Pharma: Ensuring supply is priority as Greek drug debt passes €1.1bn

By Dan Stanton contact

- Last updated on GMT

Greece's pharma arrears has increased by over €170m since the end of March
Greece's pharma arrears has increased by over €170m since the end of March

Related tags: Pharmaceutical industry

Drug companies will continue to supply Greece for the time being, but mounting debts make it hard to predict what will happen in the longer term according to industry group EFPIA.

As well as playing havoc with Europe’s future​, the ongoing financial crisis in Greece is affecting the pharma industry and unpaid debts are continuing to increase, according to industry body European Federation of Pharmaceutical Industries and Associations (EFPIA).

The information given to EFPIA is that the arrears amounted to €1.03bn [$1.16bn] in March 2015. We are able to confirm that the arrears have now increased and amount to upwards of €1.1bn now,” ​spokesman Faraz Kermani told in-Pharmatechnologist.com.

Data​ based on companies’ unpaid invoices and compiled by SFEE - the Greek research-based pharmaceutical industry organisation and EFPIA affiliate – show €651m was accrued in 2014 and a further €320m added in the first three months 2015.

“Against this background, it is not really possible to predict accurately what might happen going forward,”​ Kermani said. He added the priority for EFPIA is to “ensure the security of the supply of medicines to patients in Greece.”

GlobalData analyst Joshua Owide told this publication in January​ the situation isn’t sustainable in the long-term: “With cost containment already affecting profitability of multinationals in the EU region, the debt crisis is a deterrent, and may have long-term implications on their willingness to operate in the region.”

Merck & Co. and Pfizer have already reported that they are owed millions for drugs supplied on credit to Greece. We contacted other EFPIA members to find out how they are being affected by the escalating situation.

Uninterrupted supply

According to Roche’s annual report,​ the firm has been affected by increasing financial difficulties in Southern European countries” ​since 2010, and – at the end of last year – was owed 9.7bn Swiss francs (€9.2bn) by countries including Greece but also Spain, Italy, and Portugal.

Spokesperson Claudia Schmitt said Roche is applying new commercial policies with selected hospitals in these countries and patients will continue to have access to its products in Greece.

“The supply of medicines has never been interrupted to date despite the current challenging environment and the significant payment delays that lately Roche is repetitively experiencing,”​ she told us.

Ongoing discussions

Boehringer Ingelheim is also affected by the Greek crisis, but while spokesperson Heidrun Thoma told us it is “not directly concerned by payment arrears,”​ the German drugmaker is being negatively impacted by arrears to pharmacists who face liquidity issues.

Despite this, “we will do our utmost to ensure that patients have access to medicine,”​ she said. “We hope that discussions between the Greek Industry Association and the Government will lead to solutions. We are monitoring the situation closely.”

We also spoke to Novo Nordisk which in 2010​ temporarily suspended supply of its insulin pen injection products to the cash-strapped country due to a 25% government price cut.

“We are not affected by the current situation in Greece in a significant way, and we have not stopped supplying Greece with products,”​ said Novo Nordisk’s Senior Vice President, Mike Rulis.

“Most of our products are used in a primary care setting. We supply pharmacies via wholesalers and distributors and we are getting paid.”

Related topics: Markets & Regulations, Globalization

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