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Biotest threatens exit from Greek pharma market

Comments from German pharma company over unpaid bills come days after elections in Greece

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German pharma company Biotest has said it plans to stop shipping medicines to Greece next month because it is facing a growing number of unpaid bills, according to the company's chief financial officer Michael Ramroth.

In an interview with Boersen-Zeitung newspaper, Ramroth said that Biotest had warned the Greek ministry of health in April, 2012, that it would exit the market within three months if no payments were made on outstanding invoices.

At present Biotest has unpaid invoices of around €7m, which represent its entire business in Greece during 2011, he said.

Biotest is a fairly small player in the Greek market, but the warning has raised concerns that other drugmakers may follow its lead, leading to worsening medicine shortages in Greece and potentially other countries affected by the Eurozone financial crisis.

Last month, for example, Roche suspended sales of some drugs to Spain and Portugal after hospitals fell behind on payments, having already taken a similar decision in Greece last year.

In addition, Eli Lilly complained in February that Spain and Italy were delaying payments, suggesting this could have a material impact on its 2012 financial results.

Earlier this year, the Hellenic Association of Pharmaceutical Companies said that rising levels of debt at Greek hospitals could lead to medicine shortages and drive some domestic pharma companies out of business.

At the time it said that state-run hospitals had run up debts of around €500m - equivalent to more than a year's worth of drug supply.

Several big pharma companies drew up an emergency plan last month in a bid to keep critical medicines flowing into the country, given that Greece is almost entirely reliant on imported drugs, according to Reuters.

Meanwhile, talks continue on the formation of a coalition in Greece in the wake of last weekend's election, with all eyes on the shape of the new government, and particularly its stance on the austerity measures demanded by the EU in return for its bailout of the country's economy.

Greece received €110bn in 2010 and €130bn in 2011 in international bailout funding, on the proviso that it implements sweeping reforms on wages, pensions, state spending, tax collection and labour laws and cuts its debt burden.

19th June 2012


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