Drug research feels Europe’s pain

Pharma companies see drops in revenue amid European austerity measures.

As Europe’s economy reaches crunchpoint, experts are warning that countries’ responses to the financial difficulties could end up stifling drug development.

Industry representatives say that in Mediterranean countries in particular, healthcare spending has been targeted for cutbacks, leading to huge drops in income for drug companies. And as financiers sweat over these nations’ ability to repay their debts, drug companies are owed some €10 billion (US$13.8 billion), according to the European Federation of Pharmaceutical Industries and Associations (EFPIA) in Brussels.

Health workers protest against spending cuts in Barcelona, Spain.
Credit: Emilio Morenatti/AP

In Spain, for example, the pharmaceutical industry has been hit by three laws in 18 months designed to reduce government spending on drugs, complains Bertil Lindmark, chief scientific officer of the Barcelona-based Almirall, Spain’s largest investor in pharmaceutical research and development. For example, these laws have made it mandatory for doctors to prescribe only generic drugs and have forced down drug prices.

As a result, Lindmark estimates that the industry in Spain has lost around 30% of its revenue.

That is reducing the number of drugs that companies are able to develop, he says. “We’re managing, but we’re increasingly having to prioritize and be very careful with our investments.” For example, he says that scientists at Almirall will now focus on developing respiratory drugs, at the expense of other candidates that have shown promise for areas including gastroenterology and dermatology.

At present, the company has “the best pipeline in our history”, says Lindmark, making it especially frustrating to have to slow progress in some areas. He adds that the austerity measures seem “a bit unfair” as they have hit companies that invest heavily in research just as hard as companies that may be less innovative.

Although all industries are suffering, drug companies, with their dependence on state spending, feel particularly hard done by. “Everyone is very concerned about this,” says Richard Bergström, director general of EFPIA. “We’re not through it. This is a thriller every day.”

Adding to pressure from the austerity cuts are the mounting debts owed to some pharmaceutical companies. Bergström told Nature that at present, hospitals and health authorities owe his organization’s members some €10 billion for drugs delivered.

The eurozone’s problems are also threatening to worsen existing inequalities in access to medicine, Bergström says.

The industry has long been wary of richer countries demanding access to drugs at similar prices to those charged in poorer nations. With countries such as Greece and Spain actively driving down prices, Bergström says companies may be unwilling to launch medicines in markets with heavy price control without first establishing them in more wealthy healthcare systems.

Credit: Emilio Morenatti/AP

About this article

Cite this article

Cressey, D. Drug research feels Europe’s pain.
Nature (2011). https://doi.org/10.1038/news.2011.634

Download citation

Recommended For You

About the Author: livescience

Leave a Reply

Your email address will not be published.