European Pharma, Governments Need New Dialogue - Glaxo CEO

21st Jun 2010 16:17

By Sten Stovall Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Europe's research-based pharmaceuticals industry Monday called for "a new dialogue" with cash-strapped governments to avoid a damaging downward trend in product innovation and health care provision, as countries in the region grapple with huge budget deficits. A number of European governments recently have announced aggressive product price cuts as part of widespread austerity measures aimed at solving serious budget deficits, fanning fears in the sector that its sales and profits from the region will fall. Europe is the second-largest market after the U.S. for many drug companies. "We need a new dialogue between industry and governments to address the difficult questions facing us all, on access, on affordability and on innovation," said Andrew Witty, chief executive of GlaxoSmithKline PLC (GSK) and current president of the European Federation of Pharmaceutical Industries and Association, or EFPIA. Witty said in a speech here to EFPIA members that Europe's drug industry knows it must be a "genuine partner" to governments and their agencies and that a shared understanding of value was critical to both the industry and governments. He called for a better dialogue between industry and authorities, prior to and after marketing authorization for individual drugs. "Let's start looking at medicines expenditure as an investment. This will enable governments and industry to set a strategic agenda for health and pharmaceutical innovation. What matters is whether a medicine works, responds to patient needs and, if so, that it is rewarded," he said. Speaking to reporters beforehand, Witty said the pharmaceuticals industry had to accept downward pressure on pricing in the current environment, but stressed that governments also need to ensure that their responses to the crisis don't kill off product innovation. "All parties need to speak to each other--not past each other," he added. He criticized the recent decision by Denmark's Novo Nordisk A/S (NOVO-B.KO) to pull some of its modern insulins off the Greek market after the government there cut prices. "That kind of action isn't necessarily helpful to the debate that is going on at the moment," Witty said. Novo Nordisk--the world's No.1 insulin maker--last week decided to resume sales of modern insulins in Greece after authorities there raised prices of those products to an "acceptable" level, albeit not as high as the company would have liked. -By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; [email protected] (END) Dow Jones Newswires June 21, 2010 11:17 ET (15:17 GMT)