The pain in Spain

Spain coughs up billions to keep regions in medicine

By Clare Kane

MADRID, June 8 | Fri Jun 8, 2012 1:56pm EDT

(Reuters) - Spain finalised plans to pay off the healthcare debts of its regions on Friday as some pharmacists closed their doors in protest over unpaid bills in the country, where drugmaker Roche has tightened credit to several hospitals.

Deputy Prime Minister Soraya Saenz de Santamaria said the government would pay 17 billion euros ($21.19 billion) to suppliers of its autonomous communities. Spain's Health Ministry said 73 percent of that money would be for unpaid healthcare bills.

"The pharmaceutical industry sees the plan as very positive, because it solves a problem that was threatening the survival of companies and the functioning of the national health service in normal conditions," said a spokeswoman for Farmaindustria, which represents drug companies in Spain.

The plan, first outlined in February, earmarked a total of 35 billion euros not only for autonomous regions but also local councils.

Around 40 percent of the total figure will pay healthcare bills and Saenz de Santamaria said the government had already paid over 9 billion euros of unpaid bills for Spain's local councils.

Paying off the regions' debts should guarantee the supply of medicine in the recession-hit country, where Switzerland's Roche recently tightened credit conditions at 12 hospitals, meaning they must pay off some of their outstanding debts to receive more supplies.

Spain's 17 autonomous regions account for around 50 percent of public spending and missed their deficit targets by a wide margin last year.

Spain's Health Ministry said the regions' healthcare debts are more than the 12 billion euros the government will pay off, but participating in the plan is optional. Saenz de Santamaria said three of the regions had not asked for funds.

In troubled euro zone peer Greece, parts of the healthcare system have already experienced drug shortages and international drugmakers are working with European authorities on plans to keep drugs coming into the country in the event of it leaving the euro zone.

Pharmacists in the autonomous community of Valencia, on Spain's eastern coast, closed for the second consecutive day on Friday, protesting that the government had not paid for any drugs given out in the region since February.

Pharmacies are not included in the central government's payment plan.

But the initiative has cheered drugmakers facing debts that have not been paid off for years in some cases.

Roche spokeswoman Silvia Dobry said: "There are several hospitals that have not paid their bills for more than two years. In Spain we started to insist on our credit terms in 2011 and this now applies to 12 hospitals in 4 of Spain's 17 regions."

http://www.reuters.com/article/2012/06/08/spain-government-pharmaceuticals-idUSL5E8H86U020120608?rpc=401