Greece has announced that it is slashing the prices of 1,551 medicines by an average of 30%, and the drug price commission is to take steps this week to adjust price lists and ensure the cuts reach consumers.

The Greek pharmaceuticals market was formerly one of the most dynamic in Central and Eastern Europe, with drug spending there having soared an estimated 64% in local currency terms during 2005-9 to reach a total of 6.24 billion euros last year. However, with the government’s introduction of fierce drug pricing and reimbursement policies aimed at tackling the country’s massive debt crisis, market growth is expected to drop to only 1.5% this year and to total just 3.71% during the period to 2014, when the market will reach a value of 7.49 billion euros, says a recent report from Companies and Markets.

The study warns of the implications for drugmakers as the PASOK (Panhellenic Socialist Movement) government led by Prime Minister George Papandreou puts in place measures aimed at bringing Greek drug prices into line with those of its neighbours in the region such as Romania and Bulgaria - given that the former currently spends $528.30 per capita annually on health and the latter spends $489.80, compared to Greece’s per person annual spend of $3,092.

However, it adds that the fiscal crisis has also exposed the “deep culture” of corruption in the health care sector, which includes hospitals massively over-ordering on some pharmaceuticals and widespread failure to use proper accounting. Following last October’s election, Mr Papandreou’s incoming government found that the previous centre-right New Democratic (ND) government, led by Kostas Karamanlis, had understated the money owed by public hospitals to medical suppliers by more than 5 billion euros. Last December, the European Federation of Pharmaceutical Industries and Associations (EFPIA) lodged a formal complaint with the European Commission about the outstanding debts owed to its members by the Greek authorities, which by the middle of the year had reportedly reached 6.5 billion euros.

Greece’s hospitals are the most corrupted sector of the nation’s public services, and demands for bribes prevents some patients from getting the treatment they need, critics have claimed. The anti-corruption watchdog Transparency International (TI) estimate that over 13% of the Greek population resorted to bribery in 2008, with most of the $1 billion-plus spent on bribes going to hospitals, followed by tax offices and urban planning departments. The average size of individual bribes are 1,355 euros in the public sector and 1,671 euros in the private sector, it adds. __

Last Friday, discussing progress in Greece’s applications for fiscal aid from the International Monetary Fund (IMF) and the European Union (EU), Mr Papandreou told parliament that his government “will mercilessly strike against waste, corruption and speculation in the health sector” but will maintain healthcare spending.