Roche Ties European Investment to Drug Rewards

Ulrike Isselhard, a mother of three from Bamberg, Germany, takes an experimental pill each morning and credits it with her recovery from breast cancer. For close to a year, cancer upended her life. Surgery removed a breast. Two rounds of chemotherapy left her exhausted, stripped away her optimism and cost her her hair. Now she’s back at full-time work, cycling more than 3 kilometres to her office. “My life is exactly like it was before I got sick,” she told Bloomberg. “Except that I don’t need to wear a bra anymore.”

Her experience sits at the centre of a much larger argument: who pays for medical progress, and on what terms?

The Drug Behind the Story

The pill, giredestrant, is a candidate Roche is developing as a daily treatment to prevent breast-cancer recurrence. Bloomberg reported that the Swiss group is counting on it to return to the front ranks of cancer treatment after losing ground in the growing oncology market. Roche says the drug could one day surpass its former blockbuster Herceptin. The company is also investing in multiple sclerosis and oncology more broadly. Sales of older treatments are fading, and Roche needs new medicines and a recovery in diagnostics.

A Chief Executive’s Warning to Europe

Roche chief executive Thomas Schinecker used a Bloomberg Television interview to deliver a blunt message: Europe’s lack of support for pharmaceutical innovation, he argued, deprives patients of access to the newest medicines. “The US and Asia really play to win, and I feel Europe is more and more playing not to lose,” said Schinecker, 51. Roche, he added, would “only invest in countries in the future that are also going to reward innovation.”

Roche paused investments in Germany to protest the government’s cost-cutting health-care reform. Schinecker said on Thursday that Germany and other countries were “not really investing in growth,” echoing criticism from others in the industry. Eli Lilly, the U.S. drugmaker, and Germany’s Boehringer Ingelheim have both said they would cancel some investments in Germany.

Governments face real pressure. European states are trying to cut costs and tackle ballooning deficits, making health budgets an obvious target. That tension lies at the heart of the dispute: public systems must keep medicines affordable for everyone, while companies say they’ll direct money toward markets that pay more.

Where Roche’s Money Is Going

Roche is shopping for new medicines to replenish its pipeline. Since August alone, it has struck six agreements in China. Asia accounted for half of Roche’s deals last year, Schinecker said, with the remainder in the United States. By that measure, Europe is already absent from the dealmaking.

The Numbers Investors Watched

Roche reported quarterly sales above expectations on Thursday, but kept its annual outlook unchanged, disappointing investors who hoped for an upgrade. Quarterly revenue rose 8% to CHF16.1 billion ($19.7 billion). Xolair, an older asthma and allergy drug first approved more than 20 years ago, contributed to that growth despite facing cheaper competitors. Doctors also use it to reduce the risk of dangerous reactions such as anaphylaxis in people with food allergies. Roche expects Xolair to keep growing next year despite cheaper copies. Newer products gained too: Vabysmo for eye disease, Ocrevus for multiple sclerosis and Hemlibra for hemophilia.

The company repeated its forecast for high-single-digit earnings growth and mid-single-digit revenue growth for the year. Michael Leuchten, an analyst at Jefferies, wrote that the decision not to raise guidance “should raise some questions about the growth trajectory into 2027.” Roche shares fell less than 1% in Zurich. They had risen about 19% in the year to Wednesday, ahead of other large European pharmaceutical companies. Novartis, facing a patent cliff and recent research setbacks, had gained 16%.

Why This Matters: For patients like Isselhard, a new medicine can mean the difference between a lost year and a restored life. Schinecker’s argument—that investment will flow to whoever pays most—puts European governments in a bind. They’re trying to rein in deficits while keeping innovation close to home and treatments within reach of every patient, not only the well-insured. The dispute is playing out country by country, with Germany’s reform already prompting paused or cancelled investments. A coordinated European approach to pricing, research funding and access would give governments and companies a clearer deal than separate national standoffs. Without one, Europe’s patients may wait longer for the newest drugs while deals, as Roche’s China agreements show, are signed elsewhere.