Like the old Tiresias, the infallible blind soothsayer of Thebes whose ominous predictions, however, never believed anyone. Indeed, when he divined, Hesiod does not elegantly report it, among those present it was all eyes to the sky and hand in pocket. It was foreseeable that certain economic dynamics taking place in the pharmaceutical sector would have inevitable negative repercussions. The data released yesterday on spending and consumption of NHS medicines in the first half of the year confirm the bizarre trend already seen in 2007: the market is down while consumption is up. Spending falls (-1.4%) but recipes grow (+5.9%). Firms sell more pieces but collect less. Budgets are shaky and so they are forced to cut costs. Even cutting scientific sales reps, already down by 4,000 units in a couple of years, with a further 5,000 redundancies by 2010. A corporate asset of primary importance that no company would reduce unless forced by stringent income statement requirements. It depends on the regulator, the State, which, by deciding the prices and reimbursement of medicines, in the last five years has drastically reduced the price at which it buys medicines from the manufacturers, directly and indirectly. Anomalous in its genesis, atypical in its causes, but still it is deflation, the bogeyman for every economic cycle, the mistletoe of every growth (Japan docet). The Regions are also involved, which push doctors to prescribe the cheapest drugs. That is, no longer innovative. But the old "generics", "vin tage" drugs also discovered forty years ago, when Rita Pavone sang the geghegè or in Berkeley they shouted at the B-52s over Saigon. And also of questionable quality, see the very recent FDA stop on imports into the USA of 30 Indian generics. In summary, drug policies to cut spending have led us to treat ourselves with our grandfather's drugs and the industry to lay off thousands of its graduate employees. Tiresias acquires foresight from Jupiter only after blindness. We hope that, after these years of darkness, the same will happen to the drug institutions. Businesses certainly wish it with all their heart. And maybe even with the body, like those Thebans. fabrizio.gianfrate@unife.it
Source: Free Market of 03/10/2008, article by FABRIZIO GIANFRATE p. 9
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