Health Care Reform Cuts Into Sales: Glaxo CEO

US health-care reform has cost the pharmaceutical company Glaxo SmithKline millions of dollars in lost sales, a trend expected to continue in the near term, Andrew Witty, its CEO, told CNBC Thursday.

“Last year, it cost GSK $170 million of lost sales, essentially in price reduction in the US market place,” said Witty, who runs the second largest drug maker by revenue. “In 2011, we’d expect another $150 million of price effect. The new farmer tax will levy another $130 million of cost into GSK’s expenses.”

On Thursday, the company reported a fourth-quarter loss after taking a previously-announced charge to provide for U.S. litigation over its diabetes drug, Avandia.

Witty added that inflation is a potential drain on the company as well.

“We have a price-control environment in about 60 percent of our business,” said Witty. “In Europe, I can’t remember the last time we had a price increase, and I’ve been in this business for 25 years. And in the US, we’ve seen the US become a much more difficult and a potentially negative pricing environment.”

The controversial US health-care bill, signed into law in 2011, has critics and supporters. On Wednesday senators overwhelminglyvoted to cancel the law's requirement that businesses, charities and state and local governments file income tax forms for every vendor that sells them more than $600 in goods. The battle is in the courts, too, where two federal judges have ruled against the law and two other judges have upheld it.

At the heart of the debate, the law requires most Americans to buy insurance, a so-called individual mandate that has become one of the principal points of opposition among Republicans and the tea party activists who propelled them to gains last year in the midterm elections.