Wednesday

18th Oct 2017

Drug supplies to EU crisis countries at risk, warn health analysts

  • Drug speculation threatens supplies, says GlobalData (Photo: Derek K. Miller)

Speculators are threatening the supply of medication to countries worst hit by the sovereign debt crisis, according to research by business analysts GlobalData.

GlobalData's report, published Wednesday (22 August) claimed that pharmacies in Greece and other South Mediterranean countries had cut drug prices in a bid to enable people to pay for their medicines.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

But theprice-cuts had led to speculators and wholesalers buying up medicines at knock-down prices in one member state and selling them in another.

GlobalData analyst Michael Leibfried, who asserted that drug companies in Europe were facing "renewed pricing pressure from all directions", described the practice as a "lucrative export carry trade" that was "shrinking prices in other countries due to reference pricing." The practice also threatens the supply of medicines to the EU's crisis-hit countries.

Although OECD figures suggest that European governments are still allocating 8-12% of public spending to healthcare, austerity budgets have already seen attempts by governments to cut back on drug bills, even in more prosperous countries.

Following the lead of the UK's National Institute for Clinical Excellence (Nice), which controls drug purchases for the NHS, the German government last year adopted legislation requiring drug companies to prove the price benefits of new medicines, in a move aimed at tightening costs for new medicines.

Under EU law national governments are solely responsible for negotiating drug prices with companies. However, GSK boss Andrew Witty, who also leads the European Federation of Pharmaceutical Industries and Associations (EFPIA), wants EU countries to agree to exclude bail-out countries from price referencing.

Last month the lobby group asked the EU commission to impose a temporary ban on drug re-exports, although this would breach internal market rules on the free movement of goods and services.

The EFPIA insists that drug companies made discounts and price-cuts worth €7 billion in 2010 and 2011 in the five countries Greece, Ireland, Italy, Portugal and Spain, accounting for 8 percent of the industry's turnover. They were also risking further multi-billion euro losses by making emergency plans to supply drugs to Greece, and other countries, in the event of them being forced out of the eurozone, Witty said.

Pharmaceutical giants are concerned that lower drug prices in crisis-hit countries are being used for benchmark pricing of drugs. Most member states base their medicine purchase prices on average prices across the EU.

Critics claim that the reference pricing scheme prevents companies charging over the odds for new drugs.

Meanwhile, drug giants also have fears about whether governments can pay their bills. In July, Swiss company Roche claimed that the five crisis euro countries owed €1.2 billion to settle unpaid drug bills. Figures collected by pharmaceuticals indicated that only 1 percent of drug sales to the Greek government had been paid for in the first three months of 2012.

IMF worried by social cost of Greek austerity

The Greek economy and its people are reaching the "limit" of what they can endure in terms of austerity cuts, a senior IMF official has said in unusually political remarks.

EU drugs regulator accused of being too cozy with Big Pharma

The European Parliament has refused to sign off on the accounts of the EU agency responsible for making sure all medicines in Europe are safe and effective for its citizens to use, accusing the body of being too close to Big Pharma.

Analysis

Obesity linked to agricultural policy, new studies say

The number of obese children and adolescents worldwide has risen tenfold in the past four decades, according to the WHO. Health campaigners are pushing for a radical rethink of the EU's common agricultural policy to help tackle the obesity epidemic.

News in Brief

  1. Spanish Court declares Catalan referendum law void
  2. EU to keep 'Dieselgate' letter secret
  3. No deal yet on Mediterranean alliance for EU agencies
  4. EU Commission condemns Maltese journalist's murder
  5. Poland denies wrongdoing over forest logging
  6. Risk to asylum kids in EU increasing, says charity
  7. Schroeder warns of Turkey and Russia drifting towards China
  8. EU parliament wants equal pay for posted workers

Stakeholders' Highlights

  1. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  2. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  3. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  4. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  5. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  6. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  7. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  8. CECEE-Privacy Regulation – Hands off M2M Communication!
  9. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  10. EU2017EEEHealth: A Tool for More Equal Health
  11. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  12. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year

Latest News

  1. EU rejects UK claim it's slowing Brexit talks
  2. Nepal troops arrive in Libya to guard UN refugee agency
  3. Is Banking Authority HQ the Brexit 'booby prize'?
  4. EU-Russia trade bouncing back - despite sanctions
  5. No sign of Brexit speed-up after May-Juncker dinner
  6. EU defence strategy 'outsourced' to arms industry
  7. EU privacy rules tilt to industry, NGO says
  8. Malta in shock after car bomb kills crusading journalist