Big pharma "underpricing drug launches in Europe, weakening long-term

3 May 2001

Within Europe, due to the increasing pressure to boost short-termreturns and reach the market quickly, more and more pharmaceutical companies are sacrificing the price of their pharmaceutical products in favor of speed to market access, according to a new report issued by Cambridge Pharma Consultancy.

"There seems to be a troubling trend to hastily concede price in order to access markets more rapidly," says Ron Baynes, executive vice president, who leads CPC's European pricing and reimbursement practices, "but once products are locked in at prices that do not reflect their true value, it significantly limits the drug's total returns, as well as the company's overall growth."

There is doubt that adequate economic returns can be sustained in Europe when this trend to lower prices is considered in the context of: a fall in the number of New Molecular Entities gaining market access; more regular, medium-term price reductions; and the fact that price is the single most important contributor to economic value, the report notes.

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