The pharmaceutical industry generates more than 27 billion euros of added value in Spain, almost 2% of the country’s GDP.
For the first time, a study by the consultancy firm Afi has evaluated the impact of pharmaceutical companies from a dual perspective: the socio-economic value provided by medicines and that generated by the research and manufacture of these products in Spain.
According to the report, this sector contributes to three of the main challenges facing Spain: improving the health of the population, guaranteeing the sustainability of public finances and strengthening the competitiveness of the economy and boosting its growth. The sector is also a leader in diversity and quality of employment and environmental management.
‘This analysis shows that the pharmaceutical industry is essential for the health of the population, but also a strategic pillar for the economy of our country,’ says the president of Farmaindustria, Fina Lladós Canela.
“Fina Lladós (presidenta de Farmaindustria), Juan Yermo (director general de Farmaindustria) y Diego Vizcaíno (socio director de Economía Aplicada de Afi), en la presentación del informe.”
Farmaindustria.es
The pharmaceutical industry contributes to three of the main challenges facing Spain: improving the health of the population, guaranteeing the sustainability of public finances and strengthening the competitiveness and growth of the economy. This is shown in the report The socioeconomic contribution of medicines and the pharmaceutical industry in Spain, carried out by the consultancy firm Afi (Analistas Financieros Internacionales), which for the first time has evaluated the impact of pharmaceutical companies in Spain from a dual approach: the socioeconomic value provided by medicines and that generated by the research and manufacture of these products in Spain.
The main conclusion of the report, which was presented this Wednesday in Madrid, ‘is the consideration of medicines not as an item of public expenditure, but as an investment strategy, which in the short term aims to strengthen the health of the population, but which in the medium and long term contributes to the sustainability of the welfare state’, as Diego Vizcaíno, managing partner of Afi’s Applied Economics Area, pointed out. In fact, the Afi study concludes that the nearly 22,000 million euros of public investment in medicines in 2022 (both in community pharmacies and hospitals) led to savings of nearly 14,200 million euros in other budget items.
In the section on the contribution of the pharmaceutical industry to the Spanish economy, the report estimates that the pharmaceutical sector contributed to generating more than 27.2 billion euros of added value in 2023, both directly, indirectly and induced, equivalent to 1.9% of national GDP. These new data highlight the sector’s significant multiplier effect on other economic activities. Thus, the report highlights that each euro of added value generated in the pharmaceutical industry leads to the generation of an additional 1.5 euros by other companies and, on the other hand, that each additional euro of public investment in medicines contributes to the additional generation of almost 4 euros (3.9) of added value in the country’s economy.
The president of Farmaindustria and CEO of Amgen in Spain, Fina Lladós Canela, highlighted how these data show that the pharmaceutical industry ‘is essential for the health of the population, but also a strategic pillar for the economy of our country’. ‘This is something that not only we say, but is also recognised by the Pharmaceutical Industry Strategy, recently approved by the Government and in whose development we at Farmaindustria are collaborating’, she added.
The Afi report highlights that this generation of value in the sector is supported by the work of thousands of people employed in drug manufacturing companies in Spain. Thus, in 2023, the sector employed more than 60,600 people (affiliated to Social Security). But in addition to its direct impact, the pharmaceutical industry contributed to the maintenance of 107,300 jobs indirectly and 79,600 indirectly. Thus, it is estimated that the pharmaceutical industry contributed to the generation and maintenance of more than 242,000 jobs in Spain, equivalent to 1.2% of the total number of people employed in the labour market. Once again, the data point to the existence of a significant multiplier effect on employment: each job in a pharmaceutical company leads to the creation of 3.4 jobs in other sectors of the economy.
The report points out that, overall, Spain is the fourth EU country with the most industrial employment, but a deeper analysis at regional level reveals a greater relevance of our country within the European industrial ecosystem. The data show that Catalonia is the second European region with the most workers in the pharmaceutical industry, with figures similar to those of Italy’s Lombardy (the leading region). In addition, the Community of Madrid is the eighth European region with the most jobs in the pharmaceutical sector, which means that Spain manages to place two regions in the top ten, something that only happens in Germany (Darmstadt, Tubingen) and France (Rhône-Alpes, Île de France).
Farmaindustria.es
Beyond their quantitative impact on the maintenance of thousands of jobs and the generation of billions of euros in added value, pharmaceutical companies operating in Spain also contribute to the competitiveness of Spanish industry. According to the report, the latest National Accounts data show that the pharmaceutical sector is the second most productive activity in the entire manufacturing sector, behind only the oil industry. Specifically, each pharmaceutical industrial worker generates an added value of 94 euros per hour worked (equivalent to 175,000 euros per year), more than double that of the average industrial worker.
In this context, the data reflect the great relevance of the pharmaceutical industry within the Spanish production capacities of high-tech goods. Afi’s analysis highlights that up to six out of every ten euros of added value generated in Spain in high-tech goods were medicines, three times more than electronic or aerospace goods. These figures place Spain as one of the countries most dependent on the pharmaceutical sector in its high-tech industrial supply: 60% share compared to the European average of 44%.
A high compensatory effect of medicines
In the section on the socio-economic value of medicines through their health benefits, the report highlights the so-called offsetting effect of medicines. In other words, how investment in medicines has the potential to indirectly reduce spending on other budget items, thanks to the prevention, treatment and cure of a large number of diseases, improving the population’s state of health and reducing the pressure on care. For example, Afi estimates that a one euro increase in per capita public investment in medicines would increase healthy life expectancy at age 65 by 5.3 days.
The study also focuses on the savings in sick leave thanks to medicines, a very relevant aspect in our country – the study points out – where the number of sick leaves has doubled between 2014 and 2022, with an annual expenditure that already exceeds 8,300 million euros for public administration alone. The study points out that an increase of one euro in per capita public spending on medicines is associated with a reduction of 18,000 sick leaves per year in Spain.
In addition, the study highlights how medicines enable people to work longer (either by extending their working lives or by becoming less ill). Afi analysts have estimated that each euro of public investment in medicines in community pharmacies contributes to an increase of 10.75 minutes of effective working time per year.
‘All these data, which have been measured for the first time in our country, clearly show how the medicine is an investment with an enormous social and economic return,’ said the director general of Farmaindustria, Juan Yermo. ‘At a decisive moment for the sector, with the deployment of the European Pharmaceutical Strategy and the recent publication of the Draghi Report, our intention is to continue working with the Government in the development of this Pharmaceutical Industry Strategy with the common purpose of translating it into a real improvement in the health and well-being of people and the economy of our country’, he added.
