AstraZeneca warns German reforms could push pharma launches and investment out of Europe
AstraZeneca CEO warns that pharma may avoid launching new medicines in Europe’s largest market
In an interview in German business paper Handelsblatt, AstraZeneca CEO Pascal Soriot reacted to proposed health reforms saying that AZ would be unable to launch some products in Germany: "It's going to be very hard for us, we're going to be attacked, but in the end, we will have no choice, also because of the pressure in the US.”
In March, a commission of experts presented a list of 66 cost-saving proposals to curb spiralling German healthcare costs, potentially offering policymakers a menu of measures that could reshape the country's statutory health insurance system.
Last week, the Health Minister Nina Warken announced,which of these would be implemented, including an increase in mandatory discounts for public health insurance funds from the pharmaceutical industry.
Catherine Feore
Germany is usually the preferred market for launching a medicine in the EU given the size of the market, the higher purchasing power, and the automatic reimbursement for European Medicines Agency-approved drugs, allowing for a 12-month ‘free pricing’ period before benefit assessments begin.
"The proposed regulation is a dangerous backward step," said Soriot, warning that Europe would become a “sales office” while R&D takes place in the US and China.
In January, AZ announced $15 billion (€12.8 billion) investment in China through 2030 to expand medicines manufacturing and R&D. The investment is aimed at enhancing AZ’s cell therapy and radio-conjugates capabilities for the treatment of cancer and a range of other diseases.
Knock-on effect on EU/US trade agreement?
Soriot pointed to possible impacts on the EU/US trade agreement, saying that “the US will not be happy with the decision”.
In response to President Trump’s 31 July letter sent to 17 pharma companies, demanding that they match the lowest price offered in other developed nations, a so-called most-favored-nation, or MFN, price, AZ announced (10 October) that it would “voluntarily” meet all requests set out in the letter.
The company committed to provide access to medicines “at prices that are equalized with those available in wealthy countries”, to participate in the TrumpRx.gov direct purchasing platform, and to onshore manufacturing in the US through an agreement with the US Department of Commerce to delay Section 232 tariffs for three years. The announcement came as AstraZeneca reversed investment commitments in the UK.
Catherine Feore
Soriot's words are a warning shot that if Germany’s launch-friendly model weakens, it risks having a wider impact on EU pharma, slowing patient access and accelerating a longer-term shift of R&D investment toward the US and China.