“Never waste the opportunity offered by a good crisis” is a maxim with many reported sources. Perhaps not surprisingly it is now generally attributed to Niccolò Machiavelli, the Italian philosopher, author and diplomat.
Popularised more recently by Barack Obama’s chief-of-staff Rahm Emanuel, the point is that times of crisis can provide an opportunity to do things you could not do before.
Europe’s pharma bosses are evidently believers in the principle on the basis of a letter to the Financial Times this week where Novartis chief executive Vas Narasimhan and Paul Hudson, his counterpart at Sanofi, suggested an approach that might pay dividends for the European Union as it looks to counter the tariff threat from Donald Trump’s America – increase drug prices towards the much higher levels paid by the US.
Their logic?
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The US pays nearly three times as much for branded and generic medicines as other comparable countries, according to US government estimates. And with tariffs now looming the companies say they have even less incentive to invest in an increasingly uncompetitive European Union.
Certainly Big Pharma has been quick to fall into line, promising big US investments to try to sweeten president Trump. Roche said this week that it would invest $50 billion in the US, Novartis has pledged $23 billion of spending on manufacturing and R&D, and US drugmakers Johnson & Johnson and Eli Lilly have both promised big investments.
Lower prices in the EU “artificially [cap] biopharma market growth” and creates a “clear disincentive for innovators”, Narasimhan and Hudson add, citing data that 30 per cent of medicines approved in the US are not available in Europe after two years.
Even by the standards of the pharmaceuticals sector, the letter is spectacularly tone deaf. Leaving aside their obsequious toadying at the court of Trump, it ignores entirely the realities of already stretched health budgets across the EU and also the reality that, for all its profitability, the US market has limits.
And it very publicly puts a metaphorical gun to the head of the European Commission in the middle of negotiations with industry on forthcoming legislation governing pricing and patent protection in the sector.
The “bend the knee” approach favoured by the current US administration has very quickly shown up the true colours of many business leaders and their companies. But the “America first” protectionist approach favoured by the current administration in Washington will pass. And when it does Big Pharma will still need access to markets outside the United States. It may find that memories linger longer than they had hoped.
