Spain's pharma market resisting economic pressure, fueled by hospital sector

The Spanish pharmaceutical market is the fifth largest of the European Union's 27 member states. Pharmacy sales are growing at a slower rate compared to those in hospitals, but they still represent about three quarters of the market at manufacturers' prices, notes a new report from Espicom Business Intelligence.

In spite of the economic crisis, sales of prescription-only medicines (POM) are performing well, as most of them are for the elderly and therefore subsidized. Sales of over-the-counter (OTC) medicines, however, have been affected by the economic slowdown and increasing competition between pharmacies and other establishments.

The effects of the crisis on the pharmaceutical industry are tangible, as the crisis obliges pharmaceutical companies to prioritise R&D, streamline employment and improve competitiveness. Some international companies with subsidiaries in Spain have decided to cut their personnel or close their plants, but overall the national research-baseddrugmakers' association, Farmaindustria, has negotiated a plan for the sector with the Ministries of Health, Industry and Science & Innovation.

Reference pricing is an effective measure to contain SNS pharmacy prescription expenditure. The Ministry of Health has approved its reference pricing revisions for 2009. The new law includes 13 new groups of medicines under reference pricing and reviews the existing 150 groups of drugs. In total, reference pricing covers 160 groups of pharmaceutical products in 2009. With these revisions, savings are valued at 380.0 million euros ($555.8 million) for the SNS and 23.0 million eurosfor consumers in 2009, which are much higher than savings obtained in 2008, notes Espicom.

In the last two years, the industry has responded well to a more relaxed regulatory market environment, with a stable reference pricing system, therefore it has invested more in R&D. The draft of the 2009-2012 Profarma program, presented in June 2009, aims to take into account not only R&D investments but also production capabilities, which might affect companies which only have R&D capabilities in Spain. The objectives highlighted by the draft are aligned with the agreement signed between Farmaindustria and the government in March 2009.

Vaccine production planned

In June 2009, the Ministry of Health, the region of Andalusia and ROVI signed an agreement to build a vaccine manufacturing center in Granada, Andalusia. This will be the first center for the production of vaccines against normal and pandemic flu in Spain, and the ninth in Europe. The manufacturing plant is expected to be fully operational in 2012. Investments amount to 60.0 million euros, most of which will be invested by ROVI. The new plant will employ about 250 people.