GlaxoSmithKline ($GSK) chief Andrew Witty (pictured) is raising a ruckus in Europe, accusing governments of not only cutting prices and drug budgets, but holding off on adopting new meds to save money. In an interview with the BBC over the weekend, Witty said his company has lost £300 million, or $475 million, to drug-spending cuts, with more to come if officials continue treating pharma buys as a "simple procurement business."
Witty, who's the current chairman of the European Federation of Pharmaceutical Industries and Associations, has been vocal about European austerity moves ever since they intensified a couple of years ago. With countries across the EU cutting drugs budgets at the same time, pharma stood to lose a big chunk of revenue, he said then.
Now, of course, that prediction has become reality. "As governments have got more and more anxious about their debt positions and austerity agendas, what happened is quite predictable," he said. "If you are a minister and you need to cut costs, it is a lot easier to cut drug prices than it is to close a hospital or reduce the size of the Civil Service."
Witty says the cuts are coming willy-nilly, with little long-term thought behind them. "The bit I'm much more frightened about is that ... in addition to price reductions, governments are delaying the approval of innovative new drugs," Witty told BBC Radio (as quoted by The Telegraph). "So a second way they can save money, they think, is 'Let's just not buy the next round of innovation.'"
Witty specifically called out the U.K.'s reluctance to adopt new, expensive cancer drugs. In recent years, cost-effectiveness gatekeepers have been stringent in their evaluations of pricey new treatments, stirring up public outcry and pharma complaints. The National Institute for Health and Clinical Excellence has forced discounts on some drugs--and refused to approve others even after pricing schemes were offered.
Government officials told the BBC that cost-effectiveness assessments haven't changed, and "careful assessment of drugs' effectiveness" is particularly important now. "Furthermore, drug companies need to look hard at the high costs they are asking of the health service for their latest treatments," a Health Department official said.
- see the BBC story
- get more from the Telegraph
- read the Financial Times coverage