After we wondered if the Greek crisis would spread from drug companies to translation suppliers two years ago, things had gotten quiet and for a while, the situation seemed resolved. But with austerity being trumpeted as the solution to all financial ills, dark clouds are once again forming on the horizon - for drug companies and, potentially, for medical translation providers.
Austerity is leading to cuts in health care spending, which hits patients (see here for an example) and manufacturers alike.
Pharma companies, for instance, are owed billions by recession-hit nations. According to Farmaindustria, the Spanish Pharmaceutical Industry Association, the Spanish health system is owes more than €6 billion to pharma companies. And in 2011, drug giant Roche has stopped delivering some drugs to select state-funded hospitals in Greece that haven't paid their bills.
Equally disconcerting is the fact that austerity means that many European governments are not willing to pay as much for medical devices and pills. In Austerity in Europe Puts Pressure on Drug Prices, the New York Times recently wrote that "new laws in some countries are also putting pressure on companies to prove their drugs are effective or risk having them dropped from the coverage list, or covered at a lower rate".
Lower prices lead to shrinking profits, reduced R&D spending on new devices/drugs, and price pressures on the entire supply chain - including medical translation providers.
In our business, we have been seeing the impact of this over the past couple of years. More and more clients are consolidating medical translation suppliers and are conducting RFPs. And while quality still rules, price is being a much more important consideration.
Translation is certainly not the only profession that's impacted by this. But many translation providers are not used to the rough-and-tumble world of corporate procurement, and these suppliers find that it's getting harder and harder to maintain (let alone grow!) relationships with medical device and biopharma clients.
And while dark clouds can dissipate quickly, they can also turn into destructive storms. Talking about the NY Times piece on austerity's impact on drug prices, streettalklive warned:
"The European recession is just getting started ... We are potentially one to two quarters away from seeing a significant shock to the U.S. GDP data"Yikes! Let's hope that they're reading the clouds wrong and that the economic barometer in Europe and elsewhere will be rising again soon!
[Thanks a lot, Megan, for the tip!]
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