Novartis CEO wants to end higher pricing for drugs sold in the US

Novartis wants to eliminate price difference with the USA Keystone-SDA

The Swiss pharmaceutical company Novartis wants to eliminate the price difference between medicines in the US and other industrialised countries. Group CEO Vasant Narasimhan believes that countries outside the US have a duty to contribute more to innovation.

“It is a fact that American patients pay for a large part of the innovations,” said Narasimhan in an interview with the Neue Zürcher Zeitung published on Saturday.

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The background to this is American President Donald Trump’s demand for price cuts. At the beginning of August, he gave Swiss companies such as Roche and Novartis, among others, a 60-day deadline to reduce their prices. This represents a challenge worth billions for the companies. Novartis is working with the government and trying to find “constructive solutions so that Americans have to pay less for their medicines”, said the CEO.

Swiss prices are ‘far too low’

When asked what this means for Switzerland, Narasimhan replied: “In Switzerland in particular, drug prices are far too low.” In comparison with other member countries of the OECD, the Organisation for Economic Co-operation and Development, they are at the lower end.

In general, however, it is impossible to say how much more European countries would have to pay. “But even today, 30 to 40 per cent of cancer drugs, for example, are delayed or not launched on the European market at all,” said the Novartis CEO. This proportion will increase over time.

Complex US system

The Group is currently examining various mechanisms for possible price reductions. The US system is a complex construct with intermediaries and discounts. “Around half of our gross sales go to these middlemen,” said Narasimhan. The biggest opportunity in the US is to limit the influence of purchasing organisations.

According to the CEO, Trump’s demand will not affect Novartis’ outlook in the medium term. As far as unforeseen events are concerned, he was optimistic: “No matter what happens, it should be possible to manage all changes under the current legal situation in the US,” he said.

Adapted from German by DeepL/ac

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