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Worldâ€™s drug companies pull out from Greece over Government price cut

31 May 2010 13:08 (UTC +04:00)

Baku - APA-Economics. Leo Pharma, which makes medicines for dermatological problems and critical care, said it was in dialogue with Greek authorities to find an alternative to withdrawing items from the market in Greece, Herald Sun reported.

"However, given the decision of the Greek authorities to insist on introducing a price reduction of 25 per cent on average, we see no other solution than to withdraw some of our products from the Greek market," it said.

"Since Greek prices on our products are reference points for prices in a number of European countries, we risk that prices in e.g. Spain, Portugal, Italy, Romania, Turkey, Czech, Hungary, etc. will also be subject to severe reductions if we do not act," it said.

The company said a price reduction on its products of up to 37 per cent would have severe consequences for its business. On Saturday Danish pharmaceutical Novo Nordisk, the world’s largest producer of insulin to treat diabetes, said it would not lower the price on 17 types of new generation insulin medication, which would render them unavailable in Greece.

It also quoted financial reasons, saying its operations in Greece would become loss-making if it complied with the cut. Greece has accumulated debt of nearly â‚¬300 billion ($436 billion) and was narrowly saved from default in May by the first instalment of an â‚¬110 billion bailout loan from the European Union and the IMF.

The Government had to adopt unpopular austerity measures to clinch the loan, including tax hikes, wage and pension cuts and a hiring freeze in the civil service. It also pledged to trim massive waste in state hospitals which have a combined debt of around â‚¬5.6 billion.

Novo Nordisk said it had some â‚¬30 million worth of unpaid invoices in Greece. The Greek debt to Leo Pharma was approximately â‚¬37 million, the company said.

Novo Nordisk spokesman Mike Rulis said Saturday the decision to pull the 17 types of medication from the Greek market was not related to the outstanding invoices.

"Our decision here is entirely based on the fact that we have been subjected to this immediate 25 percent reduction of prices on products which are already priced at a very low level in Greece," he said.