BIG PHARMA UNDER PRESSURE The recession is now biting the pharma sector hard. Following nearly 40 years of continuous growth, healthcare spending in the EU has started to fall. Sarah Houlton reports.
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his is the first year there has been a drop in EU healthcare spending since 1975, according to the OECD and the European Commission. Their report, ‘Health at a glance – Europe 2012’ indicates that healthcare spending fell Europe-wide by 0.6 per cent in 2010, a significant reduction on the average annual growth of 4.6 per cent the sector experienced throughout the previous decade. Unsurprisingly, the worst effects were evident in those countries most badly hit by the economic crisis. The fall in Greece, for example, was almost 7 per cent – a dramatic swing away from the 6 per cent annual growth in the country from 2000–2009. While these figures represent the entire healthcare market, in practice pharmaceuticals are a large proportion of this – around a fifth. The report warns that there is a significant danger that these spending cuts will have a long-term impact on healthcare outcomes. The long-standing industry complaint about the willingness of governments to pay for new medicines and make them available to patients in a timely fashion continues. In 8 Industry Europe
the UK, for example, the Office of Health Economics has predicted that over the next three years the spending on such products will rise by about 1 per cent a year. This is despite the anticipated £3bn in savings the NHS will make over that period by the growing availability of cheaper generic versions of big-selling medicines as their patents expire. Indeed, several such medicines became subject to generic competition in 2012. Perhaps the biggest drop was in sales of Plavix (clopidogrel), Sanofi’s blockbuster blood thinning drug. In 2011 it sold more than $9.3bn worldwide; this dropped by about 70 per cent as cheaper generic versions became available. As can be seen in the Table, sales losses from patent expiries in 2013 is likely to be lower, with the biggest seller, Cymbalta (duloxetine), only at number 17 on the 2011 worldwide total sales list – and half of them are biologics, which are currently much more resistant to competition. While this offers industry a little respite, the sales losses in subsequent years will rise again, with bigger-selling drugs due to face competition in 2014. These include Astra-
Zeneca’s Nexium (esomeprazole), at number five on the list with 2011 sales of almost $8m – and three of the products ahead of it are already patent-expired.
Innovation opportunities While the days of the $10bn mega-blockbuster are over, many unmet medical needs remain, providing significant opportunities for pharma innovation. Several first-in-class drugs have been given positive opinions by the European Medicines Agency. One of these, AstraZeneca’s Forxiga (dapagliflozin), is a medicine for Type II diabetes that works in a new way – it inhibits a hormone in the kidneys that promotes the reabsorption of glucose by the bloodstream. This improves the control of patients’ diabetes without raising the amount of insulin secreted. Irritable bowel syndrome now has a new treatment – Constella (linaclotide) from Almirall. This is a synthetic peptide designed to improve the quality of life of patients suffering from IBS with constipation. Although about 20 per cent of the population are believed
