German drug sales set to decline, VFA warns

The German pharmaceutical sector is expected to see an accelerated decline in drug sales in its domestic market this year, according to the German Association of Research-based Pharmaceutical Companies (VFA). The group had already forecast a downturn in drug sales based on trends in the wider economy. Sales stagnated between July 2006 and June this year at 25.8 billion euros ($35.13 billion) and some drug industry observers expect further cuts in the workforce.

Following the acquisition of Schering by Bayer, only two German majors - Bayer and Merck KGaA - are listed on the stock market together with a number of biotechnology companies and generic drugmakers. Bayer nonetheless managed to keep its head well above water in the first half with first-half 2007 sales up 22% and earnings per share rising from 1.41 euros to 4.27 euros. Its share price went up from 42 euros to a five-year-high of 57.20 euros, outperforming its competitors. Like Merck and Stada, Bayer has benefited from sales outside Germany and improving foreign business is the basis for the company