MSD Enters Spanish Health Care Spending Debacle

Merck Sharp & Dohme Espana, a unit of the US company Merck & Co, has publicly entered the debate on Spanish health care spending, which was fired again recently when the new Spanish government indicated that it wants to tighten pharmaceutical spending (Marketletter June 24). Pharmaceutical expenditure in 1995 amounted to 700 billion pesetas ($5.4 billion).

Jean Marie Zacharie, chief executive of MSD Espana, wants products that demonstrate cost efficiency to be given prices equivalent to those in other European countries (Spain's drug prices are among the lowest in the European Union), to sell at reduced prices products that are no longer patent-protected, and promote products that avoid wasteful prescribing.

"At the heart of this debate is industrial capacity," he said, with particular reference to products without patents. "We have to get the best price, and we are prepared to cut the prices of these products. Don't forget that 60% of prescriptions are for generics," he pointed out. At MSD, generic products represent between 30% and 40% of its turnover. In 1995, MSD's net sales in Spain amounted to 34 billion pesetas.