UPDATE 2-Novo Nordisk says accepts new Greek insulin prices

* Higher prices effective from June 14

* New prices still lower than average of 3 lowest in Europe

* To equal avg of 3 lowest in Europe from Sept. 1 at latest

* New decree means price cut of around 10 percent for Novo

* Shares up 1.9 percent

(Adds company comment, share price)

By Anna Ringstrom and Ole Mikkelsen

COPENHAGEN, June 14 (Reuters) - Denmark's Novo Nordisk NOVOb.CO, the world's biggest maker of insulin, said on Monday it would resume supplies of its modern insulins to Greece after the country raised its prices for the drugs.

Drug prices are in the firing line as European governments tackle runaway budget deficits.

Novo in May suspended the supply of its most modern insulins to Greece, calling a government decision to slash some prices by 25 percent “unacceptable”. [ID:nLDE64U1CV]

Novo said in a statement that Greece issued new pricing late on Friday for 48 insulin products including Novo’s modern insulins and pen-based insulins. The prices came into effect June 14.

Novo said the new prices were higher than those in a decree in force from May 3, but lower than the average of the three lowest prices in Europe, a level Novo had argued is reasonable.

“It’s still a price reduction compared with the the prices before May 3. It’s no longer 25 percent but rather along the lines of 10 percent,” said Novo spokesman Mike Rulis.

But Greece has stated it will by Sept. 1 at the latest base prices on the average of the three lowest prices in Europe, Novo said.

“We have therefore accepted the new temporary prices. As a result, we expect that all pharmacies will soon be able to deliver the full range of Novo Nordisk insulin products in Greece,” Novo said.

It said on June 10 it would supply drugs as normal again if Greece changed the price formula to use the average from the three countries that out of 22 European nations have the lowest prices. [ID:nLDE6592DS]

Cash-strapped Greece, which is targeting healthcare spending cuts of 1.2 billion euros ($1.46 bln) this year, accounts for less than 1 percent of Novo’s sales which last year amounted to 51.1 billion crowns ($8.37 bln), but the firm has said it fears big price cuts in Greece could spread to larger markets.

Shares in Novo were up 1.9 percent at 1401 GMT while the STOXX 600 European healthcare index .SXDP was up 0.2 percent. (Editing by Simon Jessop and David Cowell)