spanish Pharma Industry Faces Productivity Struggles, Future Uncertain
MADRID — May 9, 2024 — The Spanish pharmaceutical industry is under scrutiny following an event examining its economic and structural challenges. Organized by DiarioFarma, the event highlighted the stagnating productivity of the pharmaceutical industry in Spain despite considerable investment, the sector’s reliance on salary containment, and the impacts of generic medicines. Experts emphasized the need for strategic shifts, including innovation and investment in R&D, while European and US policy hangs in the balance. For a deeper dive, read on.
here’s a breakdown of the key points from the provided text,focusing on the pharmaceutical industry in Spain and europe:
Key Takeaways:
Event Focus: The article reports on an event organized by DiarioFarma,supported by pharmaceutical companies Lilly,MSD,Novartis,and Pfizer,focusing on the economic,industrial,and structural aspects of the pharmaceutical industry,especially in Spain.
Spain’s Productivity Problem: A central theme is that the spanish pharmaceutical industry,despite significant investment,suffers from stagnant productivity. It’s not effectively transforming investment into productivity compared to other european countries.
Salary Compression: Spain’s competitiveness in the pharmaceutical sector relies heavily on salary containment rather than productivity gains. The salary differential compared to the industrial average has significantly decreased. Impact of Generic Medicines: The growth of generic medicines has had a mixed impact.While it has contained public spending and generated a trade surplus, it has also discouraged investment in intangible assets like patents, brands, and organizational innovation.
Shift in Investment: Since 2000, there was an increase in investment in immaterial assets, but this trend stopped after the expansion of generic medicines and the 2008 crisis. Since then, investment has been redirected towards material assets, such as production or machinery plants, which has limited productivity growth.
Financial Health: Despite the productivity issues,the financial situation of pharmaceutical companies in Spain is generally solid,with low debt and good self-financing capacity. Though, profitability remains low compared to other European countries.
Recommendations for Spain:
Boost productivity to align with other European countries.
Grow and differentiate through brand investment and vertical differentiation.
Expand R&D investment beyond clinical scope to include business model, promotion, organization, expansion, and knowledge management.
European Model at Risk: the experts agreed that the risk of not consolidating an innovative and competitive pharmaceutical industry is not only economic, but also strategic, health and social.
Translation Research Motor: The National Health System (SNS) plays a strategic role as a Translation Research Motor.
Challenges:
Talent attraction and retention.
Generational relay in science.
Integration between care innovation and industrial innovation.
Deterioration of the European position: Europe has seen its weight in investment in R&D, in clinical and manufacturing trials, while other regions such as the United States and China have taken the lead.
Threats from US Policy: Potential trade barriers and tariffs from the US could significantly impact the European pharmaceutical industry, possibly leading to relocation of production and R&D to the US.
* Impact of US Policy: A scenario of this type would put about 85% of the investment in capital expenses and around 50% of the investment in R&D.
In essence, the article highlights the need for the Spanish pharmaceutical industry to focus on improving productivity through innovation, brand advancement, and strategic investment in intangible assets, while also addressing the broader challenges facing the European pharmaceutical industry in a globalized and potentially protectionist habitat.