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Datamonitor: Greece - pharmaceutical companies take a stand over pricing

10-03-2010 11:27 AM CET | Health & Medicine

Press release from: dynamic technologies Gmbh, Köln, Germany

Datamonitor: Greece - pharmaceutical companies take a stand

Following the publication of a new pricing bulletin which aims to cut healthcare costs in Greece, a significant proportion of pharmaceutical companies currently operating in the country have challenged the new prices. While there are many ways in which companies can beat the new pricing laws, the regulations may prove harmful to pharmaceutical company sales in Greece and, indeed, across Europe.

The battle continues to rage between pharmaceutical companies and the Greek government over what the industry sees as an unfair and unworkable pricing system brought about as a result of the sovereign debt crisis in Greece. Following the issuing of a pricing bulletin by the Greek government in September 2010, an average price reduction of 20% was seen for drugs covering 97% of Greek pharmaceutical expenditure. In response, some 50 companies have exercised their right to challenge the new prices issued for their products. The Greek government has stated that, to date, drug companies have only challenged up to a maximum of five product prices. GlaxoSmithKline, however, has stated that it is opposing the price cuts on approximately 30% of its products.

Many feel that the price cuts will have a knock-on effect on pharmaceutical sales across Europe, since Greece is used as a reference point for prices across numerous European countries. Pharmaceutical companies are also questioning the validity of the pricing data used by the government in making such pricing decisions. Furthermore, parallel trade out of Greece to other EU countries could grow as many payers choose to source products more cheaply from Greece.

To combat this, the Greek government has enacted a law to force wholesalers to prioritize the Greek market over exports. However, it is not clear if this and other assurances over the small scale of the existing export market will allay fears. According to industry reports, Greek consumers are already suffering drug shortages. Disputes between the pharmaceutical companies and the Greek government will undoubtedly lead to increased shortages, the delay or suspension of drug launches and the removal of high value products to the detriment of Greek patients.

In order to beat the new pricing regulations there are a number of tactics that pharmaceutical companies may pursue, including removing high value products from the market, developing deals directly with pharmacists (thus removing wholesalers from the process) and utilizing dual pricing systems. Nevertheless, given the pharmaceutical companies' response to the new prices, it is likely that the regulations will negatively impact upon drug sales in Europe.

Related research

Datamonitor: Benchmarking the Pharmaceutical Market by Drug Delivery to 2014:
http://www.markt-studie.de/studien/benchmarking-pharmaceutical-market-drug-delivery-2014-p-66413.html

Datamonitor: Pharma Pricing and Reimbursement Outlook: Optimizing price and market access in a recessionary climate:
http://www.markt-studie.de/studien/pharma-pricing-reimbursement-outlook-optimizing-price-market-access-recessionary-climate-p-69530.html

markt-studie.de, founded in 2002 has emerged as a leading online portal for market surveys and market research in German speaking areas. Four years later the English language portal reports-research.com was introduced due to the extraordinary success of the portal. Again one year later estudio-mercado.es - the Spanish spoken portal - was founded. The objective of the three portals is to competently and efficiently support consultants and decision makers in management, sales and marketing in the search for worldwide market research. Prospective buyers can look into more than 60,000 market surveys from more than 200 international publishers, current market data for more than 6,000 branches worldwide, 10,000 company profiles as well as a free-of-charge research and recommendation service for individual market research.

reports-research.com
c/o dynamic technologies GmbH
Siegburger Str. 233
50679 Köln
Germany

Manuel Bravo Sanchez (CEO)

info@reports-research.com
or
Tel ++49 (0)221 677 897 32
Fax ++49 (0)221 677 897 34

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