Greek financial crisis could give way to health crisis

The global media’s focus on the Greek debt crisis this past few weeks has understandably been about what this will mean for the financial system, investors, and members of the Eurozone, and by extension, the world economy.

But there’s another storyline that is starting to emerge as it becomes more apparent that there is no good way out of the crisis for the Greeks. The story is how a country rocked by creditors finally coming to collect could be entering a health crisis, too.

Ivana Kottasov at CNN wrote a piece defining the state of panic in the Greek health system, saying:

In fact, experts say the country's health care system is on the brink of collapse. Government health spending fell 25% between 2009 and 2012, after the country's 2010 bailout package capped such spending. Spending on drugs dropped by 32% since 2010. … With the country running out of cash, international organizations are warning that Greece could face medicine shortage within weeks.

Kottasov doesn’t spell out which experts and international organizations are making these claims, but you can find them if you hunt around.

Annalisa Merelli at Quartz, for example, wrote about how different voices in the Greek financial crisis discussion have come to different conclusions about what this all means for the health of people in the country. She wrote:

Cut loose from financial aid, the bills are piling up. Some of the more important unpaid invoices are for medicines, which accounted for 5.5% of the country’s imports in 2014. Foreign pharmaceutical companies are owed more than €1 billion ($1.1 billion) for supplies shipped in the first half of this year, according to the European Federation of Pharmaceutical Industries and Associations (EFPIA).

As Merelli noted, EFPIA director Richard Bergström wrote a letter to the European Commissioner for Health Vytenis Andriukaitis warning of two major problems that could come from Greece leaving the euro behind and returning to the Greek drachma. The first problem, he wrote, is that any instability in the financial infrastructure would have an outsized effect on the Greek pharmaceutical supply system, simply because of the complex nature of the system even in good times:

The Greek medicines supply chain is complicated compared with other European member states and therefore we think that the medicines supply chain may be particularly vulnerable to the sort of disruption described here. We believe, for example, that several hundred wholesalers are involved in the purchase and distribution of medicines to Greek pharmacies (a supply chain that is much more fragmented than in other EU countries.)

He also warned that companies might start buying drugs at a massive discount in Greece to sell outside of the country, exacerbating any drug shortages.

This way of doing business is called “parallel trade.” And not everyone is convinced that it’s even a real threat. The European Association of Euro-Pharmaceutical Companies represents companies engaged in parallel trade, and the group’s chief executive told Politico’s Peter O’Donnell that the claims about the euro crisis leading to drug shortages were “populist economics.”

“The fear of shortages due to parallel trade is rationally unfounded,” Richard Freudenberg said.

What can’t be denied is that Greece already is starting at a health deficit. The country consistently ranks at or near the top for cigarette consumption. It has some of the highest rates of childhood obesity in the world. And a 2013, a study showed that the drop in the country’s economic stability was being followed by a rise in heart attack rates.

It will be important to keep a close watch on this emerging story. Let’s not forget that the people who may end up suffering the most as a result of the Greek economic crisis aren’t the ones pulling the levers of power.

[Photo by Pat Guiney via Flickr.]