10 JUN 2011
By Emma Ross-Thomas | Bloomberg
Spain’s association of pharmaceutical firms said Spain’s health system owes the companies 5.2 billion euros ($7.6 billion), adding to concerns about finances of regional governments that control health care.
Companies have to wait on average 410 days to get paid, and in five regions the delay is as long as 600 days, said Farmaindustria, which represents international and local companies that account for more than 90 percent of Spain’s prescription drug sales. The debt is for medicine supplied to hospitals, it said in a statement. The Health Ministry in Madrid declined to comment on the report.
Health care is controlled by Spain’s regional governments, which are struggling to rein in budget deficits after a plunge in revenue linked to the slump in the real-estate industry. The regions are crucial to Spain’s efforts to convince investors it can reorder public finances amid concerns that the transfer of power after local elections on May 22 may reveal deeper budget holes than the outgoing administrations have acknowledged.
The gap between Spanish and German 10-year borrowing costs rose 8 basis points today to 232 basis points, that down from a euro-era record of 298 basis points on Nov. 30.
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