Multinationals to fight the State

After having been torn by several scandals over the past two years, the Romanian drug market is now experiencing another tense situation.
Although discreet about their relations with the State so far, the Romanian subsidiaries of the major drugmaking multinationals are about to slam the Health Ministry.
The reason? The State’s debts to the pharmaceutical companies are piling up. The drug market in Romania amounts to $550 million a year, while the debts of the healthcare system have reached $330 million and some companies still have bills as old as 2001 to collect.
Most affected by these delays are the companies registering the highest sales figures, namely the market leaders.
According to market sources, GlaxoSmithKline (GSK) Romania, a branch of the world’s second-largest drugmaker and leader of the Romanian market, has come to total $50-$60 million in receivables, accounting for bills yet unpaid by the system and therefore halted most of its deliveries of subsidised or free drugs to hospitals or drug storage facilities since the end of last year. GSK’s Romanian branch and the domestic drugmaker Europharm Brasov (65% controlled by GSK) jointly accounted for about 11.5% of the market last year, with sales reaching nearly $65 million. Which is close to the total debts the State has to pay them.
“The decision to put a lid on deliveries was due to the high level of debt accumulated by the healthcare system and implicitly by our company,” Ioana Enache, GSK Romania’s marketing and communication manager told Ziarul Financiar.
The GSK officials declined comment on the exact amount of debts but cared to specify the company kept filling the orders for AIDS drugs and treatment for terminal patients.
Market sources say other drugmaking multinationals could resort to the same measure unless the Health Ministry and the National Health Insurance House (CNAS) actually do something about it soon.