The Wall Street Journal (Pain for Europe’s Smaller Drug Firms) notes that Spain, Greece, and Italy are putting the squeeze on drugmakers as part of national austerity programs designed to ease the debt crisis. Companies like Almirall and Alapis that depend heavily on those markets are suffering mightily as national health systems cut reimbursements. There’s less appetite for cuts to hospitals and physicians, and none for taking away coverage.
The US fiscal situation isn’t as pressing as Southern Europe’s. Still if present trends continue, we’ll get there. In fact, uncontrolled health care spending –mainly Medicare– is the culprit. So what can we expect in a 10 year time frame, assuming the US’s finances aren’t straightened out by then?
- Hospitals and physicians are likely to get hit harder in the US than Europe. That’s partly because physicians get paid more here than Europe and also because Medicare sets rates and pays providers directly
- Pharmaceutical companies won’t escape the axe, but they’re a bit less vulnerable politically in the US because they are a major source of R&D spending, are seen as innovative and a more attuned to the political system
