Spanish pharma association voices concern over government policies

Investment in r&d by the pharmaceutical industry in Spain grew by only 5.5% in 2005 following price-cutting legislation introduced in March and increasing governmental controls on prescription spending by the national health service according to Farmaindustria, the National Association of the Pharmaceutical Industry in Spain.

Even though last year's rise to Euro 706m from €669m in 2004 represented more than a 100% increase on the 2000 figure of €335m, Farmaindustria is concerned because this figure misses the industry target by €40m while the increase in average annual r&d budget over the previous five years stands at 19%.

Spain as a whole should also be concerned according to Farmaindustria, because pharmaceutical companies provide 20% of all of private industry's r&d investment in the country. Indeed, Humberto Arnes, director general, has called for the pharmaceutical industry to be "better supported and recognised" by Jose Luis Rodriguez Zapatero's socialist government. Since it came into power in March 2004 there have been cuts in the reference prices of 4,500 drugs (by 4.5% in March 2005 and 2% in March this year) as well as "relentless policies promoting generics and containing pharmaceutical spending by the national health service", all of which have led to lower increases in sales than was foreseen by the industry, leaving them less funds for research.

"In order for r&d and innovation to reach 3% of GNP, as fixed by the (EU's) Lisbon Summit in 2000, a framework of action [is needed] that leads to attracting r&d investment and dissipating whatever doubts exist over Spain's commitment to innovation," he added.

According to a Farmaindustria commissioned report on the impact of government polices on the industry, a €140m r&d shortfall can be expected in 2006 and by 2010 over €1.5bn in investments can expected to have been lost.

Consequently NERA (National Economic Research Associates), who put the report together, is forecasting static r&d investment in the country of less than €800m per year between 2006 and 2010, instead of the rise to over €1.4bn, which the industry claims is necessary in order to remain competitive.

"Average investment in the EU is 1.92% [of GNP]. In the Spanish case [this] has fallen to around 1%," said Oscar Arnedillo, director of NERA''s Madrid office.

Furthermore, according to Arnes: "The average price of medicines is rising by just 1%, about 4% less than our economy is growing [and 3% less than inflation]. We have the cheapest medicines in Europe."

A survey of 60 Farmaindustria members, who together manufacture 90% of prescription medicines in Spain, in February and March this year revealed that of 2005's r&d spend, €300m was spent on clinical trials; €150m went on "basic research"; preclinical research amounted to €78m; economic and epidemiological research €53m; medical research €52m; post-authorisation studies of drugs €24m; technological development €22m and "miscellaneous other areas" €26m.