Greece’s new drug price regulations introduced this week will reduce prices by an average of 21.5%, with the aim of saving 1.9 billion euros annually, the government has announced.

The contents of the finally-introduced regulations differ from initial announcements from the Finance Ministry, which had stated that the price cuts would average 30% and apply to 1,551 medicines. However, the measure introduced this week will cover 12,500 products, 2,500 of which are originator products and the rest are generics, according to statements by the Ministry of Economy, Competition and Shipping reported by the business newspaper Naftemporiki.

The weighted average of the price reductions will be 21.5%, and this is expected to produce savings estimated at 1.9 billion euros a year, says the report. The price adjustments are as follows: - products whose wholesale price is no more than 1 euro will not be subject to price cuts; - for products with a wholesale price of 1.01–5 euros, the price will go down 3%; - the reduction for those whose wholesale price is 5.01–20 euros will be 20%; - those priced at 20–50 euros will be cut by 23%; - products with prices of 50–100 euros will be reduced by 25%; - and those priced at over 100 euros will be reduced by up to 27%.

Orphan drugs and medicines produced from blood products will be exempted from price cuts.

Commenting on the price cuts, IHS Global Insight pharmaceuticals analyst Brendan Melck forecasts that, given that many European countries set their maximum prices in relation to prices in other European Union (EU) countries, the new prices in Greece will bring down the reference price for drugs in other EU countries. He notes the government’s argument that, given Greece’s major economic crisis, it has no option other than to take such measures, and that officials also point out that the prices of many drugs in Greece are higher than in other EU countries.

However, pharmaceutical industry leaders in the country have warned that the regulations will result in drug shortages on the domestic market, including of some important medicines, as the marketing of certain products in Greece will no longer be viable economically.

“The impact of the regulations - both on the Greek pharma sector and the regional pharma sector as a whole - will become clearer in the coming months,” says Mr Melck.