ECONOMY

Novartis reconsidering credit in southern Europe

Novartis AG, Europe?s second-largest pharmaceutical company, said Friday it may restrict credit to hospitals as the Swiss drugmaker takes an ?aggressive? approach to cash collection in southern Europe.

Novartis may put some customers on a cash-on-delivery basis in Spain and Greece if hospitals do not pay bills, Chief Executive Officer Joe Jimenez said in an interview with Bloomberg Television.

The Basel-based manufacturer is becoming ?conservative? with cash management in Europe, he said. ?We have not seen any significant reductions in demand? in Greece and Spain, Jimenez said in the interview in St Petersburg, Russia. ?This is healthcare, remember, this is not discretionary purchases.?

Drugmakers have been struggling with the issue of how to collect payment from cash-strapped hospitals in Southern Europe. The Greek state?s debts to drugmakers will probably climb to about 1.55 billion euros by the end of June from 1.21 billion on March 31, according to European Federation of Pharmaceutical Industries and Associations.

Jimenez said he expects an ?orderly solution? to Greece?s sovereign debt crisis ?just because there are so many interests at stake.?

[Bloomberg]