The European research-based pharmaceutical industry has offered to set a ceiling on the amount the Greek government pays for outpatient prescription drugs this year, in return for a pledge to pay drugmakers what it already owes them.

The offer has come from the European Federation of Pharmaceutical Industries and Associations (EFPIA), which has written to the Greek ministers of health and finance, offering to set a 2.88 billion-euro ceiling on Greece's prescription drug spending for 2012, provided that the government pays off all outstanding debts to the industry - which have now reached more than 1.7 billion euros - and undertakes not to allow any further arrears to develop.

The industry group has said it will have a clawback system in place by the end of the month, under which any spending which exceeds the cap will be absorbed by its member companies.

EFPIA has already agreed similar pharmaceutical stability deals with Belgium, Ireland and Portugal, and such arrangements could also be offered to other nations, reports Reuters.

The industry group has also reportedly asked the government to ensure that any new price discounts agreed with its members are not replicated in other markets.

Last month, following a new round of price cuts on off-patent drugs, Greece immediately placed a temporary ban on all exports of medicines and urged European governments not to use the new lower levels as reference prices. The new price list contained "errors," the national organisation for medicines (EOF) told the governments. 

Greece hopes that the new price cuts will produce savings of around 300 million euros. The EOF has warned that it will be monitoring compliance with the export ban, and could introduce legal measures to enforce it, if necessary.

EFPIA estimates that around 25% of medicines imported into Greece are currently being re-exported by parallel traders to countries where they command much higher prices.

In March this year, Greece's parliament passed major new pharmaceutical cost-containment legislation which stated that overall drugs spending by the social insurance funds must not exceed 2.88 billion euros this year, and that drugmakers would be required to cover, each quarter, any overspending.

Then last month it was reported that the government was planning to drop the proposal to clawback any overspending from the companies. It had been strongly opposed by manufacturers, who had protested to the Council of State and warned that such a move would be "a step too far across the line and contrary to the rule of law."

"While the pharma companies are presenting this latest proposal as a concession, it was in effect forced on them" by the March legislation, says Ana Nicholls, a healthcare analyst at The Economist Intelligence Unit.

"Since then, however, the Greek government has also been trying to push through price cuts and discounts. These hurt pharma companies more, because they not only affect the Greek market but also feed through to other markets via reference pricing systems and re-exports," she says, adding: "the question therefore is whether, by agreeing to the cap, pharma companies can get any concessions in return."

* It was reported at the weekend that Merck KGaA has stopped supplying its cancer drug Erbitux (cetuximab) to Greek hospitals. Erbitux can still be obtained from pharmacies in Greece.