International drug companies have agreed to cap the amount they charge Greece for medicines.

The decision was made in a bid to solve problems that are jeopardising both pharmaceutical company’s profits and the supply of medicines to Greece.

The plans were outlined in a letter written by the European Federation of Pharmaceutical Industries and Associations (Efpia) to Greek health and finance ministers, which news agency Reuters saw a copy of.

In the letter Efpia said it will agree on a €2.88bn cap on the cost of medicines for Greece in 2012 if the Greek government commits to paying off outstanding debts and promises to ensure no further arrears will be incurred.

The proposal comes after last month the government suspended all drug exports from Greek companies amid shortage fears.

Efpia’s director general, Richard Bergstrom, told Reuters; "Setting a growth cap or budget ceiling is not something we have ever liked to do in the past, but in the current environment it is better to do that and have some stability."

"We’ve suggested this to a number of other governments as an approach to deal with the financial crisis," Bergstrom added.

Similar agreements have already been made in Portugal, Ireland and Belgium.

Pharmaceutical companies have reported a decrease in profits as the financial situation in many European countries worsens.

Andrew Witty, the chief executive of Britain’s biggest drugmaker, GlaxoSmithKline, told reporters last week that it was unreasonable for countries to continue to squeeze drug companies without serious knock-on effects occurring.

Some pharmaceutical companies have already stopped shipping medicines to Greece because of unpaid bills. Biofest was the first, while Merck KGaA said on Saturday it was going to stop shipping its cancer drug, Erbitux, to Greek hospitals.

Image: The European Federation of Pharmaceutical Industries and Associations (Efpia) has agreed a €2.88bn cap on the cost of medicines supplied to Greece. Photo: Courtesy of Adam Ciesielski.