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EU annoyed that “poor Greece splurges on costly drugs” when new cuts in health sector under way

“Greece is addicted to expensive medicines, and three rounds of rehab have made only a small dent,” Politico.eu writes in an article with title “Poor Greece splurges on costly drugs, to Brussels’ annoyance” and subtitle “EU economic problem case shuns cheaper generics, partly to keep ubiquitous pharmacies afloat. That’s changing too slowly for Greek creditors’ taste.”

The article appears as a new round of austerity cuts in the health sector in underway. The latest reforms package passed by the Greek Parliament in June includes also further ‘reforms’ in the health sector. It looks as if the country’s European creditors want to put pressure for the use of more generics in Greece. However, new, that is innovative drugs are on-patent, with high prices and no generics alternative.

An excerpt from Politico’s “Poor Greece splurges on costly drugs“:

It’s a hard habit to kick: Greece for years lavished unusually high sums on the newest, most expensive drugs on the market. That led the European Commission to zero in on this, saying Athens would have to spend smarter to help cut its budget deficit. In the third bailout agreement between the European Commission and Greece, Brussels called on the Greek government to ensure that 60 percent of medicines are cheaper, copycat versions — so-called generics — by March 2018.

Only a quarter of medicines prescribed in Greece are generics, according to the European Commission, putting Greece at the bottom of the charts, ahead of Italy and Luxembourg but behind countries like Germany and the Netherlands, which have penetration rates of 81 percent and 71 percent for generics, respectively.

To usher the reforms through, the Greek government needs to face down opposition from powerful vested interests: pharmacies that make a killing from selling the more expensive original drugs and many specialist doctors who receive incentives from drugmakers to prescribe the latest name-brand medicines.

“Nobody else has ever implemented such heavy health care reforms in such a short amount of time,” said Nikos Maniadakis, a professor at the National School of Public Health in Greece. 

Athens will have to overcome resistance to reform from its domestic drugmakers and, perhaps most sensitive of all, a deep suspicion among Greek patients that generics are simply inferior.

“Greeks consider generics a second-class medicine due to a law in 2012 that said the poor people get generics,” said Pascal Apostolides, president of the Hellenic Association of Pharmaceutical Companies (SFEE), which represents multinational drugmakers in Greece.

Germans are three times as likely to get a generic drug as Greeks.

The country has been making some slow progress in response to the pressure from Brussels. Generics penetration has risen 10 percentage points since 2010 and the Commission broadly argues that it is “proud of the progress” in the Greek health care sector.

In need of reform

In 2010, when the financial crisis hit, Greece’s medical system was already idiosyncratic and dysfunctional.

On the one hand, it had the highest number of doctors per capita in the EU and pharmacies at every street corner. But the system was hardly functioning well: Patients paid almost 40 percent of health care costs from their own pockets.

Local vs global

The Greek government’s other big headache is its need to strike a balance between the international and the domestic pharmaceutical industry. While it is under pressure to support domestic champions, it also has to maintain good ties with the multinational companies that produce new drugs for illnesses such as hepatitis C.

Both sides of the industry blame each other for the low penetration of generics.

By law, generic medicines should cost a maximum of 65 percent of the price of original drug that has lost its patent, but the multinational companies’ lobby SFEE complains that some generics are still much more expensive than that. In fact, Greece has the most expensive average price for generics in the EU. That’s because the government doesn’t want to harm local pharma companies, which remain one of the few successful industries in the country, contributing almost €3 billion a year to its economy, according to two sources who would only speak on condition of anonymity. (full article Politico.eu)

What I miss in this long and actually good researched article by Politico is a critical reference about the powerful pharma industry lobby which is active in Brussels.

I also miss a reference about the 2012 reforms which heavily brought down the prices for prescription drugs and pushed for generics use. The reforms also implemented a throughout self-participation  by patients although without income criteria as the German advisers had proposed. This had the effect that many patients, especially older low-pensioners, could not afford their medication anymore.

On the other hand, as the economic crisis continued, austerity got tougher, incomes decreased further and work without insurance increased, neighborhood pharmacists started to sell prescription medication on credit. Without wanting to defend pharmacists, I have to add that the 2012 reforms also reduced the pharmacists’ profits.

At times, the multinational pharma industry in Greece and the wholesalers were blackmailing the pharmacists thus restricting drugs delivery. I remember in 2011 – if I’m not wrong- my brother would have to search across half of Athens and Piraeus in order to find a life-saving prescription medicine for our mother. The drug was not a rarity, just a common drug for a specific disease, at  54.5 euro commercial price. But it was almost impossible to find.

Not to mention the fact that many multinational drug producers located in Greece started to export the drugs because they would sell at better prices in countries like Germany. Drugs shortage appeared in the country.

The most striking example is that Aspirin disappeared from the Greek pharmacies.

The article claims that before the reforms “patients paid almost 40 percent of health care costs from their own pockets.” In Greek reality this is exactly the opposite: patients’ self-participation in proscription drugs, medical and lab tests, mergers of public health facilities, personnel shortage and austerity cuts in health sector indeed increased the cost paid by Greek patient’s pockets after the reforms. 

As for ‘corrupted’ doctors in Greece… well … that’s a global phenomenon and a general worldwide practice by the pharma industry.

Greece is more than just the cliche corruption. The pharma issue is complicated and more than just pharmacists making a killing profit and doctors prescribing expensive drugs because they get incentives by the industry.

One more important aspect is the drugs price setting mechanism for new drugs on-patent within the EU.

There are three basic components to the commercial price of medicines:

  1. The first component goes to the manufacturer (ex-factory price);
    The second component goes to the wholesaler for the delivery of medicines to pharmacies and hospitals;
    The third component goes to the pharmacist to cover their professional fee and mark-up.

The ex-factory price of medicines in Ireland, fro example, are linked with those in 14 other EU states – Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden and the UK.

The price charged by the patent holder of the new drug in a basket of nine other EU Member States: The basket is made up of  Belgium, Denmark, France, Germany(highest prices), the Netherlands, Spain (lowest prices), the UK, Finland and Austria.

In the measures voted in the Greek Parliament in June under pressure by the EU creditors, there is practically a ‘block‘ to the import of  ‘new drugs’, i.e. innovative drugs in the country. For budgetary reasons.

The measure has set especially cancer patients in despair.

see also Pharma embargo in Greece’s National Health Service (Sept 2012),  Shortages in drugs 2010-2016

PS my cat says, she suspects the generics lobby in Brussels wanting to set foot in Greece.

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7 comments

  1. Is is not obvious? The German Europe proceeds with the next stage of the genocide plans, i.e. the limitation of available drugs for sufferers. This will increase death rates and will empty the land at a faster pace.
    What more do we need to see to realise that they are killing us??????

  2. Everything in Greece is “complicated”, and everything complicated in Greece started some years ago in that dark region somewere between Brussels and Berlin, inhabited with people whose only purpose is to harm greeks. Oh, and don’t forget the ottomans. You have nationalism for all tastes, left and right.

  3. And the dark region between “Brussels and Berlin” has nothing to do with what keeps happening here for the last 8 years right? And the 340 billion owed to us by Germany exist in our imagination too. Perfect, this solves it all!

  4. Iannis, if they owe you, they must pay. And the EU and creditors made many mistakes and unreasonble demands. Lets fantasise for a moment, everything in this eigth years is others fault. Now, think about Greece eight years ago. What do you see, really? What have Greece done with the billions received from the EU? And even before that, with a long history? Before the foreign intervention you had a good health system? No corruption? No bureaucracy? A modern country, full of technology and decent infraestructures? You cultivate foreign enemies, has a gardener cultivates flowers: with persistance and care.

  5. Smert, I never said the country is/was perfect. Of course a country with no corruption, strong democracy and, above all, responsible citizens would not fall into what Greece fell in 2010. Greece has its own ghosts to bear too. For example, the Quislings in government and parliament (since 2009) have been Greeks, not German. The EU billions surely were not used properly. But equally, neither Portugal, nor Spain were/are saint states. Their banking problems were much bigger than those of Greece, yet they were treated totally differently. Spain, for example, saved its banks by direct funding from the ECB, something denied to Greece, for purely political reasons dictated by Germany.
    And last but not least. Which country has the most scandalous tax breaks system for ship owners? And which country is considered as being the largest money launderer in Europe? Surprise: the mighty all-efficient, all-moral Germany. Which bank is the most bankrupt bank in Europe and possibly the world? Surprise again: Deutsche Bank.
    Attacking selectively a small country (as Germany and France did in 2010) and trying to convert it into the single villain causing all of Eurozone’s ailments is not only unfair but immoral too. Look nowhere but Germany for your answers and for the causes of the future break up of the EU. Brexit would not have happened if Germany was not what it is. This vampire state is the sole cause of the Eurozone crisis and killer of the united Europe.

  6. Good analysis ktg. Worth adding too the unbelievable pressure by multinational pharma to close down / buy out greek pharmaceutical companies. And replace our individual pharmacies with their multinational chains. The dairy industry story all over again.

  7. Och, another EU troll, they never give up. The purported Instant Experts on Greece. Even when the cat is out of the bag for years now and nobody is fooled. Like this…..

    “What have Greece done with the billions received from the EU? ”

    Well my dear, they have obediently passed these sums through the Bank of Greece, as instructed by EU/ECB/IMF, and sent them back for the first years to the bankrupt northern banks of Germany, Netherland, France etc., and after those banks had their fill they cleverly “socialised” the loans by passing them on to the EU taxpayers, who must also now share the undeserved burden of servicing the private banks’ loss. And what are these “loans” used for? To pay interests on the biggest “loan” ever made to a nation state in order for that country to sacrifice itself for the bankrupt northern banks….a circle and circus.

    Yes, not so easy to follow for the intellectually challenged, but by now, after 9 years has become quite widely understood. But be my guest, keep on trolling…