United Drug CEO warns of job losses and blames Government
LIAM FitzGerald, chief executive of healthcare provider United Drug, has warned that job losses at the group's Irish business are on the horizon unless the Government tackles what he alleges is an unsustainable pharmaceutical wholesale model.
Speaking to the Irish Independent yesterday as the company released what analysts described as solid interim results, Mr FitzGerald said he and his team had been in contact with the Government over the existing model, which has entailed price cuts on medicines in order to slash the State's overall drugs bill.
He insisted that the wholesale business was effectively a public service and should be operated under a formal mandate in that sense, with wholesale providers properly remunerated for its provision.
United Drug's wholesale operations in Ireland employ 700 people.
"We're collateral damage from the Government's decision," said Mr FitzGerald. "A lot of pharmacies have closed and the level of service is going to change.
"People won't be able to get medicines where and when they need them," he claimed.
The previous Government forced cuts of 40pc early last year on prices of over 300 drugs for which a generic version already existed in the market.
The cost to the taxpayer of supplying drugs and medicines under the General Medical Service (GMS) and Community Drugs Schemes (CDS) was more than €1.6bn in 2008.
Last month, new Health Minister James Reilly said savings of €155m would be achieved this year under the GMS and CDS schemes and that the prices of more than 1,000 medicines had been reduced since January.
He is also finalising a bill to introduce so-called reference pricing and generic substitution for drugs.
Mr FitzGerald said he hoped to meet officials from the Department of Health in the next few weeks and of eventually putting his case to Dr Reilly. He added that the wholesale pharmaceutical sector in Ireland had fallen in value by 5.5pc over the past year.
United Drug posted a 6pc rise in operating profit to €37m in the six months to the end of March, while revenue was 5pc higher at €893.6m.
The group's healthcare-supply chain unit -- which includes the wholesale pharmaceutical business in Ireland and some UK operations -- accounted for €725m of the group's revenue in the first half. That was 1pc higher than a year earlier.
Its US operations had what Mr FitzGerald described as an "outstanding" performance.