Novo Nordisk or the Greek Government, Who’s To Blame?

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Crystal Bowersox, a type 1 diabetic and this year’s American Idol runner-up, recently said in an interview that there were times when she had to beg for insulin because she couldn’t afford it.  Anyone who depends on insulin injections for survival knows that having to beg for insulin is like having to beg for air.  No one should be denied their life saving medication.  Not in America, and not any place else in the world, no matter how dire the financial situation.

When I read the news regarding Novo’s decision to stop selling its insulin products in Greece, following the Greek government’s decision to cut prices of all medicine by 25% as part of an attempt to follow EU demands on repairing the Greek economy, I was outraged.  I mean, how can anyone deny a diabetic his insulin supply?

But is Novo Nordisk really the villain here? Are they to blame for not wanting to “give away” their products?

A few years ago I was commuting weekly to Greece while working as an economist for a health insurance company.  I don’t consider myself an expert on Greek economy (far from it) but I did know how to do my job, and I think I did it well under extremely difficult circumstances.  The difficult circumstances I’m referring to are “working in Greece.” I have never seen such a corrupt and inefficient system.   Time and again on my trips to Athens I spoke to people and wondered how the Greek system functioned. Well… it didn’t. And now the EU is the one paying the price. Countries like Germany and France are going to spend their tax payers’ money bailing Greece out and saving it from bankruptcy.

After years of Greek governments running the Greek economy into the ground, and doing nothing to change a much flawed system, the Greek government is being forced to cut its budget and deficit. As part of this attempt they have decided to cut all costs of drugs by 25%.  [Note: I do not know all of the details of the cost-cutting endeavor. I am writing now only in reference to the issue of Novo Nordisk’s decision to pull its insulin pens off the Greek market.]

Cutting the cost of drugs may seem like a good idea but if I remember my economics lessons correctly, this is not how prices are determined. And it only seems fair that Novo Nordisk and other companies have the right to object to a one-sided decision regarding the price of their product.

Pharma companies have a more heightened responsibility towards their customers than other companies, but let’s not forget… they are in the drug business. They are not charities, but exist to make a profit. It’s the government that is responsible for the wellbeing of its citizens, not the pharmaceutical company (this is why I support a government run national health care system).

The Greek government has to make hard decisions and I don’t think passing the buck over to the drug companies is the way to go (not that they shouldn’t try and negotiate new better prices for overpriced drugs). I’m also not so sure the EU members had this in mind when they suggested the Greek government make some serious changes in its economy.

Of course this may all be part of a negotiation plan by both parties – the Greek government trying to reduce its spending by lowering prices and Novo sending a message that it won’t be ordered into lowering its prices.  Hopefully for each and every diabetic’s sake, a speedy compromise will be reached.

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Gee Vee
Gee Vee

You have the wrong question. It should read – should we support Novo Nordisk to be complicit in denying the right to life of innocent Greek citizens because we wish to place all the blame on the Greek depression on their government? Greece does not control her currency so they are prevented from devaluing it in order to stabilise their economy. They need Europe’s help to do this but Europe is refusing. There is a humanitarian crisis in Greece which is far more important than the financial struggles that Europe has. We have a duty as human citizens to keep… Read more »

Gee Vee
Gee Vee

Don’t forget – Germany’s world war 2 debt was forgiven by Greece and other nations, so Germany is in no position at all to be lecturing on people repaying debts. Each faulting bank during the global financial crisis receive a bailout package more than what the total bailout is for Greece. So let’s no longer vilify Greece. Greece does not control her currency so they are prevented from devaluing it in order to stabilise their economy. They need Europe’s help to do this but Europe is refusing. These draconian and ineffective austerity measures have proven time and again not to… Read more »

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