Impact of European Austerity on Pharmaceutical policy and pricing
Staying competitive in a challenging environment
This report presents the Centre for Health Solutions views on:
- current challenges faced by the pharmaceutical industry due to on-going austerity in Europe
- mechanisms being employed by governments to reduce overall spending on pharmaceuticals
- the likely future pharmaceutical landscape and the implications for pharmaceutical sales and profitability within Europe
- options available to the industry that will allow them to remain competitive in this challenging environment.
The current financial climate has placed significant pressure on public spending and while the majority of governments’ acknowledge healthcare provision to be strategically important, their willingness and ability to pay is subject to increasing pressures. As a high percentage of healthcare costs are fixed and difficult to tackle in the short term, governments are adopting a number of aggressive pricing strategies to exert downward pressure on consumables, including drugs. This includes the price they are willing to pay for new drugs as well as introducing policies to promote the use of cheaper, generic equivalents. Indeed, evidence indicates that European Union countries are now paying less for their medicines. This, along with the high levels of debt owed by governments who are struggling financially to pharmaceutical manufacturers, is having a significant, negative impact on the operations of pharmaceutical companies active in Europe.