Foreign pharmaceutical companies reduce investment to zero

SFEE: Multinationals leave Greece outside the map until the end of 2015, due to increased rebates and claw-back


By Georgios Sakkas


The Greek subsidiaries of multinational pharmaceutical corporations are left outside the investment choices of their parent companies, as heightened uncertainty about their future, mainly as a result of higher rebates and claw-back, induces a shift in strategies towards cutting-back their activity.

According to the senior management of SFEE, the extra burden of €600 million placed on companies for 2014, in an effort to meet the government’s pharmaceutical budget target of €2 billion euro, leaves companies with few options: withdrawals of their products from the market, personnel layoffs or even disinvestment from the Greek market.

Speaking to Naftemporiki, the President of SFEE, Mr Konstantinos Frouzis, said that the parent companies, faced with the developments in the Greek market and the uncertainty due to repeated ministerial decisions and a lack of a pharmaceutical policy agenda, have left Greece outside their budgets for the remainder of 2014 through to 2015. In fact, Mr Frouzis stated, the big problem is that the pricing errors still remain uncorrected, which naturally makes the marketing of products in the country unaffordable, not so much because of loss-making sales but mainly because erroneous prices also affect pricing in other countries.

In a press conference held yesterday, the representatives of SFEE announced their decision, as a first and immediate response, to lodge an appeal before the Council of State, focusing on three legal areas: As indicated by the legal advisor of SFEE, Mr Konstantinos Kalavros, the appeals seek to redress: (i) repeated violations of the Constitution, as ministerial decisions tend to supersede legislation; (ii) the ministerial  decision requiring the industry to cover the difference between the social security price and the retail price; and (iii) failure to correct errors in pricing.


More than €1 billion in arrears

Apart from the investment-hostile environment, the public sector’s arrears to pharmaceutical companies continue to be a nightmare for companies. In particular, according to data from SFEE members, the total amount due is more than €1 billion. Specifically, by the end of June, arrears to SFEE member companies amounted to €1,045, of which more than 50% accrued during 2014. It should be noted that as all public sector payments (excluding those referring to June) are more than three months in arrears, the amounts are long overdue and payable.

Based on SFEE data, out of the total public sector debts, €26 million concern 2012, €487 million concern 2013 and €532 million concern the first half of 2014. Also, €619 million are owed by EOPYY, of which €315 million are overdue from 2013. The debts of NHS hospitals amount to €413 million, the bulk of which (i.e. €232 millions) accrued in 2014, while the debts of public hospitals are just €22 million.

Moreover, pharmaceutical companies note that the Greek State is making selective payments to healthcare providers, in particular the industry is about 8 month behind other providers, as the latest payments it received date back to last September, while payments to other suppliers were made as recently as spring 2014.


Across the board measures

The senior management of SFEE pointed out the emerging gloomy outlook for the companies and for healthcare provision alike. The snap decisions on pharmaceutical policy under pressure from the impending visit of the Troika show that the government continues on the beaten track of its cash-collecting practices, pursuing the attainment of short-termist numerical targets.


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