Roche’s chief executive has stated that drugmakers need to keep producing innovative products or face going to the wall.

Severin Schwan was speaking to the Wall Street Journal and said that the global financial downturn, coupled with an incoming Democratic administration in the USA, means that pharmaceutical firms need to prove the value of their new products. The current environment means that healthcare insurers and other payers are less willing to cover new drugs that fail to show a clear benefit over older ones.

This may force some drugmakers into bankruptcy, mergers or diversification, he told the WSJ. "Those who fail to bring sufficient innovation will be squeezed out of this market," he said, adding that "no one is immune to this failure. That applies equally to small companies and big companies."

In order to meet this challenge, Dr Schwan added that Roche will increase its R&D expenditures as a percentage of sales. He also believes that the Swiss major is well-positioned to succeed given the strength of its oncology franchise.

Dr Schwan also confirmed that Roche is still pursuing its proposed takeover of Genentech. The company has offered $43.7 billion, or $0.89 per share, to buy the 44.1% it does not already own in the US biotechnology giant but that bid was rejected as being too low. Nevertheless, he told the WSJthat "we are committed to the deal, and as such, we are committed to [making]...this transaction happen".