules introduced in the United States and a European market considered increasingly less profitable, the Anglo-Swedish pharmaceutical group signals the risk of having to revise its marketing strategies. At the heart of the issue are the levels of healthcare spending allocated to innovative medicines, which the company considers insufficient compared to those guaranteed by the U.S. market.
PASCAL SORIOT’S WARNING
AstraZeneca could postpone or even not launch new drugs in the United Kingdom and the rest of Europe if higher prices for innovative therapies are not recognized. This was stated by CEO Sir Pascal Soriot in an interview with the Financial Times.
According to the executive, European countries will need to increase investments in next-generation medicines. Otherwise, the group would be pushed to focus much of its commercial activities in the United States, a market that accounts for about 45% of the company’s total revenues.
“It is sad and painful, but we would have no other choice. I have to take care of patients, but also shareholders, ensuring sufficient revenues to reinvest in our research and development and in the development of new drugs,” Soriot said.
THE EFFECT OF PRICING AGREEMENTS IN THE UNITED STATES
The statements come in a context characterized by pressure exerted by President Donald Trump’s administration to reduce drug costs in the United States. In the past nine months, numerous multinational companies in the sector, including AstraZeneca, have reached agreements that provide for a reduction of some prices in the American market.
These agreements are based on the principle of the so-called “Most Favored Nation,” according to which the price of certain medicines in the United States cannot exceed that applied in other developed markets such as Europe, Japan, and Canada.
This very mechanism has fueled concerns in the pharmaceutical industry. Several companies are considering the possibility of delaying the introduction of new products in Europe to avoid lower prices on the continent automatically resulting in tariff reductions in the United States.
THE SPENDING GAP BETWEEN EUROPE AND THE UNITED STATES
Soriot acknowledged that the commitment made by the United Kingdom to increase pharmaceutical spending within the National Health Service represents a step forward, although he still considers it insufficient compared to the sector’s needs.
The executive emphasized that Europe, including the United Kingdom, allocates about 0.4% of its gross domestic product to innovative medicines, a share that in the United States reaches about 0.8%.
“Forty-five percent of our revenues come from the United States. The United Kingdom accounts for 2%, as do France and Spain. Why should we risk 50% of our revenues if we cannot get a reasonable price in the United Kingdom or France?” he said.
THE NEW YORK LISTING AND INVESTMENTS IN THE UNITED KINGDOM
The executive’s words, writes the FT, were spoken shortly after the opening ceremony of trading on the New York Stock Exchange, organized to celebrate AstraZeneca’s direct listing on the American market completed in February.
The operation fueled speculation about a possible departure of the company from the London Stock Exchange. However, Soriot ruled out this hypothesis, reaffirming the group’s ties to the United Kingdom.
Confirming its presence in the country, in April AstraZeneca announced a £300 million investment to complete the expansion of the Cambridge research and development center. The group also announced the construction of a new laboratory in Macclesfield.
