Expert warns pharmaceutical industry faces tricky times after spending review | PJ Online

Tough times lie ahead for the healthcare and pharmaceutical industry, analysts have warned following the Government’s spending review.

Tijana Ignjatovic, strategic healthcare analyst at Datamonitor, warned that the spending increase was not enough to meet the growing healthcare demands of the ageing population and rising incidence of conditions such as obesity.

“The NHS faces a funding shortfall of £42bn over a period of four years (taking the annual inflation rate at 3.0 per cent and a need to increase funding by 3 per cent to meet growing healthcare needs),” he warned.

She added that the need for the NHS to fund aspects of care previously covered by council funding and the costs of the NHS restructure — which could be as high as £3bn — could lead to an overall deficit in excess of £49bn.  

Dr Ignjatovic warned that the squeeze on health budgets will impact on the pharmaceutical industry but the real uncertainty will come from the NHS restructure:

“In particular, the transfer of the commissioning power from the primary care trusts to GP commissioning consortia, in addition to the lack of clarity as to the future role of the National Institute for Health and Clinical Excellence, may have a significant impact on pharma sales and marketing practices as well as negotiations regarding reimbursement of the existing and new medicines,” she said.

She also warned that the pharmaceutical industry was bracing itself for the impact of value-based pricing at the end of 2013.

Equally, John Appleby, chief economist at The King’s Fund, agreed that the increase in the NHS budget would be swallowed up by cost pressures, such as incremental pay drift and the increase in VAT.  However, Nigel Edwards, acting chief executive of the NHS Confederation said: “Given the huge financial pressure on our public services, this settlement is as good as the NHS could have hoped for under the circumstances.”

via pjonline.com

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