Portugal debt crisis strangling pharma sector growth

The Portuguese pharmaceutical market has struggled in recent years, and new government policies restraining the profits of the generics industry are likely to aggravate these existing problems, states the latest report by research and consulting firm The authors.

In May 2011, Portugal's government agreed a reform program with the European Union and International Monetary Fund (IMF) to restore market confidence and raise potential growth, receiving a financial rescue package of $108 billion. However, this came with an obligation to enforce health care budget cuts as part of austerity measures, and these efforts threaten to damage the country's pharma industry, says the report.

The government introduced a pricing policy in 2012 guaranteeing that any new generic drug entering the market is priced at least 50% lower than its branded equivalent, aiming to increase the use of generics as a cost-containment tool and reduce public healthcare expenses. This is hampering the generic market, with an estimated value of $670.6 million for 2012 dropping significantly from $745.1 million in 2011.