(Refiles to add full name and title of Astra CFO in paragraph 14)
* U.S. reforms, generic pressure seen hurting 2011 sales
* Novartis shares suffer, Astra buoyed by $4bln buyback
* European pharma worries echo caution from J&J on prices
* Eli Lilly expects flat 2011 total revenue growth
By Kate Kelland and Katie Reid
LONDON/BASEL, Jan 27 (Reuters) - Drugmakers AstraZeneca, Novartis and Eli Lilly set a cautious tone for 2011, bracing the sector for challenging patent expiries and price pressures from U.S. health reforms.
While AstraZeneca cheered investors with above-forecast fourth quarter earnings on Thursday and a surprise promise to buy back $4 billion of shares, it joined its Swiss rival in warning of pressure from generics, U.S. reforms and price cuts.
The earnings come after diversified healthcare group Johnson & Johnson kicked off the big pharma season by posting disappointing sales and cautioning it was facing growing pressure from governments and insurers to keep a lid on prices.
Bristol Myers Squibb will provide more clues on the health of the sector when it reports later on Thursday.
Novartis, the first European drugmaker to report in this earnings season, missed forecasts with a 10 percent drop in fourth quarter core earnings per share (EPS) and said it expected sales for 2011 to be lower.
Figures from both Astra and Novartis were dampened compared with 2010, when profits were boosted by windfalls sales of H1N1 flu vaccines.
"If you look at what we're facing in 2011, we have more headwinds than we did in 2010," Novartis chief executive Joe Jimenez said. "We don't have the benefit of H1N1 and we've got more cost containment coming from the U.S. as some of the healthcare reform costs kick in."
Astra reckoned the impact of U.S. healthcare reform on sales would be close to $700 million in 2011, while Eli Lilly said the impact would lower 2011 revenue by $400 million to $500 million.
Shares in Novartis suffered, trading 2 percent lower at 1118 GMT. Astra's buyback news and above forecast EPS of $1.39, boosted its stock by around 2 percent.
PRICING PRESSURE
Astra is facing pricing pressure from key competitor brands losing exclusivity, such as Pfizer's Lipitor, which competes in the statin market with its blockbuster Crestor.
Sales of the cholesterol-lowering drug rose 24 percent in 2010 to $5.69 billion, across all regions.
"The coming years will be challenging for the industry and for the company as its revenue base transitions through a period of exclusivity losses and new product launches," Astra said.
Astra said several setbacks, including the dropping of its lung drug hopeful motavizumab and heart medicine Certriad, and a delay to a U.S. decision on a license for its blood thinner Brilinta, had led it to cut expectations for future sales from pipeline drugs to $3-$5 billion from $4-$6 billion.
Astra chief financial officer Simon Lowth said that impact would mean overall sales by 2014 were likely to be in the middle of its $28-$34 billion forecast, rather than at the top end as it had previously hoped.
Novartis, which has had one of the most lucrative pipelines in the industry, said the uptake of multiple sclerosis pill Gilenya was in line with its expectations, recording sales of $13 million since its launch in October.
The group also said its newest products, such as its generic version of Sanofi-Aventis' blood thinner Lovenox and cancer drug Tasigna, which Novartis is hoping will replace older blockbuster Glivec, performed well. (Additional reporting by Paul Sandle in LONDON, editing by Alexander Smith)