Europe is fast becoming pharma's toughest playing field. In a not-too-cheery review of the pharma industry, Moody's singled out the EU for particular doom and gloom, saying that pricing pressure will continue to intensify. Meanwhile, Daiichi Sankyo, which is planning to expand in Europe, noted that the market poses "enormous challenges" to drugmakes.
As Reuters reports, Moody's expects that continued problems with government finances--think Greece's public debt woes--will be an ongoing drag on pharma. Already, European governments such as Germany, Spain, and yes, Greece, have slashed drug prices, cutting into branded drug sales in the region. "Further price cuts are likely in the future, especially in countries that are facing sovereign debt crises or very large budget deficits," Moody's analyst Marie Fischer-Sabatie told the news service.
In fact, branded drugmakers stand to suffer not just from lowered prices on their products in Europe, but from increased use of copycat drugs. Some countries with severe deficits, such as Spain and Portugal, have generics-utilization rates much lower than in the U.S. So, cost-saving measures are likely to include more generics.
The challenges in Europe are so great that Daiichi felt the need to acknowledge them even as it announced plans to grow in the region by setting up a new oncology business unit. As InPharm reports, Daiichi's European chief, Reinhard Bauer, said that price restrictions will continue to hurt pharma sales there. He blamed slow cost-benefit assessments and "arbitrary" pricing for the problem, adding that his company will have to work more closely with governments to get the best prices for its products.