Bayer chief deplores ongoing drug-price cuts

Penny-pinching governments have put pharma's head in a vise, Bayer CEO Marijn Dekkers says. Joining a chorus of pharma executives, Dekkers warned that continuing to squeeze drug prices will crush innovation and drain the lifeblood from the R&D-based business model.

"The profits that we make on the current drugs really source and fund the R&D of the drugs in the future," Dekkers told an audience in Boston. "The danger of pushing the prices of prescription drugs down, down, down is that at some point the business model of developing these drugs will lose its attractiveness."

Dekkers acknowledged that many countries need to cut their budgets. But he went on to lament the fact that governments use pharma as a convenient scapegoat for rising healthcare costs. It's simple to cut drug prices--and not so simple to implement complicated reforms, he said. "Here [in the U.S.] the balance is quite good," he said (as quoted by Reuters), "but in Germany it is more of a problem."

European pricing pressures have been severe for a couple of years now, as financial and fiscal crises forced governments into cost-cutting mode. Drugmakers now face higher cost-effectiveness hurdles in richer countries and big price cuts elsewhere--not to mention new measures that aim to increase use of generic drugs.

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