The Trump administration's drug price policy “kills” spillover! Alcon (ALC.US) CEO warns that some drugs may withdraw from the European market

The Zhitong Finance App learned that David Endicott, CEO of ophthalmology company Alcon (ALC.US), warned that the Trump administration's push to link US drug prices to prices in other countries overseas may result in some drugs not being marketed in Europe.

Many innovative products sell at lower prices in other countries, and the White House wants US drug prices to match these prices. As a result, some companies may choose not to sell in Europe rather than cut prices in the huge US market. Endicott said in an interview on Monday that this idea means “different prices outside the US will be negotiated by the US.” He added: “We are working to maintain accessibility as widely as possible, but obviously we are also responsible to our shareholders.”

Alcon is a Swiss ophthalmology company that produces surgical equipment, contact lenses, and pharmaceuticals. At the end of August, the company, along with nine other pharmaceutical and biotech companies, reached a drug pricing agreement with the US. The agreement aims to ensure that Alcon's medicines can continue to be used by American patients, while the US government is seeking to link US drug prices to pricing in other developed countries.

Endicott said, “Every market will develop its own reimbursement system and its own negotiation mechanism, and we are doing the same globally. As we continue to negotiate prices, we will continue to advance globally to figure out what this means.”

It is worth mentioning that a study published in “The Lancet” last Sunday found that the Trump administration's push to reduce US drug spending has instead provided a strong incentive for pharmaceutical companies to raise drug prices and reduce drug availability in other parts of the world. The findings echo Endicott's warning.

The researchers found that for about three-quarters of the drugs they studied, if the pharmaceutical company charged a lower price from the US Medicare (Medicare), the revenue lost in the US would exceed the total sales of the drug in countries with lower drug prices used as a reference for the new benchmark. As a result, pharmaceutical companies may raise prices in some countries or simply withdraw from relevant markets.

Some companies are already seeking to use the US drug price policy as leverage to raise prices elsewhere. For example, Astellas Pharmaceuticals said that due to concerns about Trump's pricing policy, the company secured a higher price for a new ophthalmic drug in Japan this year.

Meanwhile, in Europe, some companies are scaling back their plans. Baijian CEO Chris Weibach said this year that the company will launch its new postnatal depression drug Zurzuvae in only a few European countries. Roche Holdings, on the other hand, said it will probably never launch a breast cancer pill that has not yet been approved in its home market Switzerland.