We price drugs in line with innovation potential, says Bayer CEO

Bayer CEO: We price drugs in line with innovation potential

When it comes to drug pricing and the political rhetoric coming out from the U.S. administration, the chief executive of pharmaceutical firm Bayer told CNBC that it prices products in relation to the environment and each ones capability.

"We price our drugs in line with their innovation potential and in line with the competitive environment," Werner Baumann, CEO of Bayer, told CNBC on Wednesday.

Shortly after Donald Trump was sworn in as the 45th U.S. President, he met with pharmaceutical executives to discuss drug manufacturing and pricing.

In the meeting, Trump told attendees that the government had been paying "astronomical" prices for medicines in its health programs for older, disabled and poor people. Trump went on to tell the drugmakers that he wanted to make it simpler for pharma giants to win regulatory approval for the products they want to bring to market.

Commenting on the meeting, of which the German drugmaker did not attend, Baumann said he thought it was important for the U.S. president to potentially learn more about the industry.

"I think even more importantly, President Trump could develop a better understanding of the overall health care market, the industry and what is driving cost up really."

"If you look at pharmaceutical pricing - as a total share of health care funding it actually has not changed since the early [1960s] and has been very stable around 10 percent."

Baumann said that the pharmaceutical and life sciences company has been "very responsible" in pricing over recent years, giving examples such as its Kogenate and Kovaltry products, which had been "very stable" in pricing.

The CEO went on to add that Bayer was looking forward to what was going to come, but would make sure it was prepared for any changes as well.

Pharma business is doing very well: Bayer CEO

Overall, Bayer's pharmaceutical business "continues to do very, very well" and expects the division to continue to perform well during the course of 2017, the CEO added.

In the company's latest earnings report, released Wednesday, Bayer revealed that EBITDA before special items for its pharmaceuticals division increased by almost 14 percent to 5.25 billion euros ($5.5 billion).

Bayer is also tied to the U.S. when it comes to its $66 billion takeover of U.S. seeds maker . In the earnings release, Bayer said it was "making good progress" with the agreed acquisition, and that it remained positive that the transaction would be completed before the end of the year.

"The combination of Bayer's crop business and Monsanto's business is actually all about innovation," Baumann told CNBC, saying the deal was "highly complementary" to both parties, with a great regional fit.

"The fact that with the combination of both companies' competencies, we can develop better solutions faster, that will provide benefits to farmers and people in the world, by providing affordable and safe food for an ever-growing population."

In its report, the company said full year revenues had advanced by 1.5 percent, hitting nearly 46.8 billion euros; adding that for 2017 it expected a medium single-digit percentage increase in adjusted earnings before interest, tax, depreciation and amortization (EBITDA), according to Reuters.

Monsanto deal is a complementary merger, says Bayer CEO

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