Paper: Roche, Novartis threaten to leave UK

Drugmakers may not have the power to force the U.K. to pay for their meds, but they do have one massive bargaining chip: Jobs. Witness Swiss drugmakers Novartis and Roche, which reportedly are threatening to pull out of Britain and move some 5,000 jobs abroad.

The threats came in personal meetings with U.K. ministers, who've been traveling the world to placate drugmakers angered by, among other things, drug pricing for the National Health Service, The Guardian reports.

In fact, the officials have mounted a "vigorous charm offensive" to keep multinational drugmakers from leaving the country, according to the paper, which got access to government documents about the situation. As part of that effort, ministers and repesentatives of the cost-effectiveness watchdog NICE have visited pharma execs at their headquarters in Japan, the U.S. and Europe. They've been visiting companies they fear they're most at risk of losing--including Roche and Novartis.

Roche, for one, objected to government efforts to cut drug prices. The U.K. "price squeeze" could well spread beyond Britain's borders, the company says, because many other countries use U.K. prices to set their own. If Roche pulled out of the U.K., it might lose 3 percent of its business, but would "safeguard pricing levels at the remaining 97 percent," the paper reports.

At the officials' meeting with Novartis, the company hinted that it might like some government incentives to help pay for an expansion and upgrade at one Liverpool-area vaccine plant. And company officials warned that the company might move some of their trials out of the country, because the NHS system is too slow, making trials too expensive.

Roche, for its part, says it has "no plans" to leave the U.K.; it's just working with the government to persuade Britain to adopt more new meds, it says in a statement emailed to Dow Jones. Novartis wouldn't comment.

- read the Guardian story
- read the Dow Jones piece

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