The Greek Government is planning to cut the clawback imposed on pharmaceutical costs to 6 million euros in 2020, down from 528 million euros in 2010 when the measure was first introduced.

The clawback, which is essentially a tax imposed on pharmaceutical companies for selling their products in Greece, has prompted several pharmaceutical companies to withdraw from the Greek market in recent years due to financial losses.

What is Clawback and Why is it Controversial?

Clawback is a tax imposed on pharmaceutical companies for selling their products in Greece.

The tax is calculated based on the difference between the prices that pharmaceutical companies charge in Greece and the indexed prices of their products in 22 other European Union countries. This means that if a pharmaceutical company charges more for a drug in Greece than it does in other EU countries, it has to pay a percentage of the difference to the Greek government as tax.

The clawback was introduced in Greece as part of a series of austerity measures in response to the country’s economic crisis in 2010.

At the time, Greece was facing a severe budget deficit and was under pressure from international lenders to reduce its public spending. The clawback was seen as a way to reduce the government’s expenditure on pharmaceuticals, which was one of the largest items in its healthcare budget.

However, the clawback has been controversial from the start. Pharmaceutical companies argue that it is unfair because it only applies to their products, while other healthcare providers, such as hospitals and doctors, are not subject to similar taxes.

They also argue that the clawback is arbitrary and unpredictable, making it difficult for them to plan their operations in Greece.

Impact of Clawback on Pharmaceutical Companies

Since the introduction of the clawback in 2010, many pharmaceutical companies have withdrawn from the Greek market due to financial losses.

The tax has had a significant impact on their profitability because it reduces the prices they can charge for their products in Greece. This has made it difficult for them to maintain their operations in the country, especially as the Greek economy has continued to struggle in recent years.

For example, Novartis, which is one of the largest pharmaceutical companies in the world, announced in 2015 that it was withdrawing its oncology products from the Greek market due to the impact of the clawback.

The company said that the tax had reduced its revenues in Greece by 90% in just four years, making it impossible for it to continue operating in the country.

Government Plans to Reduce Clawback

In response to the concerns raised by the pharmaceutical industry, the Greek government has announced plans to reduce the clawback to 6 million euros in 2020, down from 528 million euros in 2010.

The government has also said that it will introduce changes to the way the clawback is calculated, in order to make it more predictable and transparent for pharmaceutical companies.

The reduction in the clawback is part of a broader package of healthcare reforms that the government is planning to implement in the coming years.

The reforms are aimed at improving the quality of healthcare in Greece, while also reducing the cost to the government.

Reaction from Pharmaceutical Industry

The pharmaceutical industry has cautiously welcomed the government’s plans to reduce the clawback, but has called for further reforms to be introduced.

In particular, it has asked for the government to introduce measures to reduce the administrative burden on pharmaceutical companies, which it says is excessive in Greece.

Pharmaceutical companies have also called for the government to introduce measures to increase transparency in the pricing of drugs in Greece.

They argue that the current system is opaque and makes it difficult for them to plan their operations in the country.

Conclusion

The Greek government’s plans to reduce the clawback imposed on pharmaceutical companies to 6 million euros in 2020, down from 528 million euros in 2010, is a positive development for the industry.

However, further reforms are necessary to improve the transparency and predictability of the clawback system, and to reduce the administrative burden on pharmaceutical companies operating in Greece. If these reforms are implemented successfully, it could help to attract more pharmaceutical companies to the Greek market, and improve the quality of healthcare in the country.