Farmaindustria Seeks Increased R&D Investment, Integrated Spanish Market

Farmaindustria Keen on Integrated Spanish Market

Spain's association of innovative pharmaceutical manufacturers, Farmaindustria, keen to see the emergence of an increasingly integrated pharmaceutical market in Spain, instead of 17 smaller fragmented markets, reports Spain's Europa Press agency. Talking at a recent forum on the future of Spain's pharmaceutical sector, Farmaindustria president Humberto Arnés said that the model of 17 independent communities, which came into effect in 2001, was inappropriate and that change was needed. At present, drug reimbursement decisions are taken on a regional rather than national level, with regions implementing their own policies directed towards prescribers and medical representatives. This, in turn, imposes difficulties to pharmaceutical companies that need to negotiate drug prices on different levels and adapt to different regional policies. Upon discussing the pharmaceutical sector in Spain, Arnés emphasised the sector's need to double investment into R&D, which in 2007 amounted to 793 million euro (US$1.2 billion)—equivalent to 6.6% of the sector's domestic sales.

The figure implies the "fragility" of the sector, according to Arnés, with no individual pharmaceutical company having a market share greater than 10%. Part of the problem is low drug prices, compared with the European Union (EU)-25 and investments into R&D are related to drug prices, in particular when companies' net profit is reduced. As part of the continuing cost-containment efforts on the part of the Spanish government, the average prescription price posted a record low in 2007 (see Spain: 6 February 2008: Average Spanish Prescription Price Shows Record Low with 0.7% Drop in 2007).

Farmaindustria is proposing an "integral plan" involving the aforementioned objectives; it is likely to take on board all parties concerned, including the local and central governments and the pharmaceutical sector (see Spain: 19 November 2007: Farmaindustria Proposes Pharmaceutical Integral Plan to Spanish Government).

Implications and Outlook

With this announcement, Farmaindustria reiterates its "integral plan" to improve operating conditions for Spain's innovative pharmaceutical sector. Currently, the relatively weak patent protection system—which before 1992 protected the process, not the end product—allows earlier generic competition to patented drugs compared with elsewhere in the EU. Around 15 drugs are reported to be affected by ineffective patent mechanisms.

So far, its lobbying efforts have materialised, with a recent hint from the Spanish Ministry of Health that the patent law in Spain would change to benefit the innovative sector and harmonise intellectual property legislation with the rest of the EU (see Spain: 5 March 2008: Spanish Health Minister Announces Change to Patent Law). The innovative pharmaceutical industry in Spain was hit hard by continuing drug price cuts and healthcare policy, which has favoured the use of cheaper generic drugs (see Spain: 11 February 2008: Mixed Fortunes for Big Pharma as Spanish Generic Market Tops 8.5% Y/Y Growth in 2007).

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