US healthcare reform squeezes AstraZeneca

28th Apr 2011 07:19

US healthcare reform measures and competition resulting from the expiry of exclusive rights over its drugs hurt revenues at drug giant AstraZeneca in the first quarter.Pre-tax profits fell to $3.565bn from $3.857bn in the first quarter of 2010, on revenues that were down to $8.292bn from $8.576bn. "Our first quarter revenue performance reflects the anticipated generic competition in the US and Western Europe, which we partially mitigated by our continued double digit growth in Emerging Markets," said chief executive David Brennan. "We remain focused on driving operating performance in order to invest in the development of innovative new products while providing attractive cash returns to shareholders."Revenue was down by 11% in the US, including sales erosion of more than $400m due to generic competition and the pricing impact of US healthcare reform measures. Similarly, generic competition contributed to a 7% sales decline in Western Europe, but emerging markets sales saw a 13% uplift.Astra's comments today echo those made by rival GlaxoSmithKline, which yesterday also reported the pricing impact of US healthcare reforms, but said that emerging markets are driving growth. Astra has also lifted its full-year core earnings target range for 2011 by five cents to $6.95 to $7.25 a share to reflect a patent settlement. It continues to envisage that revenue growth will be flat to a low single-digit decline for the full year.