Drug pricing pressures intensify in Europe as pharma companies call for price increases amid global trade concerns
In a letter to the Financial Times, the CEOs of Novartis and Sanofi urge European policymakers to rethink drug pricing frameworks amid mounting global trade pressures and a “new world order”.
While recent headlines have centered on drug pricing reform in the US, attention is now turning to Europe. In their letter, AstraZeneca CEO Pascal Soriot and Sanofi CEO Paul Hudson call for urgent action to make Europe a more attractive destination for pharmaceutical investment.
They point to a surge in biopharma investment announcements in the US (amounting to over $150 billion in recent weeks), which is contrasted by a notable absence of similar commitments in Europe. The executives warn that the region’s competitiveness is, “in jeopardy,” citing rigid pricing systems and ongoing uncertainty around US tariffs as key deterrents to investment. At the same time, China, now the world’s second-largest biopharma market, is strengthening its position and actively working to incentivize innovation.
The CEOs also caution that Europe’s traditional model – manufacturing medicines domestically and exporting them to the US – is no longer viable in today’s global context and “new world context”. Amid shifting trade dynamics and increased international competition, the region must focus on building a stronger internal market to remain globally competitive.
The letter argues that European price controls and austerity measures are undermining the region’s attractiveness to the pharmaceutical industry. Launch prices are kept low, growth of patented medicines is capped, and prices are cut even when new indications are approved. As Reuters previously reported, similar concerns were raised directly with European Commission President Ursula von der Leyen, with industry leaders calling for support to maintain operations in the EU in the face of threatened US tariffs. These calls included proposals for compensation to offset the costs of pharmaceutical innovation.
Although the CEOs welcome the European Commission’s efforts to streamline regulation – such as the new EU HTA regulation that came into force in January – they insist more must be done. They highlight data showing that over 30% of medicines approved in the US were still unavailable in Europe 2 years later.
To reverse this trend, Soriot and Hudson propose three key measures:
- Implement a Europe-wide list price for new medicines and indications that reflects their value, aligned with US net prices and adjusted via national rebates.
- Introduce a European-wide spending target for innovative medicines and vaccines, to ensure Member States increase support for R&D.
- End artificial caps on biopharma market growth and pricing for new indications, which they say creates a disincentive for innovation.
They conclude by warning that unless Europe acts now, its global leadership in life sciences will continue to erode. While the region is home to world-class universities, talent, and healthcare infrastructure, they argue that without a more supportive and innovation-friendly market, companies will increasingly look elsewhere.
“Europe has leading universities, talent and hospitals. With deregulation and an attractive market for innovation, it can succeed,” they write. “However, it must act decisively and urgently, or decline will set in and the departure of companies will accelerate.”
In comments to Reuters following the letter’s publication, Soriot reinforced the call for action:
“The world order is shifting right now, and Europe needs to invest more in what really matters to it. Europe has stepped up to invest more in defence—and now it must protect its health sovereignty… Europe spends a substantially lower share of GDP on innovative medicines than the US and, as a result, is falling behind in attracting R&D and manufacturing investments, putting its ability to protect the health of its own people at risk.”