What challenges lie ahead for European pharmaceuticals?
There are numerous challenges facing European pharmaceutical companies heading into 2014.
The continent has a proud history of drug development and is still viewed as one of the most important pharmaceutical markets in the world. Researchers have made some exciting and potentially revolutionary clinical discoveries in recent years, but red tape and a lack of finance could hinder further progress.
Research and development cuts?
Scientists continue to make significant breakthroughs that could lead to new advanced treatments. Research and development (R&D) is very expensive and time consuming, so only a handful of these studies are likely to result in new drugs being made.
In a recent interview with the Financial Times, Severin Schwan - Chief Executive at Swiss healthcare company Roche - warned that European governments risk undoing all of the good work done by pharmaceutical firms.
A number of countries in the EU have adopted strict austerity measures in order to service growing financial deficits. This, Mr Schwan believes, is having a negative impact on drug development. Governments have not only cut the price they are willing to pay for new drugs, they have also reduced R&D funding and Mr Schwan feels this demonstrates a lack of long-term planning.
"The danger with the euro crisis is that politicians become so short-term focused and so one-dimensional," he told the news provider.
"Europe will only be successful in the long term by being cutting edge in innovation. That is what the real resource of Europe is. We have to nurture that, and I am afraid that not everyone has recognised that."
According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), the cost of researching and developing a new chemical or biological remedy in 2012 was €1.17 billion, which is further evidence of the barriers medicine companies are facing.
Are new laws set to take effect?
Pharmaceutical companies have always encountered red tape when attempting to bring new products to market. The European Medicines Agency (EMA) has drafted new laws that govern the publication and use of clinical trial data, which are likely to have a major impact on scientists and researchers.
It wants researchers to be more open with the data they generate, but its latest proposals have drawn criticism from the EFPIA. Speaking in September 2013, EFPIA Director General Richard Bergstrom explained why the regulations do not work in their current format.
"We are worried by a move towards greater transparency of clinical trials data that appears to be putting transparency - at whatever cost - ahead of public health interests," he commented.
"While EFPIA values other voices and opinion in the conversation surrounding clinical trials data, we believe there are better alternatives than what the EMA is presenting."
Reasons to be optimistic
Pharmaceutical professionals have plenty of challenges to overcome in the coming years, but there are reasons to feel optimistic about the future. A new study conducted by Fast Market Research showed the "over-the-counter (OTC) pharmaceuticals market" has performed well despite some tough trading conditions.
OTC revenues increased at a compound annual growth rate of 2.9 per cent between 2008 and 2012, which was impressive given the economic turmoil in the EU during this period. The report also predicted the market will continue to expand by three per cent each year until 2017, with cough and cold medicines being the driving force behind this increase.
There is also potential for some high-profile takeovers within Europe's pharmaceutical industry. Reuters reported at the start of October 2013 that shares in Swiss generic drugmaker Acino Holding rose by 32 per cent following a takeover offer from Pharma Strategy Partners GmbH, a unit of Avista Capital Partners and Nordic Capital.
This suggests that pharmaceutical businesses are looking to expand and this could lead to greater investment in medical R&D in the near future.
With the European economy finally showing signs of growth, there is a chance that pharmaceutical companies will be in a position to commit more funds to R&D. The aforementioned attempted takeover of Acino Holding seems to indicate that confidence levels are rising throughout the industry.
It is unlikely that firms will receive as much support as they would like from government bodies while deficit-cutting plans are still in progress and legal reforms could complicate matters further. However, there have been enough positive signs to suggest Europe will continue to be a major player in the global pharmaceutical industry.