European pharma chiefs warn region risks losing ground to America, China

European pharmaceutical companies are ramping up their effort to persuade the region's cash-strapped governments to invest more in new medicines, or risk losing out to China and the US.

Drugmakers for months have been warning they could curtail investments and delay the release of new medications in Europe, widening a disparity in access with the US, unless the region's healthcare systems agree to boost spending.

Now, the chairs of several large drugmakers, including AstraZeneca Plc, Roche Holding AG and Sanofi SA, have written an open letter warning European leaders of a looming industry decline in the region absent greater government support.


"In our boardrooms, we see Europe losing ground to global competition," reads the letter. "European governments must create conditions that attract investment in next-generation medicines before it's too late."

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The chairs of Boehringer Ingelheim GmbH, GSK Plc, Novartis AG, Novo Nordisk A/S, Chiesi Farmaceutici SpA and Ipsen are also joining in the letter that has been sent to governments.

The industry's campaign for higher spending on drugs intensified after US President Donald Trump said the US-the world's most lucrative market for pharma companies-will no longer pay more for medicines than other wealthy countries. As prices are typically lower in Europe, launching a drug in the region risks leading to lower prices in the US, damaging profits.

Insmed Inc, for example, earlier this year held back the European launch of its bronchiectasis medicine as it assesses the impact of the US policy. "Around 40% of newly approved therapies never reach European patients," according to the letter. "This is the result of decades in which Europe treated medicines as a cost to suppress rather than one of the best investments a government can make."

The industry effort comes at a difficult time for many European nations, as soaring medical costs linked to ageing populations put healthcare systems in the red.

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"The industry's lobbying is colliding with a hard reality," said Thomas Hwang, assistant professor at Harvard Medical School and lead author of a recent study on the US drug-price push. "Health budgets across Europe have little room to give."

Some of Europe's biggest countries are seeking to drive down medical costs, rather than raise them. Germany passed a cost-cutting healthcare reform in July to help plug a ballooning deficit in its public health-insurance system. Starting next year, drugmakers will have to grant a 15.5% rebate on most branded reimbursable medicines, up from the current 7%.