nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Sunday, May 30, 2010

Drug Price Cuts In Greece: 2nd Company Withdraws Products

The Danish company says Greece already owes them $300M for drugs already sold, and can't take a 25% cut.

Both companies who are making these moves have argued that the effect of allowing the price cut would not only force them to operate at a loss, but would also encourage other countries to "pile on."

I wrote yesterday about Novo Nordisk withdrawing it's insulin injector.  Today Leo Pharma has stopped sales to Greece for two of its products:  an anti-blood clotting agent and a psoriasis drug, according to BBC News (May 30).  Whether a solution is in the works or not appears unclear:
"Mr Combinos [director general of the economy ministry] said Greece had been under pressure from the IMF to make severe cuts and he anticipated that a compromise on a price reduction would be reached soon.  The Greek government has promised to repay 5.6bn euros that it owes to medical companies for hospital equipment and drugs.   But the Greek Association of Science and Health Providers has warned that there is little chance of an agreement and that the country's debt-plagued state hospitals face a supply embargo."
Nobody's commenting on whether there will be a domino effect on European drug companies.

Is there anything the US can learn from this?  Government-directed price cuts appear to be the culprit, but you can argue that the drug companies are "blackmailing" a debt-ridden country.

I hope we can avoid this kind of turmoil in the US, but I see no reason why it couldn't occur here.  The governor of Massachusetts has already attempted to cut prices that the health insurers can charge.  Maybe they can suck it up for now, as I posted back on April 8th, but the continuing pressure to drive down costs will eventually reach a threshold beyond which the companies can't go--reserves will be exhausted (reserves they are required by law to maintain).

Stand by for the roller coaster ride as the proverbial irresistible force meets the allegedly unmovable object.
Doc D

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