Drugmakers offer Greece option to end bad debt spiral

Drug companies are offering to take a haircut this year on what Greek hospitals owe them if the government will pay the debt and stop its healthcare facilities from running up more unpaid drug bills.

The proposal from the European Federation of Pharmaceutical Industries and Associations (EFPIA) comes even as Merck KGaA acknowledged it will no longer deliver to Greek hospitals its best-selling drug, cancer medication Erbitux. Merck emphasized it is just the one drug and just in Greece. It also pointed out that Greek patients can buy the drug themselves directly from pharmacies.

Under pressure to pay down its high public debt, Greece has been cutting support to public sectors. Some hospitals in turn have simply quit paying their drug bills. The same kind of issues have been playing out in some other EU countries, but the situation is more severe in Greece, where the government recently banned any drug exports to try to avoid drug shortages.

In a letter to the Greek government, the EFPIA said drugmakers are willing to take €2.88 billion ($3.70 billion) for the year, Reuters reports. That is the same amount the government earlier this year told its public healthcare providers they would be limited to. The report does not indicate exactly how much is owed.

The offer comes with some provisos. The government must agree to take on the obligation and to stop hospitals from continuing to run up more unpaid bills with drug companies. If the provisions are not adhered to, the drug companies would be able to come after hospitals for everything they are owed this year. 

EFPIA Director General Richard Bergström said drugmakers are not happy about the situation, but it is better to make the offer if it will get the country to some kind of stability with drugmakers. Reuters reports that the same kind of offer has been agreed to in Portugal, Ireland and Belgium.

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