Tuesday, January 27, 2009

Obama battles big pharma

Pfizer's latest mega deal reflects the threats faced by global drugs firms, not least from the new US president, says Alistair Dawber

"We will lower drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programmes and taking on drug companies that block cheaper generic medicines from the market." The wording of President Obama's healthcare policy could not be clearer and should send a shiver through the boardroom of every major pharmaceutical group in the world.

For some time, the big players in the drugs market have faced a simple problem. Treatments that the likes of Pfizer, Novartis and GlaxoSmithKline (GSK) have spent years and millions of dollars developing are increasingly coming under threat from the generics companies, which invest nearly as much energy in challenging patents and developing cheaper alternatives. The established groups may consider the generics firms parasitical, but the likes of Barack Obama and the European Commission are tiring of the big beasts hiding behind patents ensuring that healthcare is more expensive to the ultimate user.

The European Commission said in November that the pharmaceutical groups are blocking the entry of new, cheaper drugs on to the market and that this cost EU healthcare providers, including the National Health Service, an estimated €3bn between 2000 and 2007. It added that it "will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached."


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