AstraZeneca’s CEO Pascal Soriot warns that the new US legislation controlling drug prices would reduce innovators’ capacity to recover drug development investments and therefore discourage innovation, especially for drugs with smaller patient pools.
In a Reuters interview last week Soriot said the law recently passed in the United States that would allow the federal Medicare system to negotiate prices on up to 20 drugs a year will have a direct impact on innovation. Specifically, Soriot said the new law will delay the launch of new medicines, particularly those for smaller indications with lower sales potential, like second and third line therapies for cancer. He mentioned the company’s top-selling cancer therapy, Tagrisso.
Soriot claims that with this new legislation, companies will lose the incentive to look for these therapies and they will instead try to maximise the number of patients they can treat for as long as possible to recover their investments. “That’s unfortunate because patients will suffer,” he said.
Under the current system of patent protection, pharma companies can get back their investment in developing a drug over 9-11 years, Soriot said. But with the price negotiation in the new law that will be in place as of 2026, it will be much harder to retrieve they money they have invested in R&D.
He further stated that the new legislation appeared to outline an “imposition of price” rather than a negotiation process.