Berlin - Greece is saving. In order to fulfill the requirements of the EU states and the International Monetary Fund (IMF) for the loans of up to 110 billion euros, cuts are also being made among pharmaceutical manufacturers, wholesalers and pharmacies. The government under Prime Minister George Papandreou has decided on measures in great haste. New medicine prices are in force since the beginning of the month.
The government has lowered the prices of medication by a quarter. Pharmacists, wholesalers and manufacturers are equally affected. According to media reports, 1 billion euros are to be saved in this way – 10 per cent of the medicine expenses of the previous year, totalling 9.5 billion euros.
The first manufacturers are already threatening to stop deliveries, and international pharmaceutical concerns have announced the closure of their Greek branches. Greece's pharmacists (around 9300 in total) are also angry, as their margin was decreased by between 20 and 27 per cent without a transitional arrangement. "It is unfair", says an annoyed pharmacist in Crete. He also warns: With the low medicine prices, the government is jeopardising the provision to the population. "Soon patients will no longer be able to obtain medicines in the pharmacies: The shelves will be empty", the pharmacist told PHARMA ADHOC.
The 150 wholesalers also feel like they have been trampled by the government and they see a threat to their existence. They are in fact doubly affected by the cost-cutting measures: The wholesale margin also sinks progressively in accordance with medicine prices by up to 27 per cent. In addition, the government is excluding the former full range providers of high-priced medication. They have to remove around 90 preparations costing 1000 euros and above from their selection of products.
The loss of stock value alone equals up to 30 per cent, one wholesaler estimates. The level of total loss is "catastrophic", he adds. In their negotiations with the government, they were not able to gain recognition with their suggestion to lower the margin for high-priced medicines to between 2 and 3 per cent. "We want to participate in the cost-cutting measures, but they must not threaten our existence", says one wholesaler. He makes reference to the many Greek islands that ensured higher costs of medication supply in an international comparison.
The wholesalers are also suffering from the industry-wide liquidity squeeze: They have to settle the manufacturers' bills within a maximum of 30 days, but sometimes wait more than six months for their receivables, not least because the health insurance companies are late with payments. Loans are now very difficult to obtain, because the bad ratings of credit rating agencies have caused the interest receivables of the banks to skyrocket.
In order to placate the financial markets, the government wants to increase VAT to 23 per cent. Medicines are also affected: The reduced rate has already been raised from 9 to 10 per cent; further increases are to be discussed. Today 21 per cent is already being added to nutritional supplements, cosmetics and diet programs; the total rate is under debate. The end is not within sight: Currently, a general VAT rate of 25 per cent is being discussed.
Wholesalers met in Athens. They hope to be able to persuade the government to change the cost-cutting measures. Their chances aren't bad: "The revisions were decided in haste", states an observer. It is clear to all involved that there is a need for amendments.
The government has lowered the prices of medication by a quarter. Pharmacists, wholesalers and manufacturers are equally affected. According to media reports, 1 billion euros are to be saved in this way – 10 per cent of the medicine expenses of the previous year, totalling 9.5 billion euros.
The first manufacturers are already threatening to stop deliveries, and international pharmaceutical concerns have announced the closure of their Greek branches. Greece's pharmacists (around 9300 in total) are also angry, as their margin was decreased by between 20 and 27 per cent without a transitional arrangement. "It is unfair", says an annoyed pharmacist in Crete. He also warns: With the low medicine prices, the government is jeopardising the provision to the population. "Soon patients will no longer be able to obtain medicines in the pharmacies: The shelves will be empty", the pharmacist told PHARMA ADHOC.
The 150 wholesalers also feel like they have been trampled by the government and they see a threat to their existence. They are in fact doubly affected by the cost-cutting measures: The wholesale margin also sinks progressively in accordance with medicine prices by up to 27 per cent. In addition, the government is excluding the former full range providers of high-priced medication. They have to remove around 90 preparations costing 1000 euros and above from their selection of products.
The loss of stock value alone equals up to 30 per cent, one wholesaler estimates. The level of total loss is "catastrophic", he adds. In their negotiations with the government, they were not able to gain recognition with their suggestion to lower the margin for high-priced medicines to between 2 and 3 per cent. "We want to participate in the cost-cutting measures, but they must not threaten our existence", says one wholesaler. He makes reference to the many Greek islands that ensured higher costs of medication supply in an international comparison.
The wholesalers are also suffering from the industry-wide liquidity squeeze: They have to settle the manufacturers' bills within a maximum of 30 days, but sometimes wait more than six months for their receivables, not least because the health insurance companies are late with payments. Loans are now very difficult to obtain, because the bad ratings of credit rating agencies have caused the interest receivables of the banks to skyrocket.
In order to placate the financial markets, the government wants to increase VAT to 23 per cent. Medicines are also affected: The reduced rate has already been raised from 9 to 10 per cent; further increases are to be discussed. Today 21 per cent is already being added to nutritional supplements, cosmetics and diet programs; the total rate is under debate. The end is not within sight: Currently, a general VAT rate of 25 per cent is being discussed.
Wholesalers met in Athens. They hope to be able to persuade the government to change the cost-cutting measures. Their chances aren't bad: "The revisions were decided in haste", states an observer. It is clear to all involved that there is a need for amendments.
Janina Rauers, Fri, May 21, 2010 04:32pm CET
GREECE Pharmacists and wholesalers must pay heavily
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