Posted on behalf of Marian Turner.
The Greek government’s debt problem is hitting the supply of drugs to the country’s hospitals, according to the Wall Street Journal.
The report says that Swiss pharmaceutical company Roche Holding AG stopped supplying public hospitals in Greece with drugs earlier this year, following the hospitals’ failure to obtain government reimbursement for drugs the hospitals had purchased directly from the company.
Roche is now delivering its drugs to pharmacies instead, which it says have been more reliable in paying accounts than the public hospitals.
Greek hospitals have been accumulating drug debts for years. In December 2009, the Financial Times reported claims by pharmaceutical companies that around €7 billion (US$9.6 billion) worth of drugs and other medical products had not been paid for. In June 2010, the Greek ministries of finance and health issued a joint statement saying that debts to the first half of 2007 had been repaid, but an additional €5.6 billion in public hospital debt had accumulated in the following three years. The government announced a zero-interest bond scheme to repay the pharmaceutical companies. The statement said the measures were designed “to ensure that Greek public hospitals will not run into any problems in procuring medical supplies for 2010 and onwards”.
That intention seems not to have worked. In June 2011, the Hellenic Association of Pharmaceutical Companies (SFEE) announced that only 37% of public hospital accounts with pharmaceutical companies over the previous 18 months had been paid, leaving a further €1.2 billion of debt as of the end of June.
And the issue may not end in Greece. Severin Schwan, chief executive for Roche, also told the Wall Street Journal that some government-funded hospitals in Spain, Italy and Portugal are also behind on payments, and indicated that the company is considering extending its action to other European countries.