STOCK MARKET WATCH - Wednesday, 11 January 2012

[Demeter]

51. Greek Crisis Dries Up Drug Supply as Even Aspirin Can’t Be Found

http://www.businessweek.com/news/2012-01-11/greek-crisis-dries-up-drug-supply-as-even-aspirin-can-t-be-found.html

Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi’s blood-thinner Clexane and GlaxoSmithKline Plc’s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists’ computer screens, meaning the products aren’t in stock or that pharmacists can’t order as many units as they need. “When we see red, we want to cry,” Mavrou said. “The situation is worsening day by day.”

The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the country’s 500 most-used medicines. Even when drugs are available, pharmacists often must foot the bill up front, or patients simply do without....The reasons for the shortages are complex. One major cause is the Greek government, which sets prices for medicines. As part of an effort to cut its own costs, Greece has mandated lower drug prices in the past year. That has fed a secondary market, drug manufacturers contend, as wholesalers sell their shipments outside the country at higher prices than they can get within Greece.

Strained government finances only make matters worse. Wholesalers and pharmacists say the system suffers from a lack of liquidity, as public insurers delay payments to pharmacies, which in turn can’t pay suppliers on time. “Wholesalers simply do not have the money anymore to play bank to the pharmacies,” Heinz Kobelt, secretary general of the European Association of Euro-Pharmaceutical Companies, said in a telephone interview.

Public insurers owe pharmacists some 330 million euros ($422.1 million) for drugs bought since April, Dimitris Karageorgiou, vice-chairman of the pharmacists’ association, said in an interview last month. Payment can take three months to up to a year, pharmacists said. Some are turning to patients to pay up front...