A government compromise plan to repay billions of euros owed for equipment and medicine purchases has been rejected by providers forcing Greece's debt-plagued state hospitals to face a supply embargo.
"This proposal forces our companies to shut down altogether," Panagiotis Stravolaimos, head of the association of science and health providers (SEP) told Mega channel on Saturday.
"I do not think there is any possibility of agreement on this," he said.
The finance ministry on Friday said it would issue bonds to pay back most of the 5.6 billion euros (6.9 billion dollars) of accumulated state hospital debt.
In a joint statement with the health ministry, it said the state would pay back 230 million euros in cash for debts dating back to 2005 and 2006 and the rest through bond issues, the last of which will be on January 1, 2011.
The head of the grouping of orthopaedic supply providers, Dionysis Sargentis, also told Mega that the government plan spelled ruin for his sector.
"The banks deny us funding because they say public hospital bills are unreliable. How are we supposed to survive?" he said.
Health supply providers say their prices are high to make up for the fact that they often have to wait for years to be paid by the Greek state.
The government has vowed to clean up deep-rooted mismanagement at public hospitals as part of sweeping spending cuts to tame a national debt of nearly 300 billion euros that has brought the country to the brink of bankruptcy.
It has also tried to stop lavish spending on medicine by the nation's ailing social and pension funds by imposing price limits on drugs.
And Greece's labour minister this week called on drug suppliers to "limit their profits to serve the motherland."
Drug companies have appealed to the Council of State, Greece's highest administrative court, to block the measure.
And Danish-based Novo Nordisk, a leading supplier of the anti-diabetes drug insulin, this week said it was "temporarily" pulling 17 of its products from the Greek market in reaction to the price cut.