The Greek government has reportedly accused 50 leading pharmaceutical companies of cutting off supplies of key medications to the country, sparking a run on pharmacies. Drug companies say the cheap medicines they supply merely get re-exported at a profit.
Pfizer, Roche, GSK and AstraZeneca are among the producers the government says have either stopped providing certain medicines to the debt-stricken country, or plan to do so, according to the UK’s Guardian newspaper. Pfizer and Roche admit that they have done so, but GSK and AstraZeneca deny that they have reduced supplies so far.
"It's a disgrace. The government is panic-stricken and the multinationals only think about themselves,” said Dimitris Karageorgiou, secretary of the Panhellenic Pharmaceutical Association.
As the news has spread, patients with prescriptions for antibiotics, statins and other medicines totalling over 200 brand names, began queuing outside pharmacies.
“I would say supplies are down by 90%,” said Karageorgiou.
“The companies are ensuring that they come in dribs and drabs to avoid prosecution. Everyone is really frightened. Customers tell me they are afraid of losing access to medication altogether.”
But the multinationals say the government’s own lack of regulation has created this crisis, which has been more than two years in the making.
Under the current system, individuals in Greece buy medicines from pharmacies, and are later reimbursed by the state, with the state setting the prices the drug stores can charge. In the wake of the country’s financial crisis, the government ordered its pharmacies to sell drugs at much lower prices, to cut down its own budget expenditure.
But as Greek prices are now 20 percent below the next-cheapest country in Europe, this has created an incentive for pharmacists to simply re-sell drugs to other countries in the EU, creating a “parallel trade”. The health ministry estimates that over 25 percent of all drugs entering Greece are then re-exported.
Pharmaceutical companies have already lowered their prices for the Greek market, but are now saying that the re-export is starting to eat into their profits in other European countries.
They also point out that as well as paying less, Greek insurance funds and hospitals owe €1.9 billion to drug manufacturers.
"We are insisting that the public hospitals fulfil their contracts and this is something we do in any country … We are withholding medicines until they meet their obligations," said Daniel Grotsky, a Roche spokesman.
The Swiss company is owed €200 million. Grotsky said Roche is still supplying individual pharmacies, and only drugs where alternatives are available have been held back.
Frouzis Konstantinos, of Novartis, another drug giant, says the government needs to pay up its existing debt, and stop squeezing the profit margins of pharmacies.
"The government needs to correct these wrong prices to avoid a surge of exportation,” he told the Guardian.
But this is unlikely.
Under the austerity budget the state’s allocation for medicines has fallen from €3.7 billion in 2011 to €2.44 last year, and the number for 2013 is likely to be even lower.
Instead, the government has banned exports of more than 60 drugs altogether, and says it will levy fines of between €2,000 and €20,000 on those pharmacies that re-export illegally.