Europe’s pharma fights crisis
26.06.2012 - A lobby association sees the European pharma industry in danger and asks EU leaders to react before supply shortens and innovations decline.
Brussels – Will the economic crisis of Southern Europe bleed through to European drug makers? The EU pharma industry association EFPIA thinks so and therefore demands two major concessions. Thus far manufacturers of pharmaceuticals have had to compensate for payment arrears and negotiated steep price cuts. In a letter to EU leaders, they now express their belief that only wide-ranging concessions will guarantee the continued supply of countries like Spain, Portugal and Greece.
Sir Andrew Witty, CEO of GlaxoSmithKline plc and currently head of Europe’s pharmaceutical association EFPIA, sees danger springing up from drug reference pricing and parallel trade. In an open letter to the European Heads of States and Governments Witty demands the exclusion of countries undergoing fiscal restructuring programmes from those which the drug referencing price system is based on. Moreover, he wants temporary bans on the re-export of medicines from low-cost to high-cost countries. The ban is said to be also responsible for supply shortages as seen recently in Romania and Greece.
The crisis-stricken countries now benefitted for more than two years from discounts worth €7bn. However, for instance, Greece has still not paid for 99% of the medicines received in the first quarter of the year. Continued losses will ultimately threaten the pharma industry as a whole – responsible for 660.000 jobs and an EU trade balance surplus of €48bn, writes Witty. Time to act for Commission President Jose Manuel Barroso and Council President Herman Van Rompuy. Witty’s letter comes just in time for the June 28-29 summit in Brussels.