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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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December 7, 2012

Pharmaceutical Shortages in Greece

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Posted by Derek

If you'd like to see how thoroughly a drug market can be screwed up, have a look at Greece. They're leading the way here as well:

Ten years after entering the eurozone, Greece is faced with the herculean challenge of persuading pharmaceutical companies to strike a bargain and lower the cost of the medicines they sell in the country. At present, there are fears of drug shortages in certain hospitals as a result of unpaid bills. . .During the last two decades Greece became a paradise for branded-drug producers, with generic medicines constituting only 12% of the drugs consumed in the country. Between 1997 and 2007, the amount of health spending per Greek citizen grew annually by 6.6%, bringing the country to fourth place worldwide, after South Korea, Turkey and Ireland, in terms of this growth.

The crisis comes, in part, as a result of the Greek National Health System racking up debts by treating pensioners and poorer locals with expensive branded drugs instead of generics. The government paid the pharmaceuticals mostly with state bonds that lost substantial value in the fiscal crisis, and, in response, they started turning off the faucet. . .

But there's another factor at work, too:

For many months, pharmacies have been reporting shortages of medicines as some distributors have reexported comparatively cheap drugs from Greece over to Germany and other European markets, achieving monetary gains of as much as 600%.

Yep, Greece has simultaneously managed to pay too much for pharmaceuticals and provide a lucrative opportunity to export cheap ones. If economics worked like electrical engineering, there would be huge sparks jumping across these gaps and things would be shorting out all over the place. Actually, that's pretty much what's happening as it is.

Comments (7) + TrackBacks (0) | Category: Drug Prices


1. NorthwesternChemist on December 7, 2012 11:22 AM writes...

Gee, universal health care isn't so "universal" after all?

Permalink to Comment

2. emjeff on December 7, 2012 3:53 PM writes...

If we cave and give them steep discounts, I will lose whatever little respect I have for pharma CEOs. "Not one red cent back" would be my response. If you want our medicines, then pay- we have been handing out discounts to these failures for too long. I have to eat too, you know...

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3. ano on December 7, 2012 6:37 PM writes...

@2, emjeff

you need to eat, Pfizer execs need helicopters cause they find Manhattan traffic insufferable...

We all got needs. Greeks deservedly are a laughingstock for screwing up their country, but I'd argue that a CML patient's in Athens need for Gleevec is greater than the "need" for helos in NYC. And seeing as you have disposable income for an internet connection, I doubt that you are starving. Perspective, man.

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4. metaphysician on December 8, 2012 10:00 AM writes...


Greece would be able to afford medicine just fine if it had actually operated itself in a non-corrupt and economically unsustainable manner. This is more analogous to someone shooting themselves in the foot and then demanding that you fix their foot for them.

The CML patient may need Gleevec, but the reason they can't get it is because of Greek governmental and social dysfunction, not ebul pharma companies. Blame them.

( and if your spectrum defines that once one is not-starving, they now have an obligation to destroy themselves to help people in another country that has yet to demonstrate an ability to provide good faith? You are either disingenuous or a fool. )

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5. Hibob on December 8, 2012 12:11 PM writes...

#4 -

This is more analogous to someone shooting their kids' foot and then demanding that you fix their kid's foot for them. As you said the government of Greece doesn't need Gleevec - its citizens do.

Perhaps the solution for the expensive drugs is to continue to have a discount for Greece but discontinue sales in bulk. Doctor prescribes Gleevec, hospital sends the prescription to Switzerland/Novartis for it to be filled. A bit of a headache all around but people would still get their therapy and the Swiss would make nice work of any "entrepeneurs" in the supply chain.

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6. sepisp on December 10, 2012 6:04 AM writes...

Everyone's ignoring the point here: generics vs. brand name drugs. In fact the U.S. added Finland to some sort of a terrorist watchlist, because the parliament unanimously decided that the government's health insurance institution will pay the cost only up to the cost of a corresponding generic. This is just common sense; the fact that Finland did so in a good economic situation illustrates why Finland has the AAA rating on its sovereign debt. It seems that Greece is now forced to do the same, because it has to.

... which brings up the question: does the U.S. punish U.S. companies engaged in corruption overseas?

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7. Design Monkey on December 12, 2012 2:43 PM writes...

Greece actually is Enron, blown up to a size of whole country.

Bulldozing it over and building anew would be cheaper, than trying to "save" it.

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