18.01.2023 • NewsBayerPharmadrugmaker

Bayer Shifting Pharma Focus away from Europe

Bayer is increasingly shifting the commercial focus of its pharmaceutical business away from Europe and toward the US and China, Stefan Oelrich, head of the German group’s pharmaceuticals arm, said in an interview with Financial Times during the JPMorgan Healthcare conference in San Francisco.

Oelrich told the newspaper that Europe, including the UK, is “innovation unfriendly,” as its countries’ policies make it difficult for drugmakers to generate adequate returns on their investments.

Like other companies, Bayer is unhappy with the UK scheme for branded medicines pricing agreed between the Department of Health and the pharmaceutical industry. This requires companies to pay 15% of drug sales revenue to the government if the National Health Services’ overall bill for medicines rises by more than 2% annually.

The lower net prices are especially biting in an environment with 10% inflation and no opportunity to pass on the higher costs to the market, Oelrich commented.

Another bone of contention between the pharma industry and European governments is the draft act for the financial stabilization of the public health insurance system passed by Germany’s Bundestag (lower house of parliament) in October 2022. As a cost-containment measures this would reduce the period in which a company can set its own price for a pharmaceutical product from 12 months to six months.  

© Bayer AG
© Bayer AG

Looking toward greener pastures beyond Europe, the Bayer pharma chief said the Leverkusen-based company has already established a “significant market presence” in China, where the government is “increasingly welcoming of innovation.”

In the US, he said higher drugs prices suffice to compensate for the explosion of costs caused by high inflation. Oelrich noted that Bayer’s heavy investment in the market where it recently acquired biotech companies Asklepios BioPharmaceutical and Vividion Therapeutics in deals worth “up to a combined $5.5 billion” is paying off.

Bayer’s upbeat forecast for its pipeline at JPMorgan lent its long-suffering share price a boost of 6.5%. Combined, the growth drivers Kerendia, asundexian (both cardiovascular), Nubeqa (prostate cancer) and elinzanetan, a hormonal treatment for hot in menopause, are projected to have e a peak sales potential of $12.9 billion.

Author: Dede Williams, Freelance Journalist

Free Virtual Event

Sustainability in Bioprocessing
Bioprocess Forum

Sustainability in Bioprocessing

Join us to explore hot topics in sustainable bioprocessing like the industrial potential of enzymatic synthesis, innovative biocatalysis techniques, and the use of digital twins in bioprocessing.

Innovation Pitch

The Start-up Platform for Chemistry & Life Sciences
Discover Tomorrow’s Innovators

The Start-up Platform for Chemistry & Life Sciences

CHEManager Innovation Pitch supports innovation in the chemistry and life sciences start-up scene. The platform allows founders, young entrepreneurs, and start-ups to present their companies to the industry.