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Greek pharmaceuticals reform may undermine industry

Friday, February 26, 2016

Subject

The risks of liberalising the pharmaceuticals market.

Significance

Dissatisfaction with pension reforms together with the political mobilisation of agricultural workers is diverting public attention from the issues faced by the pharmaceutical sector. Liberalisation is meant to benefit consumers, making medicine more affordable at a time of economic crisis and a deteriorating public health system. However, industry representatives argue that Greek pharmaceutical companies' imminent decline in profitability will drive at least some of them out of business.

Impacts

  • Greek medicines will be substituted by more expensive European equivalents or cheaper, lower-quality imports from the developing world.
  • Reduced margins will further restrict the industry's R&D potential.
  • Lower medicine prices in Greece will suppress price levels in European countries that employ reference-based price-setting mechanisms.
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