Europe must rethink medicine pricing or risk losing investments, pharma lobby chief says

By Maggie Fick

BRUSSELS, June 23 (Reuters) - Europe will need to rethink how it values and pays for innovative medicines or risk losing manufacturing investments and clinical trials, the head of Europe's pharmaceutical industry lobby said on Tuesday, as governments and drugmakers clash over prices.

Stefan Oelrich, president of the European Federation of Pharmaceutical Industries and Associations (EFPIA), said in an interview that the industry faced a new reality as U.S. President Donald Trump's "most-favoured-nation" pricing policy seeks to tie some U.S. medicine prices to those paid in other wealthy countries, including in Europe.

Drugmakers warn that lower European prices could increasingly affect returns in the lucrative U.S. market, intensifying pressure on cash-strapped European governments to pay more for new medicines.

"Europe will have to step up going forward", said Oelrich, who is also president of Bayer's pharmaceutical division.

Oelrich pointed to Germany, where the government this month proposed legislative measures to curb healthcare spending, as an important test case.

"Germany is sort of like a harbinger for what Europe can be, in a good and a bad way," he said.

While saying German policymakers were listening to industry concerns, Oelrich warned that pharmaceutical companies have choices about where to invest.

"It's unlikely that you run a clinical trial in a place where you don't intend to market. It's unlikely to manufacture, in the long term, in a market where you don't have any demand," he said. "Investments will follow or not, depending on what the conditions are in a given market."

(Reporting by Maggie Fick in Brussels. Editing by Mark Potter)