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Novartis, the largest pharmaceutical company in Europe, is considering implementing ‘cash on delivery’ in some hospitals in Europe if the situation gets worse.
Joe Jiminez, Chief Executive Officer of Novartis AG, told Ryan Chilcote on the sidelines of the St Petersburg International Economic Forum, which was broadcast on Bloomberg Television’s ‘On The Move’, “if we continue to deliver to some of those hospitals that aren’t paying and we don’t collect our cash, we may have to put some credit limits on those particular hospitals.”
Asked by Chilcote whether this is likely to happen within the next couple of months, Jiminez attempted to defuse the question and said that it will depend on the circumstances
He said: “It really will be dependent on what happens in the countries.
“You really have to look at overall Europe. The situation is not that way in Germany,it’s not that way in France and in the UK, the business is still growing and doing well.”
Asked about the outlook for Europe over the next five years, Chilcote said he wouldn’t like to speculate.
“There have been so many changes that have occurred just over the last year or two years. To try to speculate, we leave that toe the politicians. What we’re trying to do at Novartis is be ready for any eventuality.”
As part of this, though, Novartis is taking a very conservative approach, Chilcote says.
“Obviously, because of the debt situation in Spain and Greece, we’re taking a very conservative approach in terms of making sure that we’re collecting our cash.
“We’ve not seen significant reductions in demand because this is healthcare. It is is not discretionary purchases. There are a lot of people in those countries who need to continue to get their medicine and it’s our obligation to continue serving that.
“Yet we still have to ensure that those hospitals that are, let’s say, government run are delivering the cash after we deliver the products.”