Drug pricing

Drug prices are the subject of increased debate as countries are faced with rising healthcare costs and limited budgets. Concerns include the high cost of new medicines, price variation between countries, and the impact of price on access to life saving medicines in the developing world.

At Novartis, we believe that the prices of innovative medicines are justified based on their value, not on production costs.

Variation in drug prices that consumers pay at pharmacies is mostly due to markups in the distribution chain (wholesalers, pharmacists), rather than variations in ex-factory prices charged by manufacturers.

In theory, prices for medicines should vary across countries based on their wealth, i.e. their economic ability and willingness to pay, and the cost of alternative therapies. Yet, international price referencing and parallel trade lead to regional price convergence, which can have significant negative impact on patients and delay access to medicines.

Where patents have expired and medicines are available from multiple sources, prices should be regulated by market forces, i.e. supply and demand.

We facilitate patient access to medicines, particularly in the developing world, by making them available at cost or through special patient access programs.