Greek price controls stifling access to drugs
Tuesday, June 1, 2010
More unsurprising calamity in Greece – drug companies are withdrawing their products after the government forced down prices in a bid to mitigate its financial crisis.
And it hardly takes a brain surgeon to understand how this happens. If prices are forced downwards, supply falls. There is less incentive to provide a product if you’re getting less money for it.
In other parts of the world, price controls have also been observed to cause shortages – leaving counterfeiters to take advantage of unmet demand. In India, one of the world’s counterfeiting hot-spots, price controls have regularly led to shortages and stock-outs, even with cheap generic products like vitamins.
Stefanos Combinos of the Greek government reportedly said that drug companies owed Greece their products, as a kind of obligation. In fact the situation is the opposite, as the government owes 5.6 billion Euros to drug companies, on top of the other gigantic debts that it’s lumbered on its people.
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