The UK is at risk of falling behind European rivals in healthcare innovation because of “dramatic short-term measures” the government is taking to reduce the country’s deficit, Sanofi’s chief executive has warned.
“If I see how fast science is developing in France, how fast innovation is developing in clinical operations in Spain, there is a real risk that other countries take a big lead. [over Britain]”said Paul Hudson, the chief executive of a French pharmaceutical company, despite the “brilliant” British scientific community.
“The government and in particular the UK must be careful that short-term dramatic measures against the industry do not lead to erosion in the sector and access to medicine for patients,” he said. clinical research two years has declined in the country by 50 per cent.
Hudson said he called for a halt to health and life science research in talks with Number 10 and the Treasury. Major pharmaceutical companies have also criticized the scale of the clawback costs NHS pricing policy has imposed on the industry, which accounted for more than a quarter of UK sales last year.
Drug manufacturers signed a voluntary agreement with England’s NHS in 2019 to limit total increases in branded drug bills to 2 percent per year. But the combination of the pandemic and an increase in the use of more expensive treatments has led to an extraordinary clawback in the past two years.
The Department of Health and Social Care did not immediately respond to a request for comment.
The comments from Sanofi’s chief executive come amid a wider struggle between big pharmaceutical groups and governments around the world over drug prices, as policymakers contend with tight budgets and drugmakers face a tough commercial environment.
Sanofi predicted in its annual results released on Friday that it will grow rapidly this year, after generating strong sales in 2022 driven by the anti-inflammatory drug Dupixent, which is used for diseases such as eczema, and vaccines.
Demand for Dupixent is expected to continue to grow – with the company saying it aims to exceed sales of €10bn this year, from €8.3bn in 2022 – but this will partly be offset by competition from generics for Aubagio, a treatment for multiple sclerosis.
Sanofi reported a decline in sales last year in key areas including immunology and oncology, in which the company has invested heavily, as it seeks to reduce its reliance on Dupixent. He expects to bring two new products to market: Altuviiio, a hemophilia treatment, and Beyfortus, a vaccine against common respiratory viruses in young children.
Sanofi said adjusted earnings per share, excluding currency movements, would be “in the low single digits” for 2023. They rose 17 percent to €8.26 per share in 2022 while sales rose 7 percent to €43bn.
Sanofi is pursuing a five-year turnaround plan at Hudson, who is in his fourth year at the company’s helm. However, it has faced questions from industry stakeholders about the strength of its drug pipeline even as it continues to move forward with changes in the group to include exiting categories such as heart disease and diabetes while investing heavily in cancer treatment and immunology.
Sanofi’s failure to develop a Covid-19 vaccine despite being one of the world’s largest vaccine makers has troubled the company, as has the failure of several drugs developed by the company. Analysts say Hudson should start a more ambitious dealmaking spree.
“M&A may be on the agenda for 2023,” wrote Michael Leuchten, an analyst at UBS. “We don’t think the value of Sanofi pivots in the near future, but in the company’s ability to create optionality that will eventually allow it to cover the loss of dependence on Dupixent. Intelligent capital allocation can change the perception of investors.
Sanofi’s share price has fallen more than 4 percent in the past year, a less drastic decline than Pfizer, Johnson & Johnson, and Novartis, but the shares have lagged since Hudson took the company’s helm.
Additional reporting by Hannah Kuchler