Medicine-yes, but monedas first

Austerity bites. Latest out of Spain, is that Roche actually wants to get paid for providing medicine. As the Spanish economy is continuing the fall into the abyss, companies are now adjusting to the fact many regional municipalities lack money. From El Pais.

The pharmaceutical giant Roche has decided to set a ceiling on the orders that 11 Spanish hospitals will be allowed to place until they settle at least part of their ballooning unpaid bills. One more center, the Hospital Provincial de Castellón, will have to pay the Swiss multinational, which manufactures many of the cancer treatments used in Spanish hospitals, for its orders in cash.

Farmaindustria, the pharmaceutical industry association, calculates that the outstanding debt on drugs ordered by hospitals was close to 6.4 billion euros in late 2011. A delay in payments from struggling regional governments is leaving public hospitals in the red, while pharmacies in some regions, such as Valencia, have gone on strike to protest the fact that the Generalitat also owes them millions of euros for subsidized drugs.

GlaxoSmithKline (GSK), Bayer and other major companies have said they are, for now, not planning to place similar credit limits or ask for cash payment from medical centers that are running significantly behind on their payments.

Sources at Roche confirmed that after payment has been delayed for more than 700 days, the company will halt supplies until the hospital or the public authority it depends on reduces its debt. In practice, this has meant that cancer treatments have been delayed for one or two days at medical centers in Cuenca and Xàtiva (Valencia), health industry sources said.

Full reading here.