GlaxoSmithKline is losing almost £3 billion in annual sales to cheaper generic drug-manufacturing rivals, the pharmaceutical giant said as it reported a 14% slide in third-quarter profits.
Although the results were better than markets had been expecting, the group still posted underlying pre-tax profits of £1.88 billion for the three months to the end of September.
GSK said cheaper competition was having a significant impact on pharmaceutical sales, which were down 4% in the quarter to £4.89 billion.
Sales of its under-fire Avandia diabetes treatment – which has been rocked by allegations that the drug increases the risk of heart attack – continued to suffer as they fell by another 23% and GSK said the outlook “remained negative”.
However, the weaker pound helped boost total sales, ahead by 7% to £5.88 billion. So far, the group is seeing only modest effects of the economic slowdown on consumer product sales, it said.
But Andrew Witty, GSK’s recently appointed boss, said the group needed to “monitor closely the impact that changes in the global economy will have”, cautioning that countries may start to review healthcare spending.
Copyright PA Business 2008