Reality of Trump’s drug pricing to set in over next 18 months
NovartisU.S. drug pricing policy under President Donald Trump poses a “very difficult situation” and the truth will soon catch up with both drugmakers and patients, the CEO warned Tuesday.
“Long-term results are important,” CEO Vas Narasimhan told CNBC’s Carolin Roth. “The reality of MFN will emerge within the next 18 months.”
He stated that Novartis is focused on ensuring that European and Japanese governments quickly change the way they reward innovation, adding that if this does not happen, the entry of new drugs into these markets may be delayed and patients will not be able to access these drugs.
The most favored national drug pricing policy, or MFN, implemented by Trump last year, means that prices in the large and lucrative US market are tied to prices in relatively rich countries. Trump has made lowering drug prices for Americans a priority and has long criticized What he calls “foreign nations freeloading on American-financed innovations.”
Narasimhan’s comments echo other drugmakers who bemoan Europe’s fragmented markets, bureaucracy and pricing policies.
Roche And AstraZeneca It is among the companies that have recently marked Unless lower spending on medicines and negative policies are addressed, European countries risk missing out on new medicines.
MFN’s impact on Novartis’ top and bottom line is still limited because it currently affects about 5-10% of sales in the Medicaid segment, Narasimhan told CNBC.
The official added that although there had been “previous good discussions” with European governments, there were still not enough measures being taken. “There is awareness, but I still think there is a lack of recognition of the level of impact that is coming.”
Earlier this month, Germany announced a proposal to cut costs in its national healthcare system to overcome a multi-billion-euro financing gap, including introducing higher discounts on patented medicines.
“For example, we have seen the recent moves of the German government, which are actually going in the wrong direction. This is very worrying,” Narasimhan said.
“These governments are going to have to take this really seriously now, because [MFN] “The policy has been set, and I don’t see that being lost in the United States.”
