Greece adopts more drug budget cuts

It's official: Greece's parliament has approved more drug spending cuts. The cost moves are part of a quid pro quo for the 130 billion euro government bailout, so they're not entirely unexpected. But they add to a series of financial insults to drugmakers, making the Greek market less hospitable to branded drugs.

The new measures will limit spending on drugs by state pension funds, and they'll mandate broader use of generic drugs. The aim is to raise Greece's abnormally low generics utilization rate of 18% to 50%. The target isn't unreasonable; as Reuters reports, it's pretty much in line with the rest of Europe. In fact, 80% of prescriptions in Germany are filled with generic drugs.

The move away from branded drugs and spending limits at the state level come as state governments have struggled to pay their drug bills. It's been an ongoing saga of unpaid invoices, payments in discounted bonds, and threats from fed-up drugmakers. Some companies have grown more selective about their sales, shipping to quick-to-pay pharmacies rather than in-arrears hospitals, for instance. Some have gone c.o.d., while others are incentivizing employees to collect on bills. Several are shifting their product offerings toward older, cheaper meds to limit their exposure.

- read the Reuters news