Spain’s austerity sees pharma market shrink by €2 billion
pharmafile | July 14, 2011 | News story | Sales and Marketing | Spain, healthcare costs
Spain’s pharma industry has hit out against the drastic budget cuts the government introduced last year, saying they’ve led to a record fall in spending and delayed payments from hospitals to companies.
The country’s industry organisation Farmaindustria says Spain’s system of devolved regional government is also undermining confidence and deterring pharma investment.
At Farmaindustria’s recent annual meeting, its president Jordi Ramentol and chief executive Humberto Harness both stressed how pharma was suffering from the cutbacks.
The president of Farmindustria said the value of Spain’s pharmaceutical market had fallen by €2 billion in a year, an 8% drop which is the greatest ever contraction of Spain’s pharma market.
One of the problems is a growing debt owed by hospitals to pharma companies. Farmindustria says there is now an average delay in payments from hospitals of nearly 14 months (410) days and total debts of more than €5 billion.
Jordi Ramentol: “With this measures, the government and the regions have put our industry into a critical situation: we can no longer contribute to the sustainability of the Sistema Nacional de Salud (National Health System) nor to the reduction of the Spanish public deficit.”
Farmindustria says initiatives introduced by some regions were very harmful for the industry and threatened to fragment Spain’s national pharmaceutical market. Spain has 17 semi-autonomous regions, which have some powers in deciding health policy and spending.
Pharma companies in Spain have laid off around 5,000 direct employees with a further 20,000 indirect jobs also hit in the last year or so.
The industry is warning of stagnation in Spain’s pharma sector, as foreign firms become deterred by the hostile environment.
The one source of optimism is a new strategic plan to make Spain’s pharma industry more competitive in R&D and more attractive for investment.
This plan was announced in September last year by the prime minister, José Luis Rodríguez Zapatero.
The plan covers four key areas: R&D, access to market, medicine use and industrial competitiveness. The aim is to create a permanent collaboration between the government and the sector to pursue its development and for it to be “compatible with the sustainability of the SNS and a high quality public health service”.
Farmindustria’s Humberto Harness says regional governments are having to cut back on health spending because Madrid has cut its grants for regional health services.
He said planned reforms and greater efficiency of the system could not improve patient services, and called for the government to increase spending.
He reiterated that Spanish health spending is two percentage points below the European average.
But the Spanish government is under intense pressure to reduce its national deficit, from international markets and from Eurozone leaders.
Spain is the Eurozone’s fourth biggest currency, and if it were to founder, it would pose an even greater threat to the whole economic bloc than Greece, Portugal or Ireland.
The IMF recently applauded Spain’s success in bringing the deficit under control, but says the economy is still in peril, leaving no room to relax the austerity measures.
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