95% of drugmakers operating in Spain say their sales have fallen by an average of 15% over the last two years, as a result of the government's healthcare cost-cutting initiatives which began in 2010, a new study reports.
Nevertheless, manufacturers are still keen to stay in the market, and are pursuing a variety of strategies to enable them to do so, according to the survey, which is published by Europa Press. Measures which companies are currently working on for the short and medium term include: re-establishing pricing margins - 86% of companies; reinforcing their regulatory environment - 75%; and - lowering costs and infrastructure - 56%.
Looking longer term, the survey also finds that: 71% of companies are looking to grow through improved product portfolios, with an emphasis on R&D; - 58% are looking to divesting their non-strategic subsidiaries; - 54% plan to increase both prices and production volume; and - 50% are considering strategic partnerships and joint ventures with Spanish or multinational partner
Commenting on the survey findings, analysts at IHS Global Insight point out that while the government austerity measures have had a strong impact on drugmakers' production and sales capacities, the Spanish market is still highly competitive and firms are determined to stay in it, hence this variety of solid plans to boost their businesses in the short to medium term.Meantime, Business Monitor International (BMI) is forecasting that full-year 2012 pharmaceutical sales in Spain are set for fall to 18.34 billion euros from 20.15 billion euros in 2011, representing a drop of 9% in local currency terms and of 16.8% expressed in US dollars.
The sharp drop in Spain's public drug spending in the first four months of 2012 serves as a warning for all continuation of a fall in spending for the rest of the year, it points out."The success of the implemented policies may encourage the enforcement of further cost-containment measures which, together with the ongoing hospital debt situation, seriously hampers the country's attractiveness as a location in which to sell drugs, despite its favourable demographic characteristics,” according to BMI.
While Spain offers investors positive factors such as its large drug market, it has problems - other than its cost-containment initiatives - which include low population growth, cumbersome bureaucracy and provincial differences regarding drug regulations and reimbursement, it says.
BMI quotes Spanish health ministry figures which show that government spending on medicines fell 24% annually in July last year, that the number of prescriptions for the month was down 14.14% and that average government spending on prescriptions fell 11.41%. "Notably, inflation increased by 2.2% and drug prices rose 36% during the period,” it adds.