DUBAI (Reuters) - Swiss drugmaker Roche Holding ROG.VX expects sales from its diagnostic division to grow faster in the United States than the market trend and it will not reduce prices despite reimbursement cuts in the U.S. health programme, an executive said.
In April, the U.S. released final reimbursement rates for 2015 Medicare Advantage plans, which insurers and Wall Street analysts say represents a cut of about 3 percent. That comes after a year in which the government cut payments by about 6 percent.
“Reimbursement will continue to come under pressure as all healthcare funding comes under pressure,” Roland Diggelmann, chief operating officer of Roche Diagnostics Global, told Reuters in Dubai. “There are reimbursement reductions, but we also see an increase in testing volumes.”
Roche’s diagnostics business had sales worth 10.5 billion Swiss francs ($11.72 billion) last year, a quarter of which came from North America. First-quarter sales revenue rose 7 percent at constant exchange rates to 2.46 billion Swiss francs.
Diggelmann said Roche’s diagnostics sales growth in the U.S. would be “above the market... consequently we don’t see a need to reduce pricing”.
“We’ve had a very good start to the year in the U.S,” he said. “We see really good demand. Diagnostics is the key to sustainable healthcare.”
Diggelmann said the diabetes business, which accounted for 23 percent of the diagnostic division’s sales last year, would remain volatile.
“It will be impacted by most likely continuous reimbursement reductions, but we remain positive about the market for diabetes because fundamentals are very strong,” said Diggelmann.
He estimated there were about 380 million people globally with diabetes, many of whom had yet to be diagnosed.
“This corresponds with the changing lifestyle we’ve observed so there will be a higher prevalence of diabetes in developing countries as well as developed countries,” added Diggelmann.
($1 = 0.8958 Swiss Francs)
Reporting by Matt Smith; editing by Jason Neely