Pharmaceutical firm Roche turns the screw on indebted hospitals

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.

EL PAÍS has been told that there are four centers in the Valencia region, two in Castilla-La Mancha, three in Castilla y León and three in Andalusia on Roche’s list.

On Monday, the company reacted to the revelation by stating that no hospital has been left without medical supplies. “The commercial conditions for several Spanish hospitals have been modified to prevent their debt from growing further and to be able to guarantee normal access to medicines.”

Meanwhile, other industry giants sought to distance themselves from Roche’s position. A spokesman from GSK said that when Roche’s director general, Severin Schwan, talked last September about cutting off supply to Greece and possibly Spain as well, “our company said it would keep up its supply out of a sense of responsibility and public health.”

Sanofi-Aventis, another industry giant, spoke in similar terms. “The debt situation is unsustainable,” yet the company has opted to “ensure patient treatment,” said a spokesperson. The company said it “trusts” in the central government’s plan to loan money to the regions so they can settle their debts.

The same message could be heard at Baxter — “We are not considering a similar measure[as Roche], we trust in the supplier payment plan” — and Bayer — “To us, it is essential that drugs reach the patients.” Neither Novartis, Sandoz, Merck nor Abbott would comment on the issue.

The Valencian health department confirmed that Roche is the only company to have changed its supply conditions. But that may be because Roche’s case is special, since it depends much more on hospital sales than other firms that work a lot more with pharmacies. Roche said that 80 percent of its turnover comes from hospitals and that it is owed 500 million euros. “We need these funds to carry out our research and supply activities, and to continue to meet our commitments to third parties,” said a spokesperson, adding that the decision to change the conditions was taken after months of negotiations. “The company needs to collect its money.”