Pharma: a tale of rising demand and squeezed pricesDownload the Document
Spending on prescription drugs is on an upward trajectory worldwide, and especially in Western Europe and the US. Pharma group profits rose by 2.9% in 2017. Reasons include ageing populations, changing lifestyles and pressure to access innovative treatments, and the rise comes despite the efforts of governments to control healthcare spending. The US situation is particularly uncertain, with the Trump administration’s attempts to repeal ‘Obamacare’ meeting difficulties.
Strengths and weaknesses
Coface analysts predict research and development by pharmaceutical companies to pick up in 2018, and for prescription sales to grow – by 4% France, UK, Germany, Italy and Spain for example. This is driven by the rise in specialist drugs, which now amount to over a third of the total. Everywhere pharmaceutical companies are under pressure to provide discounts and lower prices by governments facing increasing demand. In the US alone, health insurance costs are likely to rise by as much as 18% in 2018.