Trump administration's drug price policy has a "spillover" effect! Alcon (ALC.US) CEO warns: some drugs may withdraw from the European market

According to Golden Ten Data APP, David Endicott, CEO of ophthalmic medical company Alcon (ALC.US), warned that the Trump administration’s push to link US drug prices with those of other countries overseas could result in certain medicines no longer being available in Europe.

Many innovative products are sold at lower prices in other countries, and the White House wants US drug prices to align with those prices. As a result, some companies may prefer not to sell in Europe rather than lower prices in the enormous US market. Endicott said in an interview on Monday that this thinking means that “different prices outside of the US will be negotiated by the US.” He added, “We’re trying to maintain access as broadly as possible, but obviously we’re also responsible to shareholders.”

Alcon is a Swiss ophthalmology company that manufactures surgical equipment, contact lenses, and pharmaceuticals. At the end of August, the company, along with nine other pharmaceutical and biotechnology companies, reached a drug pricing agreement with the United States. The agreement is intended to ensure continued access to Alcon’s medicines for US patients, while the US government seeks to link domestic drug prices to pricing in other developed countries.

Endicott stated: “Each market develops its own reimbursement system and its own negotiation mechanism, and we do the same globally. As we continue to negotiate prices as we always have, we will keep moving forward globally and figure out what this means.”

It is worth noting that a study published in The Lancet last Sunday found that the Trump administration’s drive to reduce US drug spending has actually become a strong incentive for pharmaceutical companies to raise prices and reduce drug availability in other parts of the world. This study’s findings echo Endicott’s warning.

Researchers found that, among the drugs they studied, about three-quarters would lose more US revenue if manufacturers charged Medicare lower prices than the total sales those drugs generated in the lower-priced countries used as new reference benchmarks. As a result, drug makers may raise prices in some countries or simply withdraw from those markets altogether.

Some companies are already seeking to use US pricing policy as leverage to increase prices elsewhere. For example, Astellas Pharma said it secured a higher price for a new ophthalmic medicine in Japan this year due to concerns about Trump’s pricing policy.

Meanwhile, in Europe, some companies are scaling back their plans. Biogen CEO Chris Viehbacher said this year that the company would only launch its new postpartum depression medicine Zurzuvae in a handful of European countries. Roche Holding said it may never launch a breast cancer pill, which has not yet been approved, in its home market of Switzerland.