Several Multinational Pharma Companies Implement Tough New Credit Policy amid Reports of Major Drug Shortages in Greece

More Multinationals Ask for Cash on Delivery

A group of multinational pharmaceutical companies operating in Greece are reported to have implemented new tougher credit policies in the face of continued difficulties with payments in Greece, reports Greek health news provider Iatrikos Typos. The source reports that there have already been shortfalls in the supply of medicines from the companies in question, while it is expected that the situation is due to worsen soon because of a lack of liquidity in the system. The response of a number of multinational pharmaceutical companies has reportedly been to demand cash upon delivery to wholesalers, as well as to reduce shipment of their products to Greece in general.

The source reports that the Greek subsidiaries of a number of multinational companies are now no longer accepting credit for the payment of invoices, but are demanding that payment be made by cash or remittance in advance. The companies reportedly involved are:

• Bayer (Germany)
• Leo Pharma (Denmark)
• Nycomed (Switzerland)
• Novartis (Switzerland)

The source reports that the result of this is likely to be more shortages of medicines on the Greek market, as the wholesalers may be unable to meet the demands of the new credit policy because of a lack of liquidity, while the Greek subsidiaries of these companies may, reportedly, also not receive sufficient quantities of medicines from their parent companies, considering the prevailing situation in Greece.

Patients Lack Funds for Co-Payments

Meanwhile, the shortages of medicines in Greece resulting from the poor liquidity of Greek wholesalers and state healthcare facilities is being compounded by the increasing number of patients who are foregoing treatment because they cannot afford medicines, reports Iatrikos Typos, citing Greek online news provider Real News as its source. The source reports the estimate of Costas Lourantos, president of the Pharmaceutical Association of Attica, that 4 out of every 10 holders of social insurance policies in Greece are unable to afford the money for co-payments and are therefore diluting doses or discontinuing treatment every day.

P&R Conditions Set to Become Harsher

The source reports that the Greek Ministry of Health is planning even harsher measures in the pharmaceutical pricing and reimbursement (P&R) sphere, including increased patient co-payments and, for the first time in the country, eligibility criteria for reimbursement based upon income.

Shortages Result in "Race" for Medicines

Even for patients who can afford to buy medicines, there are reported to be widespread drug shortages in the country, including some that have no therapeutic equivalents. Real News describes the "race" to find drugs that some patients are forced into, simply because if they do not find them, their lives would be at risk. These include oncology, cardiovascular, epilepsy, Parkinson’s disease and diabetes drugs. The source reports that it has had access to a confidential document from the Greek Association of Pharmacists, destined for the National Organisation for Medicines (EOF), in which it is written that the situation regarding the shortages of medicines in Greece is "beyond all limits of tolerance". The association demands that the EOF controls the high quantity of parallel exports of these medicines and also controls the bad debt credit that results in pharmaceutical companies limiting or refusing supplies. K Theodosiadis, President of the Pharmaceutical Association of Thessaloniki, reports that the situation is like that of a "third world" country.

Outlook and Implications

It has been previously reported that a number of multinational pharmaceutical companies have adopted such policies of cash on demand in Greece; these include Bayer, from the list above, and also Novo Nordisk (Denmark) and Roche (Switzerland). Assuming that the latter two companies still have such a policy in place, this kind of policy is reportedly becoming quite widespread in the country.

A combination of factors—including reduced supplies by multinationals, liquidity problems of wholesalers and state healthcare facilities, parallel exports and the economic hardship of many Greeks—is creating a potentially devastating situation for Greece, and one from which it is difficult to see an easy way out.

The fact that the government is planning even harsher measures means that the situation could become even worse in the short-to-medium term. Much emphasis is being placed by the Greek authorities on increasing the use of generics, and this is also a major part of the plans of the troika comprising the IMF, World Bank and European Commission. Given the lack of a generics "culture" in Greece, this could be exacerbating the problem, as patients may insist on continuing to take the same drugs they are used to.

There is simply a conflagration of too many difficult issues facing the Greek pharmaceutical sector, the outcome of which is negative for patients and pharmaceutical companies.