Lundbeck Europe strategy leans on regional partners as patents expire

Michala Fischer-Hansen returned to the pharmaceutical industry in 2024 after nearly two decades at Novo Nordisk, this time as executive vice president and head of Europe and international markets at Lundbeck. The Lundbeck Europe strategy she now runs is narrower than the one she inherited, with more money directed to neuroscience research, fewer markets served by the company’s own affiliates, and a wider circle of regional distribution partners.

Her remit accounts for slightly less than half of group revenue. The United States drives much of Lundbeck’s growth, while her region grows at lower levels. Lundbeck medicines reach roughly 80 markets, and the company covers 22 of them directly through its own affiliates, following a change to its operating model last year. The geography runs from Canada to Brazil, Australia, Japan and China, and across Europe.

“Healthcare is global, but it is also profoundly local,” Fischer-Hansen said. “You have to talk to the hospitals and the reimbursement authorities, and be in touch with the community. We have global products and global strategies, but implementation is local.”

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Lundbeck Europe strategy: from 51 affiliates to 22

When Fischer-Hansen joined, Lundbeck ran 51 affiliates, yet 80 per cent of revenue came from 12 markets. Set against the group’s funding requirements, those 51 could not all be served equally.

“If you have USD 100 and ask where to place it to maximise value, the answer is unlikely to be a small market,” she said. “We wanted to do right by those markets, but we were possibly not the right ones to do it. We would simply be spreading resources too thinly, and we did not want to jeopardise patient access.”

The answer was a regional partner model, chosen over a single global partner to keep depth of local knowledge across the Middle East and Africa, Latin America, Europe and Southeast Asia. Working with several companies at once gives those partners a larger footprint, more resources, more scale and more synergy than Lundbeck has itself. “In the long run, they can broaden patient access beyond what we could achieve ourselves,” she said.

Around 600 employees worked in the markets that changed hands, many of them long-serving. Most moved to the partners and still sell Lundbeck products.

Germany allows twelve months to agree a price

Germany is a must-win market, and Lundbeck’s presence there is not large today, which is exactly why it counts as a focus country. Under the German mechanism, an EMA approval allows a company to enter the market while reimbursement is negotiated. An initial price, set by the manufacturer, then forms part of the talks with the authorities, and there are twelve months to agree the reimbursed price. Agreement brings broad access across the country.

The risk sits at the twelve-month mark. By then patients are already on the product, and failure to agree can mean withdrawing it. Germany still compares favourably with markets where access can take up to 24 months from approval.

The July reform delivered further price cuts on products that were already registered. Germany has economic challenges to resolve and savings to find, and the pharmaceutical industry tends to become part of that discussion. Defence and energy need funding, alongside the demands of an ageing population.

“Ask whether a healthy population is a priority, and the answer is yes. Drill down, and the question becomes whether health is treated as a cost line or as an investment in the future of your population,” she said.

US pricing pressure now shapes European launch decisions

Pricing differences between the US and the rest of the world are not new. What is new is the geopolitical layer: decisions taken in Europe can now jeopardise a company’s business in the United States, where most pharmaceutical groups earn the bulk of their revenue. “The whole industry is now asking the same question: what do we do if launching in Germany or France risks the US price?” Fischer-Hansen said.

Drug development takes around ten years, so choices made now about innovation programmes will not reach markets for five or ten years. Companies are already weighing whether to run a clinical trial in Europe, or whether to file for registration at all. Her concern is that cumulative pressure on prices will shape how the industry views Europe as a place to launch, with the risk of losing ground to China and the United States.

European harmonisation stops short of pricing

Europe does understand the problem, she said. There is a life sciences strategy, shaped in part by Denmark, a strong scientific tradition, a strong talent base and considerable manufacturing. The gap is execution and urgency, because decisions driven by today’s environment will not be felt for years.

EMA approval gave companies a single registration, which matters for a mid-sized group, and joint clinical assessment may add another. Reimbursement still runs through 27 member states, and pricing is decided nationally, which keeps the process complicated. Lundbeck’s majority owner, the Lundbeck Foundation, allows the company to take a long-term view of brain health, and much of its production stays in Europe.

One idea raised in policy circles, borrowed from the defence industry, is to allocate a share of each country’s GDP to innovation. Fischer-Hansen returned to the same question: whether health is an investment in the productivity of a population or a cost to be managed. “What we need is to understand the terms under which we operate, and that predictability is becoming increasingly important,” she said.

“Europe has a choice about how it supports and strengthens the innovative industry it already has. If we want Europe to remain a place where innovation arrives early rather than late, we need to work together to ensure that it remains attractive for investment in innovation,” she said. Patients across Europe need access to innovative medicines now and in the future, and she warned that continued pressure on healthcare budgets could have unintended consequences for that investment.

Source: PharmaBoardroom interview with Michala Fischer-Hansen, EVP and Head of Europe & International Markets, Lundbeck