By Ben Hirschler
LONDON (Reuters) - Cash-strapped Greece has racked up mounting debts with international drugmakers and now owes the industry more than 1.1 billion euros (1 billion pounds), a leading industry official said on Wednesday.
The rising unpaid bill reflects the growing struggle by the nearly bankrupt country to muster cash, and creates a dilemma for companies under moral pressure not to cut off supplies of life-saving medicines.
Richard Bergstrom, director general of the European Federation of Pharmaceutical Industries and Associations, told Reuters his members had not been paid by Greece since December 2014. They are owed money by both hospitals and state-run health insurer EOPYY.
Drugmakers and EU officials are now discussing options in the event Greece defaults on its debt or leaves the euro zone, disrupting imports of vital goods, including medicines.
"We have started a conversation in Brussels with the European Commission," Bergstrom said. "We want the Commission to know that our companies are in this for the long run and are committed to Greece."
There is a precedent for the pharmaceutical industry to agree exceptional supply measures during a financial crisis. It happened in Argentina in 2002, when some firms agreed to continue to supply drugs for a period without payment.
But the situation is complicated in Europe, given EU competition rules. They mean the Commission would need to take the initiative in approving any special scheme.
Drugmakers want any emergency programme to include steps to mitigate spillover effects on other markets, including curbs on re-exports of drugs and a block on other governments referencing Greek prices when setting their own drug prices.
Although Greece represents less than 1 percent of world drugs sales, it can have a bigger impact because of such reference pricing -- and the effect could be dramatic if it left the euro and prices in euro terms fell sharply.
Some drugs imported into Greece are already re-exported to other European countries under EU free-trade rules.
The drugs industry has been here before. Greece also ran up large debts for its medicines in 2010-12, although they have since been repaid, with some companies receiving payment in government bonds that were subsequently written down in value.
Simply turning off the supply is not an option for the industry, as Novo Nordisk (NOVOb.CO) discovered at the start of Greek debt crisis five years ago when it faced a storm of protest over plans to halt some insulin deliveries.
Greece imports nearly all its medicines. It has historically used a relatively high proportion of branded drugs, but the financial crisis has prompted greater uptake of cheaper generic products.