Novartis CEO urges move to new drug pricing models

Joe Jimenez, chief executive of Swiss pharma giant Novartis (NOVN: VX), in an interview with the UK’s Financial Times, has warned that drugmakers can no longer expect to be rewarded for new medicines that produce weak or only incremental benefits.

Mr Jimenez was to some extent echoing views expressed by GlaxoSmithKline CEO Sir Andrew Witty in his defense of current policy and divestments of the UK pharma major. He was speaking to the FT in his capacity as president of the trade group The European Federation of Pharmaceutical Industries and Associations, which was confirmed at the EFPIA annual General Assembly last week.

Pharmaceutical companies must move towards new pricing models based on outcomes for patients if Europe’s cash-strapped health systems are to remain solvent, according to Mr Jimenez, adding: “What’s coming is not a pretty picture for anybody in the next 10 years and unless we….help reduce demand on the health system it is just going to mean more cost containment, more rationing of care and that’s not good for the industry.”