Deadbeat Europeans owe drugmakers up to $19.5B

What's bigger, Big Pharma or Europe's big, bad debt? These days, it's a toss up. According to a new report from the European Federation of Pharmaceutical Industries and Associations, deadbeat states now owe between £9.5bn and £12bn for drugs, or between $15.4 billion and $19.5 billion. At the upper end, that almost amounts to Bristol-Myers Squibb's ($BMY) 2011 sales, worldwide.

Of course, Bristol-Myers isn't the only company owed. Far from it. Spread the pain around, and Europe's unpaid bills amounted to about 8% of the drug industry's sales in the region, GlaxoSmithKline ($GSK) CEO Andrew Witty--who's also president of EFPIA--has said. And despite some bill collections, the total owed has only grown.

The bad-debt problem is so bad that companies have changed their strategies accordingly. Roche ($RHHBY) said it would put the worst-paying customers on a C.O.D. payment plan. Merck KGaA did the same. Novartis ($NVS) incentivizes salespeople to not only market its drugs, but collect its bills. Sanofi ($SNY) and several other companies have revamped their product offerings, weighting their portfolios toward older, less-expensive drugs in slow-paying countries.

- read the This Is Money piece