Bitter pill for GSK profits
GlaxoSmithKline has blamed a decline in the local pharmaceutical industry for an 8 per cent dip in its Australian profit.
The subsidiary reported a net profit of $35 million for the 2012 calendar year, down from $38 million the year before.
The results were in an annual report filed with the Australian Securities and Investments Commission last month. But GlaxoSmithKline chose budget day to announce the figures. It lobbied the government to commit to improving clinical trial regulation, highlighting its $54 million investment in local research and development.
"The pharma industry in Australia appears to be in a negative cycle and GSK's results are a reflection of an industry trend," general manager of pharmaceuticals Geoff McDonald said.
"The Australian government has committed to a number of clinical trial reforms and it is imperative that these are implemented to ensure Australia remains competitive."
Despite highlighting its commitment to investing in medical research in Australia, the company spent 3 per cent less on R&D compared with last year.
The Australian subsidiary made $1.45 billion in sales revenue in 2012 - up from $1.44 billion in 2011.
Although revenue was higher, costs increased - particularly sales and marketing, which increased by $16 million.
But Mr McDonald said the company had, in fact, cut back costs as a result of government "red tape" over ethics approval of medical trials.
"For the industry as a whole, there are challenges in getting new medicines listed," he said.
"The process is long and arduous, and we're noting that even when the [Pharmaceutical Benefits Advisory Committee] has approved a medicine, we're still having to wait to get government approval."
The company's 2012 tax bill was $10 million lower due to over-providing in previous years, documents show.
In December, GSK was forced to sell off 25 products to Aspen Global Incorporated after their patents expired and they were opened up to competition from generic brands.
GlaxoSmithKline Australia is ultimately owned by GlaxoSmithKline International, based in Luxembourg.