Europe is making the U.S. and Asia look much sweeter to drugmakers. Price cuts, slow adoption of new medicines, and, of course, unpaid bills, have disillusioned pharma companies accustomed to counting Europe among their better markets, Reuters reports. So, drugmakers are pulling back in cheapskate markets and placing their bets where the money is.
And the money is still in the U.S., perennially the world's top pharma market, and, with healthcare reforms, increasingly in Japan, GlaxoSmithKline ($GSK) CEO Andrew Witty (pictured) recently said. "Europe has unfortunately slipped in terms of its willingness to pay for innovation," said Witty, who also happens to be this year's chairman of the European Federation of Pharmaceutical Industries and Associations. "We're now at a point where we have to take the view and I think face the reality that really it's about the U.S. and, excitingly anew, it's about Japan in terms of where innovation should be driven."
Yes, drugmakers have had to swallow higher rebates for Medicare and Medicaid patients in the U.S., and they're looking at the possibility of even more drug-spending cuts. But Germany's new pricing scheme--which requires new meds to be deemed superior to old ones in order to carry a superior price tag--is potentially so onerous that some companies have chosen not to launch there. In cash-strapped Greece, drugmakers are substituting older, cheaper drugs for the newest meds.
In general, the U.S. adopts new drugs more quickly, Reuters reports; in 2010, the it accounted for 61% of all sales of meds launched during the previous 5 years, while Europe's share was just 22%. Japan has historically been slow to take up new products, but regulatory changes are aimed at shortening that lag time, threatening to leave Europe even farther behind. "This is a problem that is growing by the day," Efpia Director General Richard Bergstrom said. "The euro crisis has triggered the worst in the national governments."
- see the Reuters story