Politics, Pricing

AstraZeneca R&D leader Pangalos warns of a post-Brexit UK research retreat without reimbursement reform

AstraZeneca’s influential R&D leader Mene Pangalos has blasted the UK government’s drug watchdog NICE for keeping the price of new drugs at low levels, saying that regulators are threatening the industry’s substantial R&D presence in the country in a post-Brexit world.

Mene Pangalos

Mene Pangalos

“To continue to get the research and investment here, you have to pay for the drugs,” Pangalos told The Telegraph in an interview. “Research and adoption of clinical innovation go hand in hand and the Government has to be prepared to pay for treatments that work.”

World-class academic research in the UK’s Golden Triangle or London, Oxford and Cambridge combined with an attractive tax environment has played to the country’s advantage so far, he adds, but Brexit could change that equation without a better approach to reimbursement that recognizes the value of new meds.

Added Pangalos:

The UK is not a big enough market to be a priority. As a drugs market it is more important for us to launch in France, Germany and Sweden than in the UK because they adopt and pay for the drugs. The UK is a challenge now but without the EU the UK will get left behind if it doesn’t start to change the way it reimburses drugs.

AstraZeneca $AZN has relied heavily on its presence in the UK to weather a variety of storms in recent years. CEO Pascal Soriot raised the prospect of an R&D Armageddon if Pfizer —  known for its willingness to pillage research as a way to pay for M&A — was allowed to follow through on its proposed takeover. And early on Soriot hit hard on the company’s base in the UK with his commitment to build a half-billion dollar HQ and research hub in Cambridge as he set out to reorganize the company’s hapless R&D operations four years ago.

He’s had mixed success on that score so far, gaining a couple of significant advances in oncology with new drugs like Lynparza and Tagrisso. The pharma giant also has a late-stage checkpoint inhibitor in a slate of combination studies, though one program for head and neck cancer was placed on a partial hold due to safety fears. A string of other setbacks have also taken a toll.

It’s not uncommon for drug companies to hammer British regulators for the way NICE manages drug costs to their disadvantage. But it is rare for a senior research exec like Pangalos to spearhead a direct assault like this by threatening the country’s Achilles heel: hitting on research employment, which distinguishes the country from much of the rest of Europe. That signals their belief that the UK government is feeling particularly vulnerable in the wake of the stunning Brexit vote, and may finally be willing to do more to cater to Big Pharma now.


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