Keywords: Spain, Pharmaceutical market, Farmaindustria, Reference pricing,

Spanish pharmaceutical market evolution

Article | 24 November 2009

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Data from the Spanish Ministry of Health and Consumer Affairs pertaining to the month of August of 2009 shows that growth in public pharmaceutical expenditure in Spain has reached 4.78%. This annual growth of expenditure is due to a 4.68% increase in the number of prescriptions, and a 0.09% on the average expenditure per prescription, reports the country’s trade body Farmaindustria.

The growth of the public pharmaceutical expenditure is still on its moderation path and, for the second consecutive month, remains below an annual 5%. After a brief fall experienced in July, the number of prescriptions regained growth rates which are closer to 5%, rather than an annual 4%. However, the average price per prescription has accumulated falls, and in August reached the greatest decline in five years (-1.6%). When comparing the current annual growth rates of the public pharmaceutical market in Spain in August with the figures of last year, we can clearly see that both the consumption of prescriptions as well as the average cost per prescription have grown more moderately now than a year ago, notes Farmaindustria.

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Thus, the inter-annual growth rate of the number of prescriptions is currently almost a percentage point below its value of last year, and the rate of the average price per prescription is 0.6 percentage points less, which makes the growth rate of the public pharmaceutical expenditure in August 2009, 1.5 percentage points below the rate registered in August 2008.

RPS drugs now 34.4% by volume and 19.4% by value

Finally, considering IMS data over the last 12-month period which ended in June 2009, the market of all medicines subject to the Reference Price System reached 34.4% of the total prescription market in units and 19.4% in values.

As mentioned in the paragraph above, the market share of medicines included in the Spanish Reference Price System is now 19.4% of the total prescription market in value and 34.4% as far as units sold. That is to say, one out of three POM medicines dispensed in Spain is one which is subject to the RPS or, considering values, one out of five euros spent in the acquisition of medicines in Spain pertains to those subject to the RPS.

The market share of medicines subject to the RPS serves as a good indicator of pharmaceutical savings as it corresponds to the consumption of medicines whose patent has expired and whose prices have been reduced ostensibly (in some cases, 80% below the price of the original medicine when it was still protected by a patent). In turn, in each of the RPS groups, generic and branded medicines co-exist with practically equivalent prices, this being the reason why the level of saving cannot be measured analyzing the market share of generic medicines in the total of the Spanish market, but the share of the whole of medicines subject to the RPS, whether generics or not, since all of them are priced similarly and thus generate very similar savings.

From this perspective, it is interesting to analyze the distribution of the market shares of medicines subject to the RPS amongst different Spanish regions in order to check whether there are differences between them, or whether there is an homogenous territorial distribution, says the Farmaindustria.

It is necessary to underline that data shown below might not be absolutely accurate, since the IMS database used contains a number of direct sales (around 7% of the total market in reference prices) which is not split regionally. With the aim of minimizing the number of cases and obtaining the most neutral results, the distribution criteria has taken into account the different Region’s contribution to the whole of the prescription market and the market subject to RPS, and, says the Farmaindustria, “this is the reason why we think results, though not exact, might not be very different from reality.”

Pharma an adder of value to Spain’s industry

According to the latest information available (2007), the pharmaceutical industry continues holding the top position in many high technology indicators, such as they are defined by the National Institute of Statistics.

In view of the results, notes the Farmaindustria, “the pharmaceutical industry will continue being a critical branch of activity in the group of Spanish industrial sectors of high technology. With almost 50% of the total added value generated by these sectors and with almost 40% of employees and personnel working in R&D activities, the pharmaceutical industry is like a role model sector facing the challenge of change of productivity that our country requires. In fact, if we compare figures of 2007 with those of last year, one can clearly see that the pharmaceutical industry’s contributions to the total groups of high technology in the sector increased in practically all indicators, this shows the strong level of dynamics of this business sector in Spain.”