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Drugmakers say Greek unpaid bills add up to more than $1 billion

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(Bloomberg) — Drugmakers operating in Greece said they’re owed 1.05 billion euros ($1.2 billion) by the government for medicine supplied to hospitals and the state social insurance fund.

The unpaid bills have been accumulating since 2013, and no payments have been received since December, Natalia Toubanaki, a spokeswoman for the Hellenic Association of Pharmaceutical Companies, said in a phone interview. The association represents 65 such companies, most of them multinationals such as AstraZeneca P.L.C. (NYSE:AZN) and Pfizer Inc.

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Faced with mounting debts, the Greek health ministry has been pushing the drug industry for concessions. Drugmakers have already agreed to 140 million euros in rebates for this year, Toubanaki said. The government is in talks with the industry on a plan to claw back any amount of spending in 2015 that exceeds a cap of 2 billion euros, compared with the 2.3 billion euros drugmakers say is necessary to meet the needs of the population, she said.

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She declined to say which companies face the largest burden in unpaid bills and clawbacks, which together totaled 530 million euros last year.

“We need to make sure that the clawback is at the same level as 2014,” Toubanaki said. “The volume of medicines needs to be controlled.”

Health ministry press officials didn’t immediately reply to phone messages after normal business hours Monday.

Merck & Co. (NYSE:MRK) was owed at least $46 million from the Greek hospital and public sector as of the end of 2014, according to a filing. Pfizer had $10 million in bills to Greece at the end of March that had gone unpaid for more than a year.

Essential medicine

Amid the financial turmoil in Greece, drugmakers said they are making sure patients get essential medicine.

“Our Greek organization is in an ongoing dialogue with the health authorities and physicians in order to find sustainable solutions to ensure long-term supply of medicines,” Novo Nordisk A/S, the world’s biggest insulin maker, said in an e-mailed statement Monday. While the company supplies both diabetes and hemophilia medicines in Greece, it hasn’t faced issues with unpaid bills, said spokeswoman Katrine Rud von Sperling.

Bayer A.G., Germany’s biggest drugmaker, has about 200 to 300 employees in Greece working on local distribution activities. So far, the company has been able to continue supplying medicine in the country, spokesman Guenter Forneck said.

To boost the local economy, the health ministry has also proposed that multinational drugmakers manufacture some of their medicine in Greece, Toubanaki said. No legislation has yet been drafted, she said.

—With assistance from Doni Bloomfield in New York.


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