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www.fdanews.com/articles/84326-european-governments-to-provide-greater-incentives-for-innovative-medicines

EUROPEAN GOVERNMENTS TO PROVIDE GREATER INCENTIVES FOR INNOVATIVE MEDICINES

February 6, 2006

Growth in the European pharmaceutical market is at a 10-year-low with sales in the top five markets -- Germany, France, UK, Italy and Spain -- increasing by just 3% in the 12 months to November 2005, according to IMS Health. This trend is likely to continue in the short term as governments in the region increasingly focus on cost containment in the healthcare sector.

Drugmakers have warned that government austerities could negatively impact R&D investment. This is because discriminatory short-term price cuts often do not take into account whether a drug is old or has been recently developed. Some countries are beginning to realise the problems associated with such an approach, and while continuing to squeeze prices, are making an exception for innovative medicines.

For example, in Spain, drugs that have been on the market for over 10 years that do not have a generic equivalent are to have their prices lowered by 20%, and similar polices are being adopted in other European Union (EU) markets. Meanwhile, the EU's Commissioner for Enterprise and Industry is seeking to aid advancement by setting up a new pharmaceutical forum to support innovation and to speed up the time it takes for drugs to get onto the market.