Sharp declines in drug revenues in Europe and the US as austerity-struck governments demand price cuts saw Britain's biggest pharmaceuticals group, GlaxoSmithKline, yesterday warn of flat sales this year.
It is a blow for GSK, which had set itself a target of returning to sales growth this year, after suffering the impact of patent expiries and a record-breaking mis-selling fine in the US.
But the drug maker saw sales fall 2 per cent to £6.5bn in the three months to June, mainly due to its European business, where state health budgets were slashed and revenues fell 8 per cent.
The European division also saw a 1 per cent decline in demand as generic rivals continued to eat into sales of some of GSK's blockbuster drugs.
GSK's revenues for the quarter were £200m lower than City analysts had expected and the shares dropped by 19p to 1,426p.
Its chief executive Sir Andrew Witty has been pushing for GSK to diversify away from "white pills in Western markets".
He claimed the drug maker's research and development work during the quarter had been "remarkable".