The new ‘Healthcare and Life Sciences Review’ on Spain, available today on PharmaBoardroom.com for free download, looks beyond the headlines of the Eurozone crisis that rocked the Spanish economy in 2009, and the austerity measures that followed, to find that the Spanish pharma community has remained pragmatic in times of trouble.
“Despite the crisis, Spain is still the fifth biggest European market, and the general conditions to invest are favorable to the pharmaceutical industry,” says Humberto Arnés, Director General of Farmaindustria, the country’s association for research-based pharmaceutical companies. Today, the headlines are telling a new story: Amgen, Celgene, GSK, Leo Pharma, Lilly, Merck, MSD, Novo Nordisk and Roche have all made recent investments in Spain, in clinical trials, research, biotech and manufacturing.
The recession in the Eurozone has helped to reshape the Spanish pharma industry. It was needed: for years, Spain’s pharmaceutical industry had been growing at a rate that would eventually become unsustainable. “Spain was living in a bubble-like dream in many ways, above what the country and its economic capabilities could deliver,” says Juan López-Belmonte, CEO of Laboratorios Rovi, a Spanish laboratory that has achieved significant growth during the economic downturn.
The breaking point was reached in May 2010, when public pharmaceutical expenditure reached an all-time high. At that point, “Spain had a similar market size to the UK and Italy with a significantly smaller population,” remarks Humberto Arnés of Farmaindustria. “It would have been impossible to maintain that situation, and an adjustment of our market was absolutely necessary. But after this adjustment that has already been made, further reductions to the pharmaceutical industry are not possible, without causing irreversible harm to patients and companies.”
The Ministry of Health, under the administration of Prime Minister Mariano Rajoy, introduced a series of austerity measures in 2011 designed to curb costs following a series of similar measures made in 2006 and 2007. Most notably, these measures included a 7.5 percent price reduction for all patented medicines financed by Spain’s National Health System (SNS), mandatory prescription by active ingredient, the de-listing of over 400 medications for minor conditions, and the introduction of a ten percent copayment for pensioners and increases of up to 60 percent for employees. As a result of these measures, pharmaceutical expenditure contracted 19 percent for the total market and a staggering 38 percent for the public market. As a country whose pharmaceutical expenditure is 80 percent public, the impact this had on the industry, as a significant contributor to Spanish GDP, was immense.
“The old Spanish healthcare system has disappeared as it had proven to be unviable and unsustainable,” – Luis Cruz, general manager of Spain and Portugal at CSL Behring
“The old Spanish healthcare system has disappeared as it had proven to be unviable and unsustainable,” says Luis Cruz, general manager of Spain and Portugal at CSL Behring. “Now we are in the process of switching to a new system that has yet to be formalized. We are trying to keep up with everything, but the process of defining this new system is not an easy one.”
This report investigates the environment in Spain today, speaking to the country’s pharma giants to uncover what the situation is on the ground today. “This country enjoyed good market growth before the crisis,” explains Eduardo Sanchiz, CEO of Spain’s flagship pharmaceutical company Almirall, but he believes it 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.”
Maria Luisa Poncela, General Secretary for Science, Technology and Innovation
Anabel Sanz, Head of Technology Transfer and Valorization of the Spanish National Cancer Research Center
Regina Revilla, President of ASEBIO
Carmen Castresana, Director of the Spanish National Center
Margarita Alfonsel, General Secretary of FENIN
Eduardo Sanchiz, CEO of Almirall
Antoni Esteve, Director of Esteve
Rogelio Ambrosi, Managing Director of Merck Spain
Erik Lommerde, Vice President Spain & Portugal of Novo Nordisk
Juan López-Belmonte, CEO of Laboratorios Rovi
Raúl Díaz-Varela, CEO of Kern Pharma