Declining drug launches in Europe drives imperative for sustained lifecycle pricing

Only 10 new products were launched by the top 16 pharmaceuticalcompanies in Europe in 2001 (see table below), a drop for the second consecutive year, according to a new study from Cambridge Pharma Consulting, entitled European Pricing & Reimbursement Review 2001. Few achieved consistent premium pricing over direct comparator drugs. The fall-off in new product development, it says, comes at a time of increased regional cost-containment controls and growing potential for year-on-year price erosion in European Union markets, which notably challenges the industry's return-on-investment potential.

The report notes that increasing financial returns will need to come from products in the post-launch stages. "For many companies, managing pricing over time has been a neglected discipline," says Ron Baynes, who leads Cambridge's Global Pricing and Reimbursement practice, "but with fewer new products reaching the market and more restrictive regulations facing those that do, the days of focusing solely on target launch price are over. Sustaining post-launch prices is now a key."

Management imperatives are becoming more challenging, the report points out, as a result of: increased regional cost-containment controls; a greater awareness by price regulators of the sense of urgency felt by manufacturers to achieve rapid market access for new products; and the fact that pricing remains the single most effective tool driving product returns.