Now France and Italy join European moves to cut budget deficits by slashing drug prices

Pharmaceutical companies in Europe are seeing their worst fears being realized after first Germany, then Greece and Spain imposed swinging drug price cuts (The Pharma Letters passim), two more - France and Italy - have announced similar action, aiming to reduce their health care spending and cut budget deficits.

France revealed plans to cut drug prices by some 100 million euros ($122 million) this year, as part of a 600 million reduction in health care expenditure, while the Italian government aims to reduce generic drug prices by 12.5% from this month until the end of the year.

"The earlier implementation of the already approved price controls is very modest," Morgan Stanley said in a research note yesterday quoted by Interactive Investor, adding that the drugs affected include cholesterol lowering statins and blood pressure lowering sartans. Companies affected include France's leading drugmaker Sanofi-Aventis and also the smaller Ipsen.