EU needs tiered drug pricing to improve patient access, says Bayer exec

The European Union should put in place systems that allow drugmakers to charge higher pricing in wealthy European countries and lower costs in poorer countries to ensure more fair patient access to life-saving medications, according to Bayer's global pharmaceuticals chief. This might be achieved in part by restricting medicine importation within the EU, according to Stefan Oelrich, head of Bayer's pharmaceuticals unit, who spoke to a news agency on Thursday.

Last month, the EU released a long-awaited draught of its proposed revamp of legislation controlling its medicines industry. One of the primary goals of the reforms would be more equitable access between richer and poorer EU member states. Oelrich, echoing pharmaceutical industry concerns, claimed the proposed restrictions will hinder innovation and reduce access to pharmaceuticals in Europe.

"We have made clear proposals to the Commission on how we could address the access issues, for example, through tiered pricing opportunities within the European Union," Oelrich said ahead of a Bayer event in Boston to open a new research facility. Prices in the EU are already fixed at the national level. The single market of the EU allows for the free movement of goods and services. "The trick today is that if you do this exactly like that, then all of the product that you would ship to Lithuania at a discounted price would immediately return to France because goods circulate freely."

"There would then need to be a mechanism to actually make that manageable," he explained. An EU source voiced reservations that tiered pricing schemes like the one proposed by Oelrich might tackle the access issues addressed by the Commission's pharmaceutical legislation. There is no guarantee that corporations will relocate to smaller or poorer EU countries because they do not have a profit motivation to prefer them, according to an EU source. Even if they travel (to poorer nations), they are unlikely to do so quickly since they will prioritise more lucrative sales in the larger and wealthier member states, according to an EU source. Bill Anderson, a former Roche pharmaceutical executive, will take over as Bayer's next CEO next month.

The company is working to expand its pharmaceuticals business in the United States, and has stepped up spending on research and development there despite a new US law that will allow the government to negotiate prices on some drugs for patients in its Medicare health program. "If I compare the conditions between the US and Europe in terms of drug pricing, they're still more favorable in the US than they are in Europe," Oelrich said.