July 12, 2019 / 10:53 AM / in 5 days

Croatia's drugs wholesalers limit hospital deliveries as debts rise

ZAGREB (Reuters) - Croatian drug wholesalers have decided to limit deliveries of medicines to some hospitals in a row over mounting debts and urged the government to pay immediately at least half of them now totaling 2.6 billion kuna ($396 million).

Wholesalers said on Friday they would sue those hospitals with the longest payment delays, adding that the hospitals’ debt to them is rising by some 150 million kuna a month.

“After financing the hospitals for many years without getting (proper) payments, our own business is in jeopardy. It is only the government’s responsibility that deliveries to some hospitals will be reduced as it has ignored our problem,” Ivan Klobucar, a representative of wholesalers, told reporters.

The measures cover hospitals with payment delays longer than 1,000 days in the central town of Sisak, the eastern town of Vinkovci and the popular Adriatic destination of Dubrovnik.

The wholesalers said they had also informed the European Commission about the situation as it “threatens the functioning of the Croatian health system which must also be at the disposal of other European Union citizens”.

Croatia’s hospitals, five of which delay payments by more than 800 days, settle their debts on average in 590 days. At the end of 2017 the overall hospital debt to wholesalers amounted to 1.6 billion kuna with an average payment delay of 360 days. The legal payment deadline is 60 days.

The health ministry was not available for an immediate comment on the new moves by drugs wholesalers.

The overall debt arrears of Croatia’s health system, which includes the state agency for health insurance and other medical institutions, are estimated at around one billion euros ($1.13 billion).

The health and pension systems are sore points in Croatia’s fiscal performance which has considerably improved in the last three years as the country strives to adopt the euro in the next four to five years. However, reforms of the health and pension systems remain weak.

Reporting by Igor Ilic; editing by David Evans

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