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European Pharmaceutical Contractor

EU Enlargement: Strategies for Pharma's Success

With the European Union almost doubling its member size to 25 on 1st May 2004, there remains much industry speculation regarding how much of a driver for drug sales this will be. The greatest area of uncertainty is pricing and the inevitable complexity of European reimbursement policies, especially in the light of government encouraged cost-containment of health care expenditure. The pharmaceutical industry is under pressure to ensure drug prices remain buoyant and, most importantly, persuade emergent health care payers in post-accession Europe to utilise their drugs.

The accession of 10 new members - the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Malta and Cyprus - to the EU in May marks largely uncharted waters for the European-focused pharmaceutical industry (pharma). This is primarily due to the deficiencies/ diversities of current diagnostic and treatment options in the newer member states. Notably, the expansion of the market to include over 450 million people increases the promise of ever-expanding revenue streams, but equally raises the question of whether newer member states have the health care infrastructure to afford innovative drugs.

More importantly, doubts remain over the issue of pan-European pricing being affected by the health care systems of accession countries - could branded pharmaceuticals stand up to the threat of cheaper alternatives stemming from parallel trade or generics? Consequently, within the context of price-regulated Europe, the question remains as to how pharmaceutical companies could ensure that pricing and reimbursement policies after 1st May 2004 do not diminish a product's launch success in the enlarged EU.


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By Dr Linda McNamara, Managing Analyst for
Strategic Analysis at Datamonitor Healthcare

Dr Linda McNamara is a Managing Analyst within the strategic analysis team at Datamonitor Healthcare. She has authored in-depth analysis on strategic issues affecting the pharmaceutical industry, as featured in Wall Street Journal and European BioPharmaceutical Review. Linda is also a member of the Swiss Pharma Licensing Group. Her career at Datamonitor Healthcare began when she managed their clinical and commercial current affairs analysis. Prior to joining Datamonitor, she managed a neurosurgical regional intensive unit in a major London teaching hospital for four years. Linda holds a PhD in Chemistry from University College, London.

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Dr Linda McNamara
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