Drug firms report fall in profits
Price reductions set down by the Health Service Executive for prescribed drugs contributed to reduced profits at Irish subsidiaries of two pharma giants last year.
New figures show that pre-tax profits at the Irish arm of Roche, Roche Products (Ireland) Ltd fell by 22 per cent from €15.7 million to €12.2 million in the 12 months to the end of December last.
Separate accounts filed by the Dublin-based unit of Swiss pharma firm Novartis show that its pretax profits reduced by 13 per cent from €1.47 million to €1.27 million in the same period.
Both firms generate their revenues through the sale of medicines in Ireland.
According to the directors’ report filed by Novartis Ireland Ltd, revenues “decreased by 2.4 per cent from €63.4 million to €61.9 million as a result of a number of price decreases set down by the HSE during the year”.
On the price risk faced by the firm, the directors state: “At the beginning of 2011, the Irish Pharmaceutical Healthcare Association (IPHA) reached an agreement with the State to deliver savings in the medicines bill through price cuts and other mechanisms during the course of 2011. These savings are in addition to the price cuts implemented in 2010.”
In accounts filed by Roche Products (Ireland) Ltd, the directors state: “At the end of 2010, the pharmaceutical industry agreed to a reduction in the price of off-patent medicines as well as the extension of the scope and rate of the primary care reimbursement scheme rebate with the HSE.” These, they say, contributed to a contraction in the market and more difficult trading conditions.