Pharma might exit EU soon
Is Europe making it too hard to make medicine? A note from two Big Pharma bosses says it is time for EU to rethink pharma policy. Or else...
Today, that is April 23, 2025, the CEOs of Novartis and Sanofi—Vas Narasimhan and Paul Hudson—wrote a very polite but very pointed letter to the Financial Times. And the message was clear: “Hey Europe, we love you, but we’re struggling here!”
So what’s going on?
Well, the CEOs basically said Europe is making it harder and harder to do business in pharma. Why? Because of price controls (governments deciding what they’ll pay for medicines) and budget-tightening policies that sound responsible but are kind of squashing innovation.
They pointed out that the U.S. pays ~3x more for medicines than countries in Europe. That’s a lot. And while no one wants to overpay, that extra money in the U.S. goes back into research and development—aka, finding new cures and better treatments. In Europe, with prices capped low, it’s like asking someone to run a marathon with a sprained ankle. You can do it, but it’s not going to be pretty. Is anyone in India listening?
Here’s the kicker:
The old playbook for European pharma companies—make medicines here, sell them to the US — isn't working anymore. There are whispers (okay, shouts) about new tariffs coming from the U.S., and suddenly that export-heavy model starts looking a little risky.
So the Pharma Bosses say, look, we need to switch things up.
They’re asking for two big changes:
Higher drug prices in the EU—not crazy high, just something a bit more in line with the US, so that investing in new medicines doesn’t feel like throwing money into a black hole.
Clear targets for how much countries will spend on innovative medicines, to reward companies that take big R&D risks (and spend big money) to bring new treatments to market.
It’s not just about the bottom line—there’s a bigger picture here. If Europe doesn’t make the environment friendlier for pharma companies, then guess what? The innovation (and the jobs and the high-tech labs and the smart people) might all move somewhere else. They mentioned “China” 4 times in their short letter, but didn’t say they would move there. Well…
And that’s not good news for patients who want access to cutting-edge treatments or for anyone hoping to keep Europe competitive in the global health race. Unless, that new place is China! But after promising to invest >$150B in the US, would that be a smart move?
So, in short, the CEOs aren’t throwing shade. They’re waving a flag. A big, hopeful, slightly nervous flag that says: “We love Europe. Let’s keep it a great place to invent the future of medicine.”