Argentina’s hospitals and pharmacies are running out of medical supplies and bracing themselves for rising drug prices as the bankrupt country sinks deeper into economic crisis.

"We are facing true chaos. It is unprecedented. There is no medication or treatments," Juan Carr, who heads Red Solidaria (Solidarity Network), a non-governmental community support organisation, told local media.

Some hospitals have been forced to turn patients away as they run out of basic supplies such as syringes and gauze. Red Solidaria has called on the Argentine people to pool whatever stores of drugs they have for patients with AIDS, cancer, and organ transplants, who need specific drugs to stay alive. Brazil recently donated 275 000 doses of insulin for free distribution to 300 000 people with diabetes.

Argentina’s health services are struggling as the social security system for elderly people (the Integral Programme for Medical Assistance—PAMI), has run out of money. PAMI has not paid many of its suppliers, in some cases for up to six months, causing a domino effect as the chain of payments from suppliers to chemists, hospitals, and health workers breaks down.

Over four million people subscribe to PAMI, and much of the country’s public and private health system depends on it. The system, set up in 1971, has increasingly haemorrhaged cash through bad management and corruption. The new health minister, Gines Gonzalez Garcia, has acknowledged that the system is "very sick" and needs a fast injection of about 100 million pesos (£38m; $54m; €62m) to restart. He has assured protesters and health workers that the government will resolve the crisis "in the short term."

Meanwhile, small private health institutions are going bankrupt and 700 000 private sector health jobs are at risk, according to Norberto Larrocca, president of the Confederation of Private Clinics, Sanatoriums and Hospitals. At least 30% of pharmacies in Buenos Aires province face collapse if the government cannot inject new funds in coming days, according to Enrique Padin, vice president of the Buenos Aires province Pharmaceutical College.

And over a third of the 36 million Argentinians do not benefit from any kind of health cover, he said. Private health institutions have offered to provide basic health care for five million of those marginalised people if the social system could find $4 (£2.80; €4.50) per head.

In another damaging effect of the economic crisis, public counselling and emergency health services have reported a rise of about 20% in heart problems and rises in anxiety related complaints of insomnia, gastroenteritis, panic attacks, and sexual impotence.

Argentina defaulted on its $141bn foreign debt at the end of December after bloody riots over the country’s deepening economic crisis toppled the government of Fernando de la Rua on 20 December. The current government of President Eduardo Duhalde devalued the national currency on 6 January to try to restart the paralysed economy. On the streets the peso has fallen to half its previous value, so prices for imported goods, from light bulbs to microchips, have soared. Medicine prices have not yet risen, but supplies have been held up, and experts expect prices to rise in coming days.

Psychologists say that people are experiencing a sense of loss and helplessness as their savings are locked in a failing banking system. Many face crippling debts and possible job loss in a country where 18% are already out of work. Public protests are increasingly angry and crime is rising, making many afraid that their streets are no longer safe.