Greece: when the drugs run out | FT Alphaville

Greece: when the drugs run out

Beneath the political stasis — another sign of a sharp turn for the worse in Greece’s liquidity crisis.

The country’s pharmacies are owed €500m by the state-backed healthcare insurer, according to reports. From next week patients will have to stump up the cash for their medicines upfront, and then claim a reimbursement from the National Organization for Healthcare Provision (EOPYY).

It doesn’t take a genius to figure out that a) medicines tend to be very expensive, b) so paying for them may be very difficult for a lot of people, especially pensioners. And c) if the EOPYY is having trouble paying the pharmacists, it’s unlikely to find it any easier to reimburse individuals. Here’s a bit more from Kathimerini

The [pharmacists’] union, whose members are planning to hold demonstrations in Athens, Thessaloniki and other major cities next Wednesday, decided on the action to protest the organization’s failure to pay some 250 million euros in debts for prescriptions issued in March.

EOPYY and the social security funds that fall under its umbrella owe an additional 250 million euros to pharmacists from 2011.

In recent months pharmacies have promised to halt credit to patients unless they get paid, and the EOPYY has thrown some money their way. But its arrears are rapidly rising and clearly the pharmacists can only provide so much credit.

We recently wrote about the problems Greece’s power company is facing. Unless Greece receives eurozone loans soon in order to clear through arrears, this is the kind of issue that could see the state move towards a system of IOUs as it tries to keep the country running. The worsening situation on with the pharmacists reinforces that prospect.

Ironically enough, pharmaceutical arrears already caused the Greek government to issue strange, zero-coupon, discounted bonds to international suppliers in lieu of cash, back in the early days of the crisis. The pharma bonds even then were a little too close to quasi-money for comfort.

How do they get out of the arrears problem this time?

Additional reporting by Joseph Cotterill

Related links:
Greece: when the lights go out – FT Alphaville
Greeks urged to run poll as vote on euro – FT
Greece Debt Negotiator Wants Pressure Eased – WSJ