In the wake of Novo Nordisk and LeoPharma’s announcement that a number of their medicines will no longer be sold in Greece, following the government’s decision to cut drug prices by 25%, analysts have been weighing up the implications of the Danish drugmakers’ move and the potential of similar actions from other pharmaceutical companies.

IHS Global Insight healthcare analyst Brendan Melck notes a report in the Financial Times which says that Merck KGaA has submitted an appeal against the price cuts to the Greek government, stating that they are “unjustifiable on any legal or scientific basis.” Also a spokesman for AstraZeneca is quoted by Reuters as saying that, like Merck, it does not plan to withdraw any products from Greece at this stage, although it questions the legality of the decision.

Mr Melck notes that considering the continued lack of repayment of the substantial debts owed by the Greek healthcare authorities to drugmakers, “there is unlikely to be a great deal of sympathy from the producers”. However, he says the actions of Novo and Leo “will doubtless be painted in terms of ‘putting profits before patients’ in certain spheres in Greece, however inaccurate this sentiment is”.

He adds that Leo has given the Greek government a notice period in which to reconsider the price cuts and this leaves open the possibility that some kind of compromise may be reached, something that is more likely if the Greek economy stabilises. Mr Melck adds that producers of medium-to-high priced drugs stand to lose the most from the Greek price cuts: the cost of reimbursed drugs costing between 1.01 and 5 euros per unit have been cut by 5%, while those priced between 5.01 and 20 euros per unit have been cut by 20%, with three further tiers of cuts, up to 27%.

Therefore, Mr Melck argues, it is to be expected that more producers of drugs in these categories will follow suit. As yet, he adds, no generics firms have voiced any intention to withdraw from the Greek market, despite the fact that their products are subject to an extra 10% reduction on top of the tiered price cut.