* Moody's sees 'modest reduction' in pharma earnings growth
* Outlook reduced to stable from positive
* EBITDA seen rising 3-4 pct/year vs 4-5 pct previously
By Ben Hirschler
LONDON, March 3 (Reuters) - The pharmaceutical industry faces growing pressure on prices and is struggling to get some new products adopted by cost-conscious healthcare providers, pointing to slower profit growth for the sector.
That's the verdict of Moody's Investors Service, which said on Thursday it expected annual growth of 3-4 percent in earnings before interest, tax, depreciation and amortization (EBITDA) for the next 12-18 months, down from 4-5 percent seen previously.
Drug prices, which have long been under pressure in Europe and Japan, are becoming a hot political topic in the United States, the industry's biggest and most profitable market, in the run-up to November's presidential election.
A pledge by U.S. Democratic candidate Hillary Clinton in September to rein in medicine costs spooked investors, contributing to a sell-off in pharmaceutical and biotech stocks.
Against that sensitive backdrop, many U.S. manufacturers are making more modest price increases than in the past.
"We are changing our outlook for the global pharmaceutical industry to stable from positive because of a modest reduction in our expectations for the industry's earnings growth," said Moody's Senior Vice President Michael Levesque.
The global drugs industry enjoyed a bumper year for new drug approvals in 2015, with the U.S. Food and Drug Administration approving 45 novel medicines, four more than in 2014 and the most since the all-time record of 53 set in 1996.
Despite this, companies are struggling to get a decent return on the billions of dollars spent annually on research and development - and expensive new drugs do not always find willing buyers.
Although demand for new cancer medicines is generally strong, uptake of new heart drugs such as Novartis' Entresto, Sanofi's Praluent and Amgen's Repatha has been slower than many investors had hoped.
For U.S. companies, the strong dollar is a further headwind that Moody's said would reduce net profits in 2016 and likely in 2017. It will, however, have a positive impact for many European manufacturers.
Faced with a squeeze in growth rates, drug companies may well continue to seek to save costs, including by doing more deals.
"Pharmaceutical companies will remain active in the M&A market as they try to cut costs, achieve greater scale and diversification and acquire pipeline drugs with high potential," Levesque said.
The healthcare sector saw its biggest deal-making streak ever in 2015, with global transactions totalling $673 billion, according to Thomson Reuters data.
(Editing by Mark Trevelyan)