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On PIGS on Drugs
An interesting article in the Swiss press this morning regarding the big Swiss drug companies, Roche and Novartis.
Apparently the PIGS are not paying their drug bills. The numbers are big. The bills have been unpaid for years. Some excerpts from the article:
Hospitals in Portugal, Italy, Greece and Spain are delaying paying for drugs by up to three years.
Three years??
According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), European states owe €12-15 billion (SFr14.4-18 billion) to the pharma industry, which includes groups like Roche and Novartis.
$20 billion of unpaid drug bills??
A number of public hospitals and state insurance schemes are close to bankruptcy. But before being unable to pay staff salaries they stop paying suppliers,” Ignazio Cassis, vice-president of the Swiss Medical Association.
Hospitals and state managed health insurers are bankrupt?? This came as a bit of a shocker to me:
The number of unpaid bills from Spain, Portugal and Italy increased last year, while those from Greece fell as a result of ‘zero coupon bonds’ issued by Athens, Roche spokeswoman Claudia Schmitt said.
WHAT?? Greece is issuing zero coupon bonds? Bonds, not trade payable debt? To pay for drugs? How many zero coupon bonds has Greece issued? What are the terms for these bonds?
This whole story blows me away. I’m not surprised that the bankrupt PIGS are late payers. But three-years? That's ridiculous. If the PIGS are stiffing drug companies, who else are they stiffing? Are they paying for the oil they use? Food? How big are these trade IOUs?
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Nearly every day we get some story about the progress being made to address the financial ills of the weak European countries. Last week it was the phony Greek restructuring deal (it won’t happen). This weekend the talk is for Trillions of dollars from the IMF. Complete rubbish. The USA has said it will not put up a dime, so there is no IMF option.
You have guys like Tim Geithner saying silly stuff like this over the weekend:
"I hope that we're going to see, and I expect we will see continued efforts by the Europeans ... to put in place a stronger, more credible firewall."
"Firewalls" indeed. Tim boy is worried about the sovereign bonds issued by the PIGS. He knows that if the Sov. bonds go tapioca, the lights will go off in the USA. But the reality is that the problem has extended far beyond bonds; the PIGS are not paying trade creditors. Timmy is just making noise about ring fencing debt.
Where does this go? Can the drug companies keep up the charade? If one of the big pharmas breaks, and says, “No more IOUs, we want cash”, then they all will. At that point, things come apart very quickly. From the article:
Swiss pharmaceutical giants Roche and Novartis are examining whether to limit supplies.
This is a very sensitive issue. If the drug companies cut supplies, there will be hell to pay. These companies do not want to take a public position on this issue, they could become a target by demonstrators in the PIGS. The Swiss druggies avoid the publicity problem by having their trade group SMA, do the talking for them. I thought there was a very blunt tone to these words:
Pharma companies are private. In a liberal, democratic society respect for private property is a fundamental value. Private firms are the only ones able to weigh the pros and cons of stopping the supply of certain medicines.
Really? The drug companies are the only ones with a vote? Wanna bet?
If the drug companies do limit supplies, there will be consequences. The question of whether or not the PIGS are, in fact, liberal democratic societies, will be put to the test. In the process, I wouldn’t be surprised if the issue of whether the drug makers are public or private is also tested.
Note #1
I was part of the problem (and part of the solution) for the Latin American debt crisis of the 80’s. I had a front row seat with each central bank as they went bust. Every effort was made to kick the financial can down the road. In the end, it all blew up.
For every country, the death march was the same. When big trade creditors finally balked, and said, “No mas IOU”, debt default followed within weeks.
Note #2
Novartis and Roche have the PIG “trade receivables” and those Greek “Zeros” on the books at 100% of par. The other global drug companies who are sitting on the rest of the $20b of IOUs have it booked the same. These debts are not worth par. One day these drug companies will have to write them off. I do wonder what other big EU companies are sitting on chunky IOU’s from PIGS. None of this is “money good”. Novartis had this to say:
Deteriorating credit and economic conditions and other factors in these countries may require us to re-evaluate the collectability of these receivables in future periods.
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Bruce, good tour of the tip of the iceberg situation. I suppose the governments can support the drug supply needs of the citizens but how long will a worthless bond be doable? At what point do the raw material suppliers of the drug companies shut off the supply or drive it dramatically up to compensate for the short payments of others?
As inflation goes parabolic up, how are affordable drugs supplied both in terms of pricing and not being paid going to be provided? This makes the food supply a Bold future headline--- a year maybe?
AS we all become jaded to the awful news 24/7 it sometimes requires a different picture or look to bring the thing into focus.
And that Mr. Bruce is what you do well. Appreciate it.
In a SHTF scenario, having a nice big stash of pharmaceuticals is a VERY GOOD idea. Having medicines and medical supplies complements very well the gold & silver, food & water and stuff...
I agree 100%, onlooker, that Bruce writes great stuff!
good observation and post.
State of Illinois has $9 Billion in outstanding trade payables. How about California...anyone know?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/18/EDED1HA111.DTL
At least $265 billion, and perhaps $737 billion - depending on how you cruch the numbers.
cruch = crutch or crunch?
similar article from |Feb 9 Reuters
http://www.reuters.com/article/2012/02/09/pharmaceuticals-europe-idUSL5E...
Gee... I wonder what would happen if they quit shipping all the various 'mind control' drugs (antidepressants, ADD, etc.) to the PIIGS..!
They'd go APEshit!
Bruce...any questions now as to why multinationals are hoarding so much cash? When your "receivables" are so much Swiss cheese you're going to hoard to offset because you know you're not going to get paid. Same basic reason the banks are holding all THEIR cash at the Fed. IOW, balance sheets are a lot smaller than they look.
How big is the leap from Novartis to Unilever or P&G? Food keeps people alive too you know...
Drugs are important, food is a whole different matter.
Push come to shove, the only bill you pay is the food bill. PIGS are no different.
Great article again Bruce!
Patents can be nullified by the declaration of force majeure. The US government did this in WWII. In a default and national emergency, so could Greece or any other bankrupt.
The PMA/SMA countries would just have a international law case on unjust "taking of patents" that would drag on in court for 5 years, or get resolved in WTO arbitration.
The whole system depends upon good faith and cooperation. We are about to test both.
My grandfather, who was in the auto repair business during the Great Depression, always said that a man given the choice of getting his car running and feeding his children, the car comes first. If you can't get to the food, it doesn't matter that it's available (or not).
what a dumb comment...... i would rather go by feet to supply my family
cs I have said the same. My belief is that large corporates have realized that they may have to become their own bank to facilitate business. Beneath that is the realization that not only do banks have worthless sovereign debt but probably have provided worthless letters of credit to enable purchases by broke state run enterprises. So if big bank A provides such a letter they are asking; Is that enough? We may soon find out.
Don't worry about Novartis and Roche, they are making plenty of money harvesting the boomers tumors. And with all the GMO food being produced that boomer tumor business will keep booming.
BTR (Boomer Tumor Remover) buy rec?
Holy crap.
Good job Bruce, thank you. Your best stuff yet. * * * * *!
The lights will "dim a bit" but not go out. Bruce I really like your writing and topics, however, continually looking at the implosion of the financials (this mess was created by them, for them, and about them) so in that view it DOES look like the end of the world. There is a very large society out there that will simply "go on". People will still eat.
The only thing about this money and the $20 billion not paid, is that it will NEVER BE PAID. and yes the Pharma, the car manufacturers, the financial assholes will all lose their asses. That is as it should be. Theses idiots made these stupid promises they knew perfectly well that the trajectory of the revenues were not going to EVER meet the promises.
FUCK 'EM! Let them die. That does not mean the rest of the world will die. That is precisely what Hank the prick asshole Paulson did. All these assholes are only worried about the FIRE industry, every thing else they say collectively "fuck off". Well the rest of the population in the world outside the FIRE industry (a completely and unneeded group of non producing assholes as there ever were in the history of the world) will soon start saying "FUCK OFF FIRE"!
This group and the people that work in those halls are almost entirely unnecessary to survival.
Why... I think I will take the under on that bet, thank you very much!
The rest of your post merited not voting you down, but I can't justify voting you up... You should consider examining US bank exposure to the eurozone, and the web of derivatives worldwide.
I think his point was that, if the FIRE industry collapsed, the country would still survive. Lifestyles would end up changing big-time, as big industry might then fail. But we would survive. At least some of us. Densely populated areas might have some difficulty if food and medicine, and the transport for both, became impaired.
If so, then I agree.
But when "it" happens, I fully expect there to be power outages, and if there's storm damage or some other infrastructure issue, it will take locals fixing it themselves.
BK. Go visit Illinois
Bruce, you are a consistent top must-read of the ZeroHedge 'contributors' section, though often your articles, like this one, are really 'main page headline stories'.
Good profound point you make, from your experience in the 1980s, that it is the government credit arrangements with suppliers and vendors that are the real 'pressure point' as much as the bond markets, and maybe even more important as signifying the point of no return.
This also recalls of what is going on with US states, where places like California and Illinois are not paying suppliers and vendors either.
As you suggest, when things hit the wall in this area «...debt default followed within weeks ... »
Maybe the 'big one' is not long in coming now.
I know that at least in Illinois (and likely elsewhere) drug shortages have become commonplace. I suspect a funding issue, at least in part. For the past two months, drugs such as morphine, zofran, dilaudid, et. al. have been difficult to obtain. For those not familiar, they are medications that are crucial to a hospital. Puking out your brains post surgery is an ugly thing. Waiting much longer than usual for a dose of zofran to make the nausea subside, is uglier. The hospitals have been vocal about the state's inability to pay it's bills. One local hospital is owed 15 million. Budget cuts have been numerous for area hospitals, but how long can you operate smoothly when you don't know when the bills will be paid?
Zofran is not cheap. I have a regular script for the generic but name brand Zofran would run me about $500 a month w/ Express Scripts. I have had no problem getting my 90 day supply of the generic (Ondansetron).
I live on the border of MA/RI and Mass Health is accepted in RI also. Medicine is big in MA and I have been wondering how much the RI hospitals/doctors are now benefiting from Ma Health payments. I know I can get great treatment at RI hospital now instead of Boston being my only option. This is excluding RI hosp. ER's which have extremely long wait times.
"...places like California and Illinois are not paying suppliers and vendors either."
+1, I've been wondering why companies continue to do business with customers who don't pay. Illinois now has $9.2 billion in unpaid bills!
Because the margins are beyond huge on the drugs when the promotion costs are removed.
They must be making it up on volume.
It was an obvious line to punch, but it was STILL fucking LOL funny...
Big Pharma wants you dependent on drugs for life. You can easily avoid most diseases by proper diet and exercise and lifestyle choices.
Do not feed the pharma monsters.
http://diabetesrisk.net/
Health is the first freedom - do not surrender your freedom to big pharma.
from Franco Cavalli a swiss experti in tumor diseases
"if you live perfectly all your life, you can avoid no more than 50% of the tumoral diseases"
you're a tumor diseases expert?
@JustObserving
you speak nonsense...the nonsense of the completely uninformed. In my area of medicine, rheumatology, I state without exageration or bias (I don't make a dime on the new meds vs the old stuff) those patients who do not respond to the good old cheap stuff should get down on their knees and thank the 'evil big pharma' for bringing them the new drugs that make a life go from its natural course of being in pain and wheel chair bound to 'able to play golf at a professional level'. Someone did a lot of work and coordinated with a lot of other brilliant people to get society to the point where a doc like me can deliver these products to those who need them. This has happened not only in my area but in oncology, infectious diseases and other areas as well. Surgery advances in the past 5 decades have added years of GOOD life to many patients. I have wittnessed the changes. I despise big government as much as anyone on this site but to win this fight we must have truth on our side...not slogans or personal opinions.
I am against big pharma solutions for preventable diseases. And the exceedingly high cost of pharmaceuticals in the USA.
"In a report in The New England Journal of Medicine, Walter Willett, MD, PhD, and his colleagues from the Harvard School of Public Health demonstrated that 91 percent of all Type 2 diabetes cases could be prevented through improvements lifestyle and diet."
Diabetes is the mother of all diseases since it increases risk for many diseases such as heart disease, cancer and strokes.
Why should the US with about 4.5% of the world's population spend about 50% of the world's total spending on pharmaceuticals?
"Prescription drugs cost about 50% more in the United States than they do in other countries."
It is estimated that big pharma gets away with overcharging the US by about $100 billion every year.
Since you are so well informed, defend this raping and pillaging of US citizens by big pharma.
Cost of drugs in the US is a big issue. But a larger issue is the overprescription of drugs.
The average senior is taking 6 - 12 drugs at a time - that's INSANE.
ALL DRUGS ARE POISON. There's always a risk/reward decision to be made...or ignored.
I have no interest in defending any thing. I know that there are economic insanities in the system I am merely pointing out that big pharma has given us big results. If you want to change your comment to pertain to 'preventable diseases' I can accept that. Just how certain are you though that even type 2 DM is entirely preventable?
Suppose we learn that some evironmental factor is contributing?
Those who make statements like you have seem to come from a position in which it is the patient's fault....maybe it is...maybe obesity due to gluttony IS the culprit, maybe those with type 2 'deserve' what they have....I do not know that these are accurate statements though. That is why we have science...to examine problems and find their causes...sometimes common sense is right....sometimes SURPRISE!!! example...'stress causes ulcers' if you did not agree with that you were an outcast...until H pylori was discovered and suddenly we are treating ulcers with antibiotics and poof ulcers gone...stress remains...so much for 'beliefs'. Until you examine in detail it is best to admit 'we really do not know'.
Surgeons don't heal anyone, they just change bandages -- you know the point.
No shit.
I get this appalling image of dolts standing in an endless line, waiting to get their 'medicine'.
Gross.
If health is the first freedom, consider that death may be the final freedom. This is an good article about how (some) doctors view the extensive therapies available to treat cancer and other major maladies when it comes to their own mortality. Most especially, think about the stats of the efficacy of CPR: The likelihood of "heroic measures" being successful are extremely slim.
http://on.wsj.com/wpO98H
Advanced directives (living wills, durable power of attorney) will provide some guidance on how aggressive caregivers are about keeping a person alive. Under the law, they are required to do everything: CPR, intubation, drugs, feeding modality, dialysis, etc. These measures can keep a body going a long time, depending on the general state of health. If you've written out specifically what you do and do not want (comfort measures only, say), you stand a better chance of getting what you want than if you didn't have one at all.* If you've got a good relationship with a primary doctor, that chance goes up.
*The reason the advanded directive doesn't always work as planned is that some first responders will go ahead and do everything despite the paperwork being flashed right in front of their faces. It's not right, it isn't legal and it'll be corrected later. Get family members on board with your wishes so they circumvent the plan.
"*The reason the advanded (sic) directive doesn't always work as planned is that some first responders will go ahead and do everything despite the paperwork being flashed right in front of their faces. It's not right, it isn't legal and it'll be corrected later. Get family members on board with your wishes so they circumvent the plan."
I was a paramedic for 3 years and and EMT for many more as founder-chief of our local VFD for ~20 years, so I have to defend my brethern and cistern: Say you are working a code in the field - intubation, cpr, leads and paddles, the whole nine yards and mama, who is present, sez 'Stop' and flashes a health directive, and you (mercifully) stop. Two months later an adult son and/or daughter come up with a *newer* health directive giving them poa, cause mama is getting a little dingy, and you are totally screwed. (This is California - other states, maybe not.) The deal is, end-of-life decisions are really, really, really hard, and I have worked hard on my, and my wife's, Health Care Directive, and have spent time with my two alternate 'deciders', if wife is dead, (my two sons) being as clear as I can about not hesitating to pull the damn plug if they decide that is the deal. I had a good friend in my paragliding days with a 22 year old daughter that had to make just that decision after he had a paragliding accident, and it was agonizing for her - all his buddies, me included, told her what we would want done, and we were sure he was there too. She finally did, but God Damn, it was hard.
So don't blame the first responders, OR the hospital personnel if a health care directive is not in place - Jena's basic advise is sound, write yours up *today* and save your next of kins untold grief. Discuss it with them to.
Hate to say it, but as far as anybody knows, none of us, not even the real smart folks on ZH, is immortal.
OK, clambering down off soapbox.
that's the only right thing on the whole world.... rich or poor, ugly or nice, kind or bad we will ALL go down in a grave!
i think it's the only justice we can see in our lives
You're right, NFP, the whole subject is messy and miserable and often the ones caught in the immediate middle are the paramedics and hospital staff. One of the worst situations is if a patient is terminal and everyone at home is seemingly on board with the person's decision to die at home but once they start to go, they panic and call 911 anyhow. Then, despite the wishes of the patient who is lights out at that point and the written Do Not Resuscitate Order and fully detailed Advanced Health Care Directive, they hide the paperwork and tell the medics to "Please, do EVERYTHING!"
(I do know a couple of paramedics who got burned by stopping a code per the paperwork that was legit because the extended family objected later on. Even though they were right, from then on they ignored written orders and figured it would get sorted out in the ER. The big problem is the intubation: Once that tube is in place, it's a difficult thing to remove. At least it's easier with a DNR.)
The code is successful from the point that the person makes it out of the ER and is established in the ICU, but is comatose and won't likely ever wake up.
The family huddles in the waiting room, more come from other parts of the country and it becomes an all out effort to preserve life.
How long this lasts rather depends on how well the patient spelled things out, how clearly they communicated things to their doctor (who has a copies of the legal documents) and most especially, who designated someone to have medical power of attorney. And that person needs to have the strength of character to carry out the wishes of the person who really needs them at this point.
This state can go on for a long time, and it does the patient no good since that's not where they intended to be.
i cannot disagree with you Jena.
Probably the most important thing is to respect the last whishes of the diying guy....
Wow Jena:
You are one smart bitch. And I mean that in the most favorable sense. Nothing really good is cheap & easy. You push some legit bottons and I respect you for that. Does not = agreement, just respect.
Thank you ISEEIT, I take that in the spirit in which it is given. Back atcha.
Hi Jena, some great info there that many need to hear and take very seriously.
I must say though that I have a rather large bone of contention with an implicit criticism of yours when stating "It's not right, it isn't legal and it'll be corrected later." regarding CPR when a living will prohibits it.
Nobody should beef about emergency personnel administering CPR. PERIOD.
If you don't want Aunt Mabel to be resuscitated, fine. Don't call 911.
[Edit: And then I sroll down and see NFP's far more eloquent response, and an admirable reply from Jena.]
You do know that the "phyto-ceuctical industry" has bigger revenues now that your so called big pharma. Thirty years of shitty "edumacation", pseudo science, and propaganda by those who believe in eternal life through "natural" products (the hippies won). Do not surrender your freedom to ecofascists and their "organic" religion.
Cool site. Easy to answer questions for the most part (if you know your cholesterol numbers, that is, everything else is simple) and the risk assessment graph and recommendations at the end are great.
Yes good site. I wish they had a mention of Oxygen deprivation is the #1 missing (lacking) nutrient. It is the key, diabetic and cancer cells become diabetic or cancerous as a way to survive from not getting enough Oxygen. When your cell is diabetic or cancerous you then crave sugar to feed those cells. The other nutrients are important of course and any lack of nutrient can make you vulnerable to disease/radiation. Magnesium, iodine, potassium, zinc, omega 3, B should all be on your list. Trust nothing or nobody but your self and your own analysis.
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