The debt accumulated in Europe is extraordinary. First we have the revelations that Spain owes about €30 billion in overdue bills for rubbish collection and other services for municipalities, and that debt levels in bailed-out countries like Greece, Portugal and Ireland continued to rise in the third quarter of last year with Greece's debt level the highest, spiking to 159.1 per cent of gross domestic product. Italy managed to bring its debt down to 119.6 percent from 121.2 percent the previous quarter. But at €1.88 trillion, Italy's debt is enormous.
So what do we make then of the report from Switzerland that Portugal, Italy, Greece And Spain owe $20 billion to big drug companies? "As austerity measures across Europe lead to healthcare spending cuts, hospitals in Portugal, Italy, Greece and Spain are delaying paying for drugs by up to three years. Swiss pharmaceutical giants Roche and Novartis are examining whether to limit supplies to some of the worst culprits."
In Spain, there are several hospitals that have not paid their bills for up to three years. Roche is evaluating a change to its commercial policy for the worst paying hospitals. This would mean setting a credit limit per hospital. And if the hospital failed to pay its debts because of government budget cutbacks? Bad luck. Drugs would only be delivered if the credit limit were not exceeded. Roche last year reduced the supply of certain medicines to Greek hospitals. Novartis is also examining whether to make similar changes.
And with the austerity regimes and budget cutbacks, it's going to get worse. There will be a lot more unpaid bills for Big Pharma which will stop supplying drugs to hospitals in Greece, Spain, Italy and Portugal.
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