‘Medical stocks are down by 90 percent’: Greece accuses pharma giants of slashing imports

‘Medical stocks are down by 90 percent’: Greece accuses pharma giants of slashing imports:
Pfizer, Roche, GSK and AstraZeneca are among the producers thegovernment says have either stopped providing certain medicines tothe debt-stricken country, or plan to do so, according to the UK’sGuardian newspaper. Pfizer and Roche admit that they have done so,but GSK and AstraZeneca deny that they have reduced supplies sofar.
"It's a disgrace. The government is panic-stricken and themultinationals only think about themselves,” said DimitrisKarageorgiou, secretary of the Panhellenic PharmaceuticalAssociation.
As the news has spread, patients with prescriptions forantibiotics, statins and other medicines totalling over 200 brandnames, began queuing outside pharmacies.
“I would say supplies are down by 90%,” saidKarageorgiou.
“The companies are ensuring that they come in dribs and drabsto avoid prosecution. Everyone is really frightened. Customers tellme they are afraid of losing access to medicationaltogether.”
But the multinationals say the government’s own lack ofregulation has created this crisis, which has been more than twoyears in the making.
Under the current system, individuals in Greece buy medicinesfrom pharmacies, and are later reimbursed by the state, with thestate setting the prices the drug stores can charge. In the wake ofthe country’s financial crisis, the government ordered itspharmacies to sell drugs at much lower prices, to cut down its ownbudget expenditure.
But as Greek prices are now 20 percent below the next-cheapestcountry in Europe, this has created an incentive for pharmacists tosimply re-sell drugs to other countries in the EU, creating a“parallel trade”. The health ministry estimates that over 25percent of all drugs entering Greece are then re-exported.
Pharmaceutical companies have already lowered their prices forthe Greek market, but are now saying that the re-export is startingto eat into their profits in other European countries.
They also point out that as well as paying less, Greek insurancefunds and hospitals owe €1.9 billion to drug manufacturers.
"We are insisting that the public hospitals fulfil theircontracts and this is something we do in any country … We arewithholding medicines until they meet their obligations," saidDaniel Grotsky, a Roche spokesman.
The Swiss company is owed €200 million. Grotsky said Roche isstill supplying individual pharmacies, and only drugs wherealternatives are available have been held back.
Frouzis Konstantinos, of Novartis, another drug giant, says thegovernment needs to pay up its existing debt, and stop squeezingthe profit margins of pharmacies.
"The government needs to correct these wrong prices to avoida surge of exportation,” he told the Guardian.
But this is unlikely.
Under the austerity budget the state’s allocation for medicineshas fallen from €3.7 billion in 2011 to €2.44 last year, and thenumber for 2013 is likely to be even lower.
Instead, the government has banned exports of more than 60 drugsaltogether, and says it will levy fines of between €2,000 and€20,000 on those pharmacies that re-export illegally.