Novartis and Sanofi Push EU to Raise Drug Prices

The chief executives of Novartis and Sanofi have called on the European Union to increase drug prices to levels comparable with the United States, arguing that current price controls and austerity measures are undermining the region's attractiveness to investors. In a letter published by the Financial Times, Novartis CEO Vas Narasimhan and Sanofi CEO Paul Hudson emphasized that the EU's pharmaceutical model, which relies heavily on domestic production and exports to the U.S., is becoming unsustainable in the face of evolving global trade dynamics.

The CEOs highlighted that European price controls diminish incentives to invest in the EU, especially amid increasing tariffs and global trade uncertainties. They urged the EU to set higher list prices and establish clear spending targets for innovative medicines to reward innovation and strengthen the domestic market.

This appeal comes as several major pharmaceutical companies, including Roche, Novartis, Eli Lilly, and Johnson & Johnson, have announced substantial investments in the U.S. to mitigate the impact of tariffs. Roche recently pledged a $50 billion investment over the next five years, aiming to expand manufacturing and distribution centers across several states. Novartis has also committed $23 billion to U.S. operations.

AstraZeneca CEO Pascal Soriot echoed these concerns, stating that Europe must protect its health sovereignty and is falling behind in pharmaceutical investments and innovation. He noted that Europe allocates a significantly smaller proportion of its GDP to innovative medicines compared to the U.S., which undermines the region's capacity to attract research, development, and manufacturing investments.

The pharmaceutical industry's push for higher EU drug prices underscores the broader challenges facing the sector amid shifting geopolitical and economic landscapes. As the U.S. considers adjusting domestic drug prices to align more closely with those in other developed nations, European drugmakers are advocating for policy changes to maintain competitiveness and ensure the sustainability of their operations.