European Price Cuts, Restructuring Charges, Hit France's Ipsen in 2011
This article was originally published in The Pink Sheet Daily
Ipsen's restructuring in France and the U.S, and European austerity measures, lead to a series of charges against 2011 profits, but drug sales increase 5% in the year.
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Europe’s growing reimbursement hurdles and falling prices, compounded by a currency and sovereign debt crisis, mean the region’s no longer a strategic priority for Big Pharma. But while major pharmaceutical firms have sufficient scale and reach to continue to move jobs abroad and step up their emerging markets activities if conditions don’t improve closer to home, most of the rest of industry’s smaller commercial players – including the Big Biotechs – don’t.
Bayer's chairman, Marijn Dekkers, calls for a greater appreciation of pharmaceutical inventors and brands, as the diversified Big Pharma reported group sales up 4% in 2011, and profits up 90% on lower charges.
Price cuts and austerity measures made 2011 a bleak year for European pharma. These dynamics are more severe but not new, and likely will accelerate firms’ existing geographic expansion and market access strategies.