KEY TAKEAWAY: Via the Finacial Times “Pharmaceutical companies must move towards new pricing models based on outcomes for patients if cash-strapped health systems are to remain solvent, according to the chief executive of Novartis.”
Drug pricing is facing increased scrutiny across Europe as the region’s health systems struggle to cope with rising demand from an ageing population. Mr Jimenez said these pressures would only increase unless industry worked with governments and health providers to increase efficiency.
“There is a tremendous amount of waste in the system and if you focus on just those inputs that deliver [health benefits] and eliminate those that don’t then we can put these health systems on a sustainable path.”
His views reflect growing consensus that drug companies must shift away from traditional business models based on maximizing volume regardless of how well their medicines worked.
It certainly is refreshing to see a drug company CEO finally address the coming storm over pricing. Novartis is certainly going beyond the pill in a lot of ways and it’s due to good leadership. The challenge, however, is going to be making the pharma organization more efficient without simply laying off people. I think it’s safe to assume that DTC managers are going to be spending a lot of time fighting for and justifying budgets.