The High Stakes Fight Over Drug Prices - SWI Swissinfo.Ch

(MENAFN- Swissinfo) How much is a new drug worth? That's the million-dollar question that health authorities around the world are grappling with as pharma companies demand higher prices. This content was published on September 19, 2025 - 09:00 11 minutes

I report on the Swiss pharmaceutical industry and healthcare topics such as access to medicine, biomedical innovation, and the impact of diseases like cancer. I grew up just outside San Francisco and studied international affairs with a focus on development economics and healthcare policy. Prior to joining SWI swissinfo in 2018, I was a freelance journalist and a researcher on business and human rights.

• More from this auth
• English Departme

Drug companies and regulators around the world are increasingly at loggerheads over prices for new medicines. In Switzerland, pharma giant Roche recently pulled a cancer drug from the market after failing to agree on a final price with the regulator. In the UKExternal link , some industry heavyweights have scrapped investments and warned they may not sell new drugs in the country after a drawn-out battle with the health secretary over price setting.

Pharma companies argue that drug regulators aren't rewarding innovation fairly and are asking for unnecessary and costly evidence of the benefits of new treatments. Health authorities, however, worry about the rising cost of innovative medicines and about overpaying for drugs amid growing political and financial pressure to curb skyrocketing spending.

“There is this political tension between how much money do we have and what do we want to pay for,” said Karin Steinbach, a drug pricing expert at Lattice Point Consulting in Geneva.“Countries want patients to get the treatment they need but they also need to have cost control.”

More More Drug pricing How a clash with Roche exposed cracks in Switzerland's drug pricing system

This content was published on Sep 19, 2025 Switzerland's new process to speed up patient access to the latest drugs hit its first major hurdle in a clash with Roche.

Read more: How a clash with Roche exposed cracks in Switzerland's drug pricing syste

Clashes between regulators and drugmakers are intensifying, partly as a result of pressure from US President Donald Trump, who has accused other countries of“freeloading” on American innovation by leveraging their regulatory power to secure lower prices.

In May, he signed an executive orderExternal link calling for US drug prices, which are the highest in the world, to match the lowest price in countries with a per capita GDP that's at least 60% of the level in the US. He's also called for European countries to pay more for medicines to contribute their“fair share” of the costs of innovation. The 17 largest drugmakers have been given until September 29 to propose plans to lower US prices .

In recent months, big pharma CEOs have adopted a tougher stance towards governments in Europe. Vas Narasimhan, the CEO of Swiss drug giant Novartis, warned in July that companies may not launch new medicines in some markets if governments don't overhaul their pricing regimes.

More More Drug pricing How pharma became Switzerland's Achilles heel in US trade talks

This content was published on Aug 6, 2025 The pharmaceutical industry's strength has made it a key vulnerability for Switzerland in trade talks with the US.

Read more: How pharma became Switzerland's Achilles heel in US trade talk Secret prices

Trump's demands come at a time of major upheaval in the way drug prices are set in many countries. Prior to the 1990s, negotiations between health authorities and pharma companies were largely focused on cost rather than value. Prices were agreed based on what regulators were willing to pay, not on what a drug was worth in terms of health outcomes, and many countries based their prices on what a group of their peers paid.

However, this model began to fracture under the twin pressures of increasing financial strain on healthcare payers and the growing number and cost of new innovative treatments.

External Content

SpendingExternal link on cancer medicines globally grew 75% over the last five years, reaching $252 billion (CHF200 billion) in 2024 according to US-based health data analytics firm IQVIA. Amid rising cancer rates, spending is expected to reach over $440 billion by 2029.

Some treatments are life changing but they also come with eye-watering price tags. Last year, the US approved the gene therapy Lenmeldy for a rare, genetic disease of the nervous system with a price tag of $4.25 million, making it the most expensive drug ever. The average launch price of cancer drugs in the US rose from $172,000 in 2017 to $283,00 in 2021 according to a Reuters analysisExternal link .

“In areas like cancer or rare diseases, we have more and more treatments, which is a good thing on the one hand,” said Steinbach.“But prices are very high to fund clinical development.”

Roche told Swissinfo that bringing a new medicine to market requires a decade of work and an investment of CHF5.5 billion with only 10% of drug candidates that enter clinical trials ever making it to market.

Many countries such as Italy, Spain, Japan, and France started demanding discounts and rebates from manufacturers to secure lower prices and early access to treatment. Pharma companies happily agreed provided such agreements were confidential, arguing that secrecy prevents other countries from demanding lower prices than their peers.

But these closed-door deals have led to a situation where the published list price of a drug is largely window dressing. The real prices are blacked out, leaving countries in the dark about what their peers are actually paying. Meanwhile, researchExternal link shows that the size of discounts has been growing.

More More The Swiss start-up upending how the world pays for medicine

This content was published on Feb 1, 2023 Basel start-up Lyfegen wants patients and insurers to stop overpaying for medicine. Its CEO believes the company has the technology to make it happen.

Read more: The Swiss start-up upending how the world pays for medicin

“We've been trapped in this situation for at least two decades,” said Thomas Hofmarcher, a health economist at the Swedish Institute for Health Economics.“Almost all high-income countries are linking their medicine prices to each other through international reference pricing. But those are built on list prices, which are fictitious.”

There's little evidence that confidential discounts lower healthcare costs and lead to better health outcomes. Studies show that the price agreed is often disconnected from how effective a medicine is or how much value it brings society. Prices increasingly reflect a regulator's negotiating power, according to Ivonne Leenen, communications officer at European Cancer Leagues.“Paradoxically, some medicines are more expensive in countries with lower GDP,” she told Swissinfo.

Although health authorities claim to support greater transparency, there has in reality been little concerted effort to move to a more open system that shows the true, net price of a drug.

Getting their money's worth

The failure to curb costs has led countries to demand greater justification for prices. Nearly every European country now has an agency that carries out Health Technology Assessments (HTAs), evaluations of not only the medical but also the social, ethical and economic consequences of medicines.

“Most European countries that didn't have an HTA body in the past, have over the last 10-15 years established one,” said Hofmarcher.“That's a clear sign that providing evidence is more important now than in the past.”

Their approaches vary, but they all aim to assess a medicine's true value-added. Many do this using a common measure called the quality-adjusted life year (QALY), which allows regulators to put a price on the benefits a drug generates compared with existing treatments or a benchmark.

MENAFN19092025000210011054ID1110083609