Schering blames poor drug sales on cost cutbacks

Schering, the German pharmaceuticals group, yesterday blamed rationing by cash-strapped local health authorities in Britain for disappointing sales of its much-vaunted multiple sclerosis drug, Betaferon, which became available on the National Health Service earlier this year.

In a statement to accompany its interims results, Schering said UK sales of the drug, which costs pounds 10,000 a year per patient, were "considerably below the planned level as regional questions regarding reimbursement have not yet been completely clarified".

MS sufferers have accused the Government of attempting to ration the drug after the Department of Health said GPs should refer patients to hospital specialists rather than prescribing it themselves. Sufferers say that lengthy waiting lists for some consultants would mean many in need having to wait for treatment.

"Each local health authority has to work out its own budget for Betaferon and allocate it accordingly but some authorities are not spending their budget," noted Susan Haylock at stockbrokers NatWest.

A spokeswoman for the MS Society, which speaks for 80,000 sufferers in the UK, noted that one health authority, Trent, had recently decided against providing funds for the drug.

"This product should be available equitably across the country," she said. "Treatment for this disease should not depend on where you live."

Betaferon, which had sales of DM265m (pounds 116m) in the first half of the year, was introduced into Europe last year after being previously available only in the US. It was hailed by some doctors as the biggest breakthrough in tackling multiple sclerosis in 20 years after the drug was shown to cut the frequency of relapses in MS sufferers by up to a third, though it does not halt the degenerative disease.

Betaferon is Schering's strongest selling product and significantly contributed to the group's 32 per cent rise in interim net profits of DM 244m on sales 11 per cent higher at DM2.6bn.

But ongoing problems in the UK forced Schering to revise this year's sales forecasts for the drug to DM 535m from an earlier target of DM600m.

Schering, which has been plagued by rumours of production problems of its high-profile drug, said it had no supply problems and had yet to feel the pinch from rival products. These include Avonex, made by US competitor Biogen.

Schering and Biogen are currently squaring off in US courts each accusing the other of patent infringements.

Analysts say some MS patients have adopted a wait and see approach until more efficacious products are available. "Patients are not exactly beating down their doctors' door to be prescribed the drug," Ms Haylock said.