Novartis Chief Advocates Low Drug Pricings

Mr. Joe Jimenez advocates slashing the prices of drugs.

The chief executive officer of Novartis AG Mr. Joe Jimenez, who has also been appointed as the new President for the European Federation of Pharmaceutical Industries mentioned in an interview to the renowned Financial Times that the firm acknowledges the fact that Novartis along with other companies in the pharmaceutical business needs to come up with a new pricing model that will be solely based on the outcome of drugs. According to him, this is an attempt to keep the health systems of Europe afloat.

He has warned the pharmaceutical sector should not have this on their mind that they will get incentivized for those drugs that have marginal benefits above all other drugs. Or on the other hand, they should not go to extents in order to manufacture benefits for the industry.

According to Mr. Jimenez, “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."

The prices of drugs have become the talk of the town and have become a source of scrutiny all over the European market. The population of Europe is aging at a rapid pace thus these health care provider are struggling to keep pace with the market needs. This actually has resulted in a demand for the system to become more efficient and cost effective in the pharmaceutical market.

So in order to explain it, the drug manufacturing companies need to transform their strategy and move on from conventional businesses. These companies are currently launching a massive number of drugs with no concern about the effectiveness of these drugs. What they need to do is start considering the outcomes for patients and add more value to the drug.

The pharmaceutical firms have become a relatively softer target in terms of budget cuts since there have been many efforts that can minimize the level of wastage. According to BidnessETC, “The focus now is also more on preventive health care rather than on treating disease after their onset. This, as per Jimenez, will create a short-term disadvantage for pharmaceutical companies but in the long run turn out to be beneficial as it will free up essential cash in health care spending for high-value investments in researching on new treatments.”

Hence the more the prices are slashed, the better it will get for drug manufacturers.