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Pfizer Chief Says Some European Countries ‘Freeloading’ Off Others

March 13, 2012

Pfizer said Europe is undermining drug innovation by cutting prices, raising barriers to new medicines and “freeloading” off others in Asia and the U.S. who are willing to pay, according to a Reuters report.

Chief executive Ian Read told Reuters on Monday that European governments are sacrificing the long-term future of science in their countries for the sake of short-term budget cuts.

The report said the chief executive of the world’s largest drugmaker claims there is a disconnect in Europe between the marketplace for pharmaceuticals and the desire of European governments to have innovation and research.

Read said governments in Europe that are becoming increasing reluctanct to pay up for innovative therapies would eventually regret it.

He said the pharmaceutical industry is a high-risk business, and European leaders are sacrificing the long term for the short term.

He used Germany as an example when speaking to Reuters, using Berlin’s recent decision to extend drug price freezes from 2010 and to use a basket of countries like Poland and Greece as a benchmark for how much it will pay for drugs.

Read said they are saying that “investment in innovation is at a level that Greek prices can support.”

“That’s not a recipe to create an innovative industry that can compete on the world stage,” he told Reuters.

He said since Germany is one of Europe’s wealthiest countries, he questioned whether referencing its prices to Greek or Polish levels would offer drug makers a fair return.

“These are the questions I’d like politicians to look at in a fundamental way,” he said. “The risk of freeloading is so great in an industry with sunk costs.”

He told Reuters he would like to see governments taking a longer-term view and engaging on the issue of who should pay for the research and development costs of these new modern medicines.

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Source: RedOrbit Staff & Wire Reports



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