Roche’s chief executive called in an interview with Swiss media published Sunday for Switzerland to pay more for new drugs, to bring prices in line with those paid by Washington.
The Swiss pharmaceutical giant’s US subsidiary Genentech figures among 14 pharmaceutical companies which have so far signed on to US President Donald Trump’s push to cut some US drug prices.
Companies have been making these voluntary deals after Trump sent a letter to 17 major companies over the summer threatening sky-high tariffs if they did not lower drug prices.
Genentech joined the deal on Friday, agreeing to commit to “Most Favoured Nation” pricing: matching the lowest price offered in other wealthy nations, including Switzerland.
Switzerland is the country that “has the most to gain and the most to lose” in this equation, Roche chief Thomas Schinecker said in an interview with Switzerland’s Tamedia Group published by the Le Matin Dimanche weekly.
He said that the details of that agreement remained confidential, but that Washington in principle was seeking to see other wealthy countries contribute more to financing the development of new drugs, in line with their economic strength.
“The US administration wants the prices of recently marketed drugs to be harmonised in the future in eight countries: Denmark, Germany, France, the United Kingdom, Italy, Japan, Canada and Switzerland,” he said.
‘Higher prices’
For countries with a higher gross domestic product per capita than the United States, like Switzerland, “this would translate into a higher price,” he said, stressing that the price hikes would not affect drugs already on the market.
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If Switzerland does not toe the line of the new US system, Schinecker warned it would hurt the wealthy Alpine nation’s vital pharmaceutical industry, which accounts for a full 10 percent of its GDP.
“Tax revenues generated by this sector amount to 4 billion Swiss francs ($5 billion) per year,” he pointed out, stressing that alone was more than what the country spends on innovative medicines.
If Switzerland does not reform its pricing system, “Roche would generate less revenue, invest less in cutting-edge research, pay less tax, and create fewer jobs in Switzerland,” he warned, highlighting that Roche employs more than 15,000 people in Switzerland.
Switzerland and the United States are meanwhile locked in negotiations on the details of a deal slashing a whopping 39 percent levy imposed by Trump — among the highest in his tariff blitz — to 15 percent.
READ ALSO: ’39 percent’: Why has Trump hit Switzerland with such high trade tariffs?
Up until now, drug prices have not figured into the negotiations, which are due to conclude by the end of March, but Schinecker said he was all but certain they would soon be pulled in.
Roche announced earlier this year plans to invest $50 billion in the United States over the next five years, in a bid to head off the threat of tariffs.
Schinecker said his company had “concrete plans” for those investments.
“The $50 billion represents 50 percent of our investment potential over the next five years, which roughly corresponds to our share of revenue generated in the United States,” he said.
