A new study shows what Big Pharma has already suffered: The drug industry has been a "prime target" for cost-cutting as governments sought to lower their healthcare costs. And which governments have hit pharma hardest? Those in Europe's most cash-strapped countries.
Among the nations in the Organization for Economic Cooperation and Development, health spending grew about 5% annually from 2000 to 2009, but that growth shrank to about 0.5% beginning in 2010. That trend continued in 2011, and, according to preliminary figures, extended into 2012 as well, PharmaTimes reports.
The declines hit all sectors in healthcare, but pharma has suffered bigger blows. Overall, for pharma, spending fell slightly in 2010 and dropped more precipitously in 2011. In some countries, the cuts were dramatic: Portugal, Greece and Spain each slashed drug spending by 20%, 13% and 8%, respectively.
We've seen individual evidence of this, with Big Pharma's European sales taking a slide over the past few years. GlaxoSmithKline ($GSK), for instance, had to reduce its forecasts--and push back its deadline for returning to sales growth--because of European drug cuts. The U.K.-based company cut jobs there, too, because of spending cuts. Pfizer ($PFE) blamed hundreds of job cuts in Spain on the country's pricing policies.
Some companies have kicked back at price cuts by pulling more expensive products from the market. Other have taken a more creative approach, with discounts, guarantees, two-for-one offers and other pricing moves designed to avoid triggering reference-pricing cuts in other countries.
- see the PharmaTimes story