By Ben Hirschler
LONDON, Oct 28 (Reuters) - Pharmaceutical companies cannotdepend on ever increasing prices in the United States and willneed to find a new balance between incentives for innovation andaccess to medicines, according to the chief executive ofGlaxoSmithKline.
High drug prices have come under fierce political firerecently in America, the industry's biggest and most profitablemarket, with Democratic presidential candidate Hillary Clintonattacking "excessive profiteering".
Worries about the fall-out have unnerved investors,triggering a sell-off in many pharmaceutical and biotech stocks,particularly those reliant on price rises to drive a largeproportion of sales growth.
"Clearly pricing has become a big focus point in the lastfew months," GSK CEO Andrew Witty said after reportingthird-quarter results.
"It is difficult to predict what exactly, if anything, willhappen in the legislative environment. However, the marketitself, regardless of legislation, is beginning to create moreprice pressure and negotiation points than we have seen in thepast."
Witty argues his company is well placed in the loomingpricing crunch, following its move to shift emphasis towardsselling more affordable consumer health products and cheapermedicines.
That strategy included a decision to sell its high-marginmarketed cancer drugs to Novartis, promptingscepticism among some investors who questioned the logic ofexiting one of the hottest areas of medicine.
Excitement about a raft of pricey new drugs for cancer andother serious diseases has been a major driver of pharma andbiotech stocks in the last three years, although Witty cautionedthe good times would not necessarily last.
"While the industry has been through a nice purple patch forthe last two or three years, it is quite hard to conclude thatthat purple patch will continue in perpetuity," he said.
The challenge for the future would be to develop a moresustainable pricing strategy that balanced the need forinvestment incentives with the requirement that medicines bemade available to people from all income groups, he said.
(Editing by Adrian Croft)