Pharmaceutical Sales Affected By European Austerity Cuts

Europe’s financial crisis is leading Johnson & Johnson, Sanofi-Aventis and and Merck & Co to lower forecasts and reduce spending, adding pressure on drug makers already squeezed by generic competition.

Germany, Greece and Spain have cut or plan to reduce their health spending after European Union policy makers agreed to an almost $1 trillion rescue fund in May to prevent the fiscal collapse in Greece from spreading. Germany implemented a price freeze on drugs through 2013, while Spain introduced a 7.5 percent rebate on most branded products. Greece ordered drug makers in May to cut prices by as much as 27 percent.

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