Novo Nordisk (NYSE: NVO) doesn't like the Greek price cuts. So, instead of discounting its medicines by 25 percent as ordered, it's keeping prices the same on its newest insulin products, forcing Greek wholesalers to either take a loss or stop ordering them. Already, the wholesalers have chosen the latter.
And there are signs that more drugmakers will follow suit: In fact, dermatology and critical-care drugmaker Leo Pharma says it's withdrawing some products from Greece altogether. Both it and Novo say the Greek government owes them money.
Greece imposed the price cuts as part of its desperate battle against an ongoing financial crisis. Spain, too, has proposed some price cuts, but they aren't quite as deep. (Germany is "reforming" its drug pricing, too.) The fear is that such discounting will spread across Europe; in announcing its product withdrawals, Leo said the Greek discounts would encourage other cash-strapped countries such as Ireland and Italy to do the same.
Novo CEO Lars Sorensen called the Greek discounts unacceptable. "It will have a rub-off effect on the European price level, and it has an effect on other markets outside Europe where the Greek prices are used as a reference price in negotiations with governments," Sorensen tells Reuters. Who's next?
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