Report: Greece owes pharma companies more than $1.2 billion in debts
- Greek hospitals and the European Federation of Pharmaceutical Industries and Associations (EOPYY), the country's state-run insurer, have not paid pharma debts since December 2014. According to Reuters, that debt has now surpassed the $1.2 billion mark.
- Greece is in deep debt, and may be forced to leave the euro zone as a result, or to declare bankruptcy.
- A similar, though less severe, situation occurred in Greece between 2010 and 2012, during which time Greece ran up huge pharma debts. The debts have since been repaid, though some were repaid with bonds that subsequently declined in value.
Currently, there are ongoing negotiations between the Greek government and the EOPYY. It is a very difficult siutation for the industry, as stopping supply is clearly not an option. Novo Nordisk tried to curtail insulin deliveries five years ago at the start of the crisis and protesters took to the streets. Still, there have been changes—most notably a shift from large-scale use of branded drugs to greater reliance on generics.
The implications of failure to pay have the potential to go beyond rising pharma debt levels. Manufacturers are concerned that other countries may try to use the artificially low price of drugs brought into the Greek market as reference points for overall pricing. In addition, there are concerns about drugs being exported out of Greece into other markets, thereby creating a secondary, substantially cheaper market.
While these issues are being addressed, the debt level is rising—a situation which will most likely be the status quo for the foreseeable future.