LEO Pharma to find alternative solution to withdraw pharmaceutical products from Greek market

Jun 2 2010

LEO Pharma is in dialogue with the Greek authorities to find an alternative solution to withdrawing the company's pharmaceutical products from the Greek market.

After more than 50 years of presence in Greece, LEO Pharma fully understands the very difficult situation in Greece.

During the past two-three months, LEO Pharma has therefore on several occasions been in dialogue with the Greek authorities with the intention of finding a mutually satisfactory solution benefiting the Greek economy, LEO Pharma and most importantly the patients. We firmly believe that a solution is achievable.

However, given the decision of the Greek authorities to insist on introducing a price reduction of 25 percent on average, we see no other solution than to withdraw some of our products from the Greek market, as a price reduction on our products of up to 37 percent will have severe consequences on our total business, including long-term investments in research and development to the benefit of patients worldwide. Since the Greek prices on our products are reference point for prices in a number of European countries, we risk that prices in e.g. Spain, Portugal, Italy, Romania, Turkey, Czech, Hungary, etc. will also be subject to severe reductions if we do not act.

As a consequence, we have now informed the Greek authorities that, in the coming month, we are prepared to withdraw those of our products on the market for which there is an alternative product, thereby still offering a treatment solution to the Greek patients. Meanwhile, we are ready to continue our dialogue with the Greek authorities searching for alternative solutions.

Even before the price reductions, the Greek prices on 20 of the 29 LEO products available on the market are the lowest in Europe. On the remaining nine products, the prices are second or third lowest compared to other low priced European countries. LEO Pharma has issued a Letter of Discontinuation to the Greek authorities concerning a potential withdrawal of 18 of the 29 drugs, however, ensuring that among the remaining products there is a treatment alternative within our therapeutic areas.

Ensuring that patients worldwide have access to effective drugs is a key concern to LEO Pharma. By leaving some of our products on the Greek market we believe that we are able to balance our responsibility to secure the long-term business of LEO Pharma with our obligation to ensure that the Greek patients continuously have access to effective drugs.

The long-term financial stability of LEO Pharma is, however, a prerequisite for our ability to invest in the research and development of new drugs, as well as our ability to meet our obligations to remain a stable employer for more than 3,500 people in 54 counties.

The responsibility to serve patients globally, which is the entire foundation of our company and all our activities, goes beyond the acute financial situation in Greece. The Greek debt to LEO Pharma is MDKK 275 (approx. MEUR 37).