Pharma could be top performer in recession, says AZ chief
pharmafile | December 4, 2008 | News story | Sales and Marketing |Â Â AZ, hcÂ
AstraZeneca's chief executive David Brennan says the pharmaceutical industry could be one of the top performing sectors during the global recession, but must keep on adapting its business model.
Addressing an industry audience at a Financial Times conference in London, Brennan harked back to the recession of 1990-91, when pharma's stocks had provided a 'safe haven' for investors while other sectors were performing badly.
Brennan says the sector as a whole was the best performing of all industries over the five consecutive quarters of recession experienced 18 years ago.
He said talk of pharma being 'recession proof' was again in currency, and agreed that healthcare was needed regardless of economy. But he stopped short of forecasting that pharma stocks would shine in 2008-9, as the world enters another downturn.
"I don't think any of us can say history will repeat itself," he cautioned.
He said long-term changes in the world's health priorities meant the industry needed to refocus work with healthcare systems, to manage chronic diseases in ageing populations and to invest in preventative medicine.
These factors were the strongest influence on the industry, which was "more driven by biology than it is by economics".
He said pharma needed to respond to these 'tectonic shifts' in healthcare but admitted that pharma could feel the squeeze if the downturn is severe.
"If the recession is in fact deep and long then government revenues are going to be affected, and that could have a significant impact across all government sectors, including healthcare."
Also speaking at the conference was William Burns, head of Roche's pharmaceutical division.
Burns said the economic turmoil and massive sums loaned by government to banks would inevitably have an impact on healthcare systems.
"We have yet to see that played through," he warned. He balanced this with a confident view that governments would have to work with pharma and others to address the growing demands of healthcare.
"I don't fear it because I think we are part of the solution, not part of the problem," he said.
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