The world’s biggest supplier of insulin is supplying drugs only to those Greek hospitals that are able to pay in cash.
In the latest sign of a squeeze in medical supplies as the country’s economic crisis intensifies, Novo Nordisk has adopted a “cash on delivery” policy after running up years of debts in Greece that eventually were settled in government bonds, which have since slumped in value on the debt markets.
“In Greece, we were owed a lot of money,” a spokesman for the Danish company said. “Since we decided to have cash on delivery for the hospitals, we have had no major debt issues.”
The policy is unusual in the pharmaceuticals industry, which usually operates long-term supply accounts with hospitals. Novo is following its fellow European drugs groups Roche and Sanofi in clamping down on shipments of pharmaceuticals to Greece. Debts owed to drugs companies by Greece’s public hospitals have reached €900 million, with GlaxoSmithKline and AstraZeneca among the creditors.
Until the country’s economic crisis, Greece was Europe’s biggest spender on drugs on a per-person basis. Greek people typically spent €700 per capita on pharmaceuticals in 2008, while Britain spent €250, according to a report produced for the European Parliament.
Advertisement
The discrepancy was due, in part, to Greece’s pricing policies, which keep the cost of off-patent generic medicines higher than elsewhere.
Panos Kanavos, a reader in international health policy at the London School of Economics, said medicines were a key area for the Greek Government in its efforts to reduce public spending: “An obvious target by the Government is to reduce drug spend and bring it in line with that of other countries.”
The pharmaceuticals industry’s payment woes are not confined to Greece. Spain and Italy have built up debts totalling more than €8 billion, with repayment for some averaging as high as 400 days.
The European Federation of Pharmaceutical Industries and Associations said that, as of the end of March, Spain’s debt to the industry was nearly €5.2 billion, while Italy’s was under €3.25 billion. The association said the Spanish and Italian authorities were considered less at risk of ultimately defaulting on their debts.
• Richard Staines is a reporter for APM Health Europe