Global Insight Perspective | |
Significance | Farmaindustria has predicted that the Spanish pharma market will grow by 6-7% in 2008, with Zeltia, Faes and Grifols the leading domestic investors. |
Implications | Farmaindustria is hoping to sign a pact with the government this year, which should further improve operating conditions for pharmaceutical companies in Spain. |
Outlook | Steady rises in R&D investments in Spain signify renewed interest in the growth potential of the Spanish pharmaceutical market, and the pact with the government is seen as incremental to ensuring patent legislation and other benefits for the innovative pharmaceutical sector. |
The association of innovative pharmaceutical companies operating in Spain, Farmaindustria, is moderately optimistic about the growth of the domestic pharmaceutical market, projecting a growth rate of 6-7% year-on-year (y/y) this year, reports Gaceta de los Negocios. Farmaindustria has high hopes for the future of R&D activities in this sector, which has suffered in the past due to government policies. The new pharmaceutical reference pricing system, which came into effect in March, allowed the Spanish government to exercise ongoing control over prices, with regular (at least six) monthly downward price revisions. Branded-drug manufacturers are disproportionately hurt, with Farmaindustria estimating a 750-million-euro (US$1.16 billion) reduction in their overall revenue in 2007—a 7.5% fall in total annual sales of branded drugs.
Zeltia, Faes Farma, Grifols Lead Spanish R&D Investments
Spanish pharmaceutical companies Zeltia, Faes Farma and Grifols are leading the pack in terms of R&D investments. According to the latest information provided by Gaceta de los Negocios, the top position in 2006 was occupied by Zeltia and its biotechnology unit PharmaMar, which is ranked at a 249th position in the European Union (EU), followed by Faes Farma and Grifols.
Leading Spanish R&D Companies | |||
R&D Investment, 2006 (mil. euro) | % Change Y/Y | EU Ranking | |
Zeltia | 49.7 | 8.85 | 249 |
Faes Farma | 7.78 | 60.4 | 703 |
Grifols | 4.85 | -4.2% | 876 |
Source: Gaceta de los Negocios | |||
Faes Farma's significant R&D investment has been influenced by the development of lead drug candidate Bilastine (see Spain: 5 September 2007: Faes Farma Expects to Finish Bilastine Clinical Trials in Q2 2008).
Investment in the Spanish pharmaceutical R&D sector has been on a downward spiral for several years, and 2007 was the first to register growth in seven years, at 15.1% y/y to 922 million euro (see Spain: 28 May 2008: Pharmaceutical Companies Invested 15.1% Y/Y More in R&D in Spain During 2007, Says Farmaindustria). The growth was reflected a change in attitude on the part of the government, with health minister Bernat Soria expressing his support for the industry's future (see Spain: 15 April 2008: Farmaindustria Pleased with New Spanish Cabinet).
Outlook and Implications
Farmaindustria's cautious optimism when it comes to the growth of the pharmaceutical market in Spain is influenced by two important factors. On one hand, the Spanish government's ongoing cost-containment policy—the latest example of which was the new reference pricing system implemented in March—intended to create 15 homogeneous groups of medicines for the system of reference prices, and will see a price reduction for 185 medicine presentations and a price update for medicines in Annex 5 (a formulary of cheaper medicines; see Spain: 19 February 2008: New Spanish Pricing Law to Cut Cost of 2,111 Pharmaceuticals). In March, price reductions of 0-3% affected 692 medicine presentations, followed by reductions of 10-25% on 661 medical presentations. Pharmaceutical companies have voluntarily reduced the prices of their drugs in accordance with the new order of reference prices.
An equally important development, going in Farmaindustria's favour, is the new "integral plan" to be signed this year with the Spanish government, which is a first step towards changing Spanish patent legislation. The changes are to go in favour of innovative pharmaceutical companies, which have been hit by the earlier entrance of generic copies on the market in Spain due to weaker patent protection laws (see Spain: 24 April 2008: Farmaindustria to Sign Pact with Spanish Government). The value of the Spanish pharmaceutical market is expected to reach US$18.4 billion by 2011.