Mixed Fortunes for Big Pharma as Spanish Generic Market Tops 8.5% Y/Y Growth in 2007

Pfizer Occupies Top Position in 2007

In 2007, U.S. pharmaceutical company Pfizer ranked first among the top-performing drug makers in Spain. Pfizer's Spanish turnover in 2007 amounted to 748.7 million euro (US$1.14 billion) and was 9.5% higher relative to 2006, according to Spanish daily Expansión. In second position was French Sanofi Aventis with 2007 turnover of 598.9million euro, up 13.68% year-on-year (y/y), closely followed by Swiss Novartis at 588.8 million euro, marking a 7.91% rise. Next came Spanish pharmaceutical company Almirall at 518.7 million euro, an increase of 2.96%.

While some companies, like French Sanofi-Aventis and German Boehringer Ingelheim (25.3%), recorded above-average double-digit sales growth in 2007, others like Bristol-Myers Squibb (BMS) and Abbott Laboratories, saw their sales drop. Among Spanish pharmaceutical companies, Almirall saw 2.96% sales growth in 2007, Esteve 6.7%, and Ferrer marked 8.7% y/y sales growth.

Eli Lilly's Zyprexa Top in Spain During 2007

Bestselling drugs in 2007 were prescription medicines, which saw an 8.11% rise in 2007 relative to 2006. U.S. Eli Lilly's antipsychotic drug Zyprexa was the top-selling drug in 2007 with annual sales of 135 million euro, an increase of 3.4% y/y. French Sanofi-Aventis's anti-thrombosis drug Plavix (clopidogrel bisulfate), and Pfizer's asthma medication Spiriva (tiotropium) registered the most impressive gains, with above 26% growth in sales for 2007. Drugs generally belonging to the insulin, anti-psychotics, asthma and anti-cholesterol therapeutic groups were the top-selling medications in Spain in 2007. In the past few years, innovative pharmaceutical companies have been hit hard by Spain's New Cohesion Law of 2003, which favours the prescribing of drugs by active principle, compounded by the implementation of a new reference-pricing system in 2007, with six-monthly downward price revisions as well as earlier competition from generic makers as a result of weaker patent protection (see Spain: 30 October 2007: Latest Spending Figures Highlight Growing Generic Consumption, But Discrepancies in Usage Across Spain).

Generic Market Blooms

The Spanish generic market registered solid 8.5% growth in turnover in 2007 (value terms), relative to 2006, with impressive 21.7% growth in volume terms. The greatest sales growth was evident for Israeli Teva, closely followed by domestic Esteve, Cinfa and Kern.

Spanish Cinfa had the biggest share on the generics market (21.5%), followed by domestic Normon (11.9%), Ratiopharm (11.3%), and Sandoz, the generics arm of Swiss multinational Novartis, (6.9%).

Outlook and Implications

The latest financial data show a mixed picture, reflecting various strategies in adapting to the recent changes on one hand, but also varying performance related to individual positioning on the market, as well as differing drug portfolios and sales methods.

Two main conclusions can be drawn:

1. Prescription drugs remain the best-selling group of medicines in 2007. Spain is a country traditionally dominated by branded prescription medicines, and this has only just begun to change.
2. Whereas in value terms the market is dominated by big multinationals, in the generic segment domestic generic manufacturers, e.g. Cinfa, have the highest market share (21.5%).

The fact that Israeli Teva managed to double its turnover in 2007 may however signal a toughening up of competition from international generic makers as they gear up for sustained generic growth in Europe during the coming years (see India: 6 November 2006: Thirst for Global Presence Spurs Indian Pharmaceutical Players Into Acquisition Frenzy).