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Italy Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Dec 2011, Pages: 77
Business Monitor International's Italy Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Italy's pharmaceuticals and healthcare industry.
BMI View:
Under pressure from jittery financial markets, a new Italian government led by Prime Minister Mario Monti was sworn in on November 16 2011, just four days after the resignation of Silvio Berlusconi. The austerity measures expected in the coming months include the likely reintroduction of the council tax (ICI) on first homes, deep pension reform, a progressive shift in the tax burden away from workers' and corporations' income and towards consumption and wealth, liberalisation of closed professions, privatisations of public utility companies, sale of government-owned real estate and major cuts in politicians' benefits. BMI believes the pharmaceuticals and healthcare sector will be a target of further cost containment – particularly as National Health System (SSN) data for H111, which shows a decline in spending, highlights the success of previous cost-containment efforts.
Headline Expenditure Projections:
-Pharmaceuticals: EUR19.48bn (US$25.80bn) in 2010 to EUR18.99bn (US$27.16bn) in 2011; -2.5% in local currency terms (+5.3% in US dollar terms).
- Healthcare: EUR148.86bn (US$197.17bn) in 2010 to EUR151.76bn (US$217.02bn) in 2011; +1.9% growth in local currency terms (+10.1% in US dollar terms).
- Medical devices: EUR5.96bn (US$7.89bn) in 2010 to EUR6.11bn (US$8.74bn) in 2011; +2.6% growth in local currency terms (+10.8% in US dollar terms).
Business Environment Rating:
In our Pharmaceuticals and Healthcare Business Environment Ratings (BERs) for Q112, Italy ranks eighth out of the 10 markets surveyed in Western Europe. Despite being a large market, Italy is characterised by low levels of annual growth, largely because of widespread price cuts. Additionally, the Italian economy is one of the most vulnerable economies in an already shaky eurozone. High levels of public debt, poor infrastructure and a lack of competitiveness indicate that the country will remain one of the region's laggards over the forecast period.
Key Trends And Developments:
- In September 2011, the European Commission confronted Italy over a marketing authorisation rule for generic drugs in Article 68.1(2) of the Code of Industrial Property. According to the rule, the process for receiving marketing authorisation for a generic drug may begin one year prior to the expiry of the additional patent protection associated with the active pharmaceutical raw material. However, the Court of Milan derived an interpretation of the law with regards to Italian provisions and said the filing of a marketing authorisation application for a drug does not represent a violation if production and sale, as well as any commercial activity regarding the drug, have not been performed in reality.
- In October 2011, Indian drugmaker Ranbaxy Laboratories and Japanese pharmaceutical company Daiichi Sankyo's subsidiaries Ranbaxy Italia and Daiichi Sankyo Italia ormed a partnership to commercialise Daiichi drugs in Italy. Ranbaxy's distribution strengths and extensive relationships with pharmacists across Italy will be leveraged for the distribution of Daiichi Sankyo products. Ranbaxy will start with the exclusive distribution of two Daiichi Sankyo's brands, Congescor and Lopresor, to all pharmacies in Italy. Both drugs are used to treat patients with congestive heart failure and hypertension.
BMI Economic View:
The Italian economy has long underperformed its eurozone peers and is continuing to put in a poor performance during the recovery. The economy is in desperate need of growth momentum more as concern over the sustainability of the national debt have come to the fore. A failure to restore competitiveness through market reforms and deliver a credible proposal to pay down the public debt will consign Italy to a permanent low growth trajectory and risks a sovereign debt crisis.
BMI Political View:
The new technocratic government led by Mario Monti will attempt to restructure the economy and consolidate the country's public finances. Although the determination of the prime minister, affirmed by the choice of high-profile figures as ministers, is without doubt, political parties could hamper Monti's agenda, especially as local elections and referendums approach.
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