Drug suppliers restrict deliveries to 22 state-run hospitals due to €792m debt

NEWS 11.03.2021 12:55
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Source: Pixabay (ilustracija)

Little more than a week since drug wholesalers had announced restricting supplies to state-run hospitals over ballooning debts, the number of hospitals with restricted supply increased from 15 to 22, they said on Thursday in a press release.

In early March, the debt hospitals owe for drugs had reached 6 billion kuna (€792 million) and continued to increase at a rate of 20 million kuna (€2.6 million) per day.

Despite repeated warnings over the past two months and the government’s response saying that negotiations on paying the debt would continue, no “significant” payments have been made yet, the wholesalers said in a press release.

“In slightly over a week, the number of hospitals where we were forced to activate protective mechanisms for the delivery of medicines and medical supplies has jumped from 15 to 22. This is a 30 percent increase, and nearly every day a new hospital which doesn’t meet its obligations regularly joins that list,” the head of the coordinating body of drug wholesalers with the national employers’ association, Diana Percac, said.

“If this continues, in a short period of time most hospitals around the country, which do not make their payments within the prescribed 60-day deadline, could have their drug and medical supplies restricted,” Percac warned.

Some hospitals have stopped making any payments over the past two months, many have covered only 10 percent of their debt. Meanwhile, and the public health system’s deadline for payments to pharmacies now exceeds 150 days.

Although late payment for drugs is a chronic problem plaguing every government for decades, the wholesalers said that the situation has never been this worse, causing disruption along the entire supply chain.

“The situation has never been worse – hospitals have stopped paying, the (public health fund) HZZO has stopped paying, drug wholesalers have stopped delivering, and suppliers have stopped delivering to drug wholesalers, which are now slowly running out of medicines. The system is unsustainable, and wholesalers will therefore be forced to restrict conditions for delivering medical supplies,” Percac said.

On the other hand, wholesale companies have to pay all taxes regularly and within the legally proscribed deadlines, because otherwise the government, which now owes them more than 6 billion kuna (€792 million) would automatically launch seizures to pay for their debts.

Since the country’s entire 2021 budget is 147.3 billion kuna (€19.5 billion) the outstanding debt for drugs is equivalent to 4.07 percent of the budget.

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