Roche is blaming Government deal for revenue decline
The main Irish arm of Roche, the Swiss pharma giant, has blamed a new pricing agreement with the Government for "a significant decline in revenues" at the company in 2017.
That is according to new accounts filed by Roche Products (Ireland) Ltd which show that the company's pre-tax profits last year declined by 7pc to €5m.
This followed revenues declining by 6pc from €108.96m to €101.69m during 2017. The firm paid a dividend of €2.5m in 2017.
According to the directors' report "2017 proved to be a difficult trading year for the company with a significant decline in revenues".
On the factors leading to the decline in revenues, the directors state the company "felt the full-year impact of the new pricing agreement between the Irish Pharmaceutical Healthcare Association (IPHA) and the Department of Health which was signed in July 2016".
They add that the impacts "were a combination of lower list prices and increased rebates to the State".
The directors state "like other IPHA members, the company continued to experience significant delays in the re-imbursement of medicines".
The directors also stated that one of the firm's cancer drugs, Mabthera, became subject to biosimilar competition.
They said: "Under the pricing agreement, the company had to reduce the price to the State of Mabthera to 70pc of its original price. On top of this, we also lost volume share to the biosimilar."
The directors state that the continued delay in the re-imbursement of innovative new medicines "is a cause of concern for the company, both in terms of planning and the ability to deliver life-changing medicines to patients in Ireland".
They say that, despite these challenges, the directors remain cautiously optimistic for the future with a strong pipeline of new medicines for the treatment of haemophilia, lung cancer and multiple sclerosis among others.
They state: "However, revenue is expected to drop further in 2018 due to further price cuts and increased competition from biosimilars."