As European countries line up with ever-stricter rules designed to reduce the price they pay for pharmaceuticals, Novartis has commissioned a new report from a group of tech experts that draws a straight line between the strictness of the new regs and a reduction in R&D innovation.
In clear and measured language, the European School of Management and Technology Competition Analysis note that a strict regulatory environment inevitably shifts the attention of drug developers to new therapies that can deliver the highest profits. And that can spur biopharma companies to reduce spending on new antibiotics, which are badly needed.
“Rational investors will naturally look for the most profitable investment choices, which is why regulation has a direct impact on the number and characteristics of the medications developed. Our study shows the consequences that pricing and reimbursement regulation can have on pharmaceutical innovation. It also shows that, incorrectly applied, regulation can reduce the value of pharmaceutical projects and curtail the resources available to carry them out,” Hans Friederiszick of ESMT CA said in a statement with the report.
None of their reasoning, though, is likely to slow down the burst of activity around controlling drug prices in Europe, though. Both German and Greek lawmakers recently moved to reduce their drug bill by billions of euros.