Italy's pharmaceutical industry is set to decline by 2020 owing to its struggling economy, according to a new report published by GlobalData. Registering a negative compound annual growth rate of 3.3%, the $21.3bn sector is forecast to shrink to $18.6bn.
The report, titled 'CountryFocus: Healthcare, Regulatory and Reimbursement Landscape - Italy', lists the factors that will negatively influence the country's pharmaceutical industry and encourage the sale of generics and over-the-counter drugs.
The stringent pricing policy adopted through negotiations and external and internal reference pricing restricts the introduction of innovative molecules into the market.
Discussing the fledgling industry, Adam Dion, MSc, GlobalData's Senior Industry Analyst opines that the next few years will be tough for the Italian pharmaceutical industry.
He says, "An increase in the Italian government's debt relative to GDP, and the country's poor growth record will decrease cash flow in the country, meaning the industry will stagnate."
The Italian economy is also susceptible to the existing crisis in the Eurozone, which is expected to affect the demand for the country's goods and services. The report predicts that these macro economic factors will hamper growth and investment in the already struggling sector, and the booming generics market in countries such as India and China is also perceived as a threat to Italy's domestic pharmaceutical sector.
Dion concludes: "Despite the tough economic environment faced by those operating within the Italian pharmaceutical industry, GlobalData believes there will be a number of opportunities to counteract declining sales, including efficient patent policies, E-Health programmes, and government reforms to reduce public debt.
"Indeed, more companies will be interested in research and development after the Italian Patent and Trademark Office has created efficient patent policies to protect them."