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One item on the minds of many pharmas is the European situation and how to deal with it proactively. While it is still contained to Greece, most have simply continued to supply and let the bills build up, but a few have begun to restrict supply. Well, Greece is now paying their accumulated pharma bill -- with government bonds. This allows Greece to 'pay in full' but the pharmas are hardly getting 'full payment'.

Drugmakers take a hit on Greek bonds

After carrying the public health system's debt on their books for many months--in some cases, more than a year, drugmakers are finally getting paid by the Greek government. Good news, right? Well, there's just one drawback: Greece is paying its drug bills in zero-coupon government bonds.

Greece paid Roche with a bond, too. The company sold it--at a discount of 26%, CFO Alan Hippe said. "[B]ut we have now the cash," Hippe said on a conference call last month, Bloomberg reports. "And cash is what counts. We are monitoring our exposure, especially in Southern Europe, very very diligently."

Some companies have started to deny shipping drugs, but that is a PR hit no one wants to take. Austerity has already forced healthcare suppliers to accept some deep discount pricing, but this form of payment forces discounts deeper still. And if (when?) this expands beyond Greece, pharmaceutical and other international business models that rely on government operations will have to revisit their business models and operations. The story to me has an ominous 'canary in the coal mine' feel to it.

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