The third quarter isn't looking pretty for drugmakers. Analysts are expecting most major pharma companies to report lower earnings year-over-year. Not that this is a surprise. During the last round of earnings reports, several Big Pharma execs lamented their diminished prospects for the second half of 2010.
Why the pain? Most point to pricing pressures, whether from U.S. healthcare reform--which requires drugmakers to launch new Medicare drug discounts--or from European price cuts. You'll recall that Greece, Spain and Germany have forced key drug prices downward as they seek to cut healthcare costs. Then there are the usual pressures from generics.
As of yet, no one's sure just how the pricing changes will shake out. So, as Reuters reports, all eyes are on Roche, which will be the first of Big Pharma to unveil its Q3 numbers. "Roche's results will be the first indication as to the impact of price pressures on the industry and could shed some light as to whether certain treatments or countries are more affected than others," Vontobel analyst Andrew Weiss tells the news service. So keep an eye out tomorrow for the Swiss drugmaker's announcement.