Novartis and Sanofi Urge EU to Raise Drug Prices

Key Points:
1. European pharma leaders push for higher drug prices to boost global competitiveness.
2. CEOs warn EU may lose out on innovation if current pricing limits remain.

The chief executives of Novartis and Sanofi are urging the European Union (EU) to reevaluate its pricing policies and raise drug prices to reflect the true cost of innovation. They argue that Europe’s current model of strict price controls is limiting investment and driving pharmaceutical research and development efforts to other markets. In recent years, companies have increasingly redirected capital to the United States, where reimbursement rates are higher and timelines for drug approvals are shorter. With global trade tensions on the rise and new tariffs on the horizon, pharmaceutical leaders say Europe must do more to retain its competitive edge. Novartis and Sanofi are not alone in raising these concerns, as firms like Johnson and Johnson and Eli Lilly have also made significant investments outside of Europe in response to regulatory hurdles. In a letter published in the Financial Times, the CEOs suggested establishing a unified European pricing model tied to innovation metrics and linked to U.S. net prices. They believe this would make the European market more attractive for launching new therapies. Without such changes, they warn, Europe may fall behind in developing and producing next-generation medicines. The European Commission has put forward a set of proposed reforms, but critics within the industry say they are too incremental to make a meaningful impact. There is also concern that continued pricing pressure will reduce patient access to cutting-edge treatments in the long term. The pharmaceutical industry insists that rewarding innovation is critical to ensure both medical progress and economic stability. Meanwhile, patient groups remain concerned about how price hikes could impact access and affordability across the continent. The tension reflects the broader challenge of balancing healthcare equity with the need to foster innovation in a high-stakes, globalized market.

Relevant reading: Novartis, Sanofi CEOs Say EU Should Raise Drug Prices to Face Tariffs