Spain: Internationalizing to offset domestic downturn
As a result of contractions in the domestic market following the European financial crisis, pharma companies based in Spain have been forced to look elsewhere for business, beyond the borders of Spain and Europe to more far-reaching areas of the globe. Thankfully, the authorities helped out to make this process easier. “In 2012, Spain’s government took major economic reforms to help domestic markets for production factories including labor markets, containing deficit and regaining confidence from international markets,” says Maria del Coriseo, CEO of export and investment agency ICEX. “This meant that our risk premium decreased, and our public and private financing costs for the whole country became more reasonable and affordable. Companies made great effort too, continuing to invest in R&D and process innovation, obtaining their own brands, and generally maintaining flexibility and reliability while offering quality post-sales services. By the end of 2012, Spain had consolidated and also increased its exports by 38 percent, bucking the trend in surrounding countries. Today, the number of companies exporting is 50 percent higher than compared to three years ago. Companies with previous international experience became more focused in markets outside the European Union.”
For Ignasi Biosca, CEO of local pharmaceutical group Reig Jofre, focusing on international markets was the key success factor for the company, which has managed to do everything from acquiring international companies like Bioglan in Sweden in 2009 to obtaining FDA approval to market its sterile penicillin-based antibiotics in the US in 2013. “The key point for Reig Jofre is to innovate new projects that can be manufactured and marketed by ourselves in those markets where we have direct presence, or through our network of more than 180 partners, licensees and distributors in more than 52 countries worldwide,” Biosca states. “Instead of growing through business units in every country, we have been growing through a network of partners to whom we offer every new product that Reig Jofre develops. In that sense, we are slightly more focused on the development side of R&D+i. We try to develop both real innovation, but also products that are not necessarily a new chemical entity but rather some developments or improved formulations or new indications for existing molecules that can be successfully marketed in each local market.”
For Rovi, “While the pharmaceutical business is fairly stable and regulated, the crisis has forced managers like myself to change our ways of thinking, to restructure our companies to allow for a faster decision-making process and to be more ambitious in R&D programs. Nevertheless, I am very optimistic regarding Rovi – we have prepared ourselves for the future, and the best is yet to come. We have increased our staff from 500 in 2007 to almost 1000 in 2014.
“This country enjoyed good market growth before the crisis,” explains Eduardo Sanchiz, CEO of Spain’s flagship pharmaceutical company Almirall, “but is still behind other markets” when it comes to creating an environment for national champions. “There needs to be some strategic support from the state towards moving in that direction. I think we need to have a much more stable and predictable healthcare environment before such a push can occur. There is a need for a higher recognition of the value of pharmaceutical companies in Spain in terms of being a magnet for attraction and development of highly educated professionals internally and in the periphery.”