For the second time since Greece began facing a fiscal crisis, a big drugmaker has stopped delivering drugs to the beleaguered nation. More specifically, Roche is no longer sending meds for cancer and other afflictions to state-owned hospitals that have not paid their bills and the drugmaker may do the same in other countries, such as Spain, Italy and Portugal, where bills are going unpaid.
There are hospitals “who haven’t paid their bills in three or four years,” Roche ceo Severin Schwan tells The Wall Street Journal. “There comes a point where the business is not sustainable anymore.” State-funded hospitals, which are nonprofit, “had this habit of not paying the pharma industry.” Some have become better at paying since Roche has cut them off, he adds. To allay consumer fears, deliveries to pharmacies are being increased, although some hospital patients must take injectable meds back to the hospitals for administration.
Last year, Novo Nordisk yanked its diabetes product from Greece after the government instituted substantial price cuts of up to 25 percent on hundreds of medicines, which the Danish drugmaker claims would force it to lose money on top of the $36 million it is already owned by the Greek government. Novo reversed course after price cuts were rolled back somewhat, although by then, patient groups called the move “brutal capitalist blackmail” and a “violation of corporate responsibility” (back story).
Greek hospitals have large debts to many drugmakers, the Journal writes, citing data from the Hellenic Association of Pharmaceutical Companies, or SFEE. As of June 30 this year, Greek state-financed hospitals paid 37 percent of the $2.6 billion) worth of drugs delivered by SFEE member companies in the 18 months through June, 2011.
Earlier this year, Greece tried to reduce some of its debts for medicines by giving drugmakers government bonds, although that failed to impress Schwan.. “We didn’t have a choice. Everybody got government bonds. The question was, you got nothing or you got government bonds,” he tells the paper, adding that Roche sold the bonds immediately. Nonetheless, he maintains he is unaware of any patient protests over the move, but he can imagine hospital administrators “didn’t like it.”
Roche started cutting off certain Greek hospitals after issuing warnings last summer. Greek hospitals and pharmacies generally pay Roche directly and then seek reimbursement from the taxpayer-funded health-care system, the paper writes. By contrast, pharmacies are privately owned. Meanwhile, should the Greek financial situation still worsen, Roche could “have even more troubles” collecting its debt, Schwan worries. So far, there is no statement from the Greek Cancer Society.