Merck KGaA May Withdraw Research from Portugal over Debt-Report
07/09/2012| 02:28am US/Eastern
German chemical company Merck KGaA (>> Merck KGaA) may withdraw future investments for research projects in Portugal worth tens of millions of euros unless the government hospitals stick to the agreed-upon debt repayments, German daily newspaper Financial Times Deutschland reports Monday.
Merck Portugal's manager Fritz Sacher told the paper the company's research projects are long-term and require mutual trust as a basis. "The Portuguese government's lacking payment habits undermine this trust," he is quoted as saying.
Portuguese government hospitals owe the pharmaceutical industry a total of more than 1.5 billion euros ($1.84 billion) and companies have to wait nearly 550 days on average until invoices are paid, FTD reports.
Some companies, including Roche Holding AG (ROG.VX), have already halted the sale of medications on credit to highly indebted countries like Portugal, Greece, Spain and Italy until outstanding debts are paid, the paper notes, but for many companies such drastic steps are difficult as they carry responsibility for people's wellbeing.
Withdrawing research projects is a way of putting pressure on the government, as Portugal is an attractive location for research investments, FTD says. "The conditions for certain research and human studies are as good as in the U.S., but it's significantly more cost-effective in Portugal," Sacher told the paper.
Newspaper website: http://www.ftd.de
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