The Multinational Monitor


G L O B A L   N E W S W A T C H

Greece Will Manufacture Essential Drugs

Six months into its term of office, Greece's Socialist government has announced sweeping policy changes in an area of vital concern to Greek consumers: the foreign--dominated pharmaceutical industry.

To bring on "a safe day for the consumer," says Julia Panourgia-Clones, the economic minister at Greece's Washington embassy, the government has decided to take specific actions.

First, it will institute a state pharmaceuticals board by summer to set a national prescription list, specify technical requirements for the manufacturing and importing of raw materials, insist on quality control, set prices, and limit advertising.

Second, the government of Andreas Papendreou will form by mid-1983 a national pharmaceutical industry, which will compete against private sector firms. "There will be public production," says PanourgiaClones, concentrating "on the basics" such as aspirin-related drugs and vitamins. "It won't be a public monopoly," however, she adds. "Once you have the basics guaranteed to be produced, and you can guarantee quality, you can have the competition."

Introducing a new variant of national production, the Socialist have invited local firms to join' in the public enterprise. The government will provide "raw materials and some guarantee of government contracts" to the firms that agree to participate, reported Scrip, the newsletter of the international pharmaceutical industry. In return, the local firms will cut back "on prices and promotion," Scrip noted.

Multinational pharmaceutical firms in Greece reacted with displeasure to the changes. "The industry is disturbed," says Jay Kingham, international specialist at the U.S. Pharmaceutical Manufacturers Association. "We can anticipate even greater discrimination against foreign drug products," Kingham predicts, and "greater difficulty in obtaining price increases."

"More than half" of the pharmaceutical industry in Greece "is controlled by foreign interests," says Ann Corro, Greece specialist at the U.S. Department of Commerce. "The U.S. share of the market is 23%," Corro adds, with Bristol-Myers holding 3.9%, About, Squibb, and Schering-Plough each having 2%, and Pfizer, Merck, Wyeth, and Upjohn all with more than 1% of the drug market.

The pharmaceutical companies in Greece have engaged in a number of questionable activities, said the government's health minister, Paraskevas Avgerinos, in a February speech announcing the government's new policies, which was reported in the Journal of Commerce.

The corporations have evaded taxes, drained Greece's foreign exchange reserves by transfer-pricing manipulations (under-reporting actual profits so as to pay less taxes), and bribed doctors and pharmacists with "gifts, free holidays, and straight kickbacks."

Avgerinos also attacked the pharmaceutical companies for their marketing and pricing practices, claiming that essential drugs such as antibiotics and vitamins had prices "at least four times higher than would be reasonable," under a regulated pharmaceutical industry.

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