Portugal: Riding the Wave of Economic Reform - Pharmaceutical Executive


Portugal: Riding the Wave of Economic Reform

Pharmaceutical Executive

As a result, in 2006, for the first time in many years, the Portuguese health budget was respected. Nevertheless, the European Union expects the Portuguese public deficit to sink below 3% of its GDP by 2008. Given the complex nature of the task, that seems very unlikely.

Hospitals: Take a Number, Get in Line

Antonio Correira de Campos Minister of Health
While Correia de Campos has been trying to work his magic with the country's health system budget, public hospitals have accumulated a critical debt with the pharmaceutical manufacturers. At the end of 2004, it reached an estimated 977.6 million (US$1.3 billion), a 51.1% increase compared with 2003.

However, reports from October 2006 show that the debt has decreased to 712 million (US$935 million), of which "over 100 million (US$131 million) belongs to Roche," notes Adriano Treve, Roche's general director for Portugal. Since his return to the country in 2000, the company has managed to consolidate its leading position in the hospital market. "We know that the government will pay one day; the question is just when," he says. "It is a continuous negotiation effort to ensure we get paid. On the other hand, Roche is committed to provide a service to public health, and the current portfolio that we have, particularly in the area of oncology, is very important to the country."

The government is remodeling the business structure of its public hospitals to create a system of private management and is building new hospitals within the Public-Private Partnership (PPP) scheme. Treve, who previously worked in Portugal as a marketing manager, acknowledges the positive changes but also points out some limitations. "The hospitals' environments have definitely changed and are becoming more dynamic. I see more flexibility from the various stakeholders in the hospitals. However, there is one thing to bear in mind: Since 2001, Portugal has had four different governments, and every new government means changes to the health sector. A new prime minister usually will nominate a new health minister, who may change people in the important functions of the health administration."

Such concerns are also shared by James Hassard, general director of Amgen Portugal, the second-biggest hospital player in the country. "Amgen Portugal is almost 100% focused on the hospital sector; consequently, we are under a lot of pressure. In terms of invoice sales, Amgen Portugal is close to the US$50 million mark and is primarily focused in two areas: supportive care in oncology, and nephrology," he says.

Hospitals Take 300 Days to Settle Their Accounts

J. Miguel Noriega
Further complicating matters, hospitals are taking, on average, 300 days to settle their accounts; this situation led the Portuguese Pharmaceutical Association (Apifarma) to create a company just to take care of these debts, a "guarantee that especially the small companies would get their money. After strong negotiations with different ministers, health, economy and finance, we were able to collect 0.5 billion (US$657 million)," says Joao Gomes Esteves, chairman of the board of Apifarma. He continues, "Today, Apifarma is studying a mechanism which gives to the pharmaceutical industy at least the same rights which other suppliers have."

Although hospital reforms are underway, forging a commercial mind-set out of a civil servant culture is very challenging, particularly in Portugal, where the state employs 15% of the country's entire workforce.


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