Drugs price cut will shut outlets

PLANS by the Health Service Executive to cut the price of prescription drugs will see some pharmacies close, the chief executive of the country’s largest drug wholesaler warmed.

United Drug chief executive Liam FitzGerald said the HSE’s move to halve the margin paid out on drugs will make some pharmacies no longer viable.

“Clearly we don’t want to see our customers put in a situation where their business is no longer viable. It is not in our interest and we feel that smaller customers will be significantly disadvantaged by the change,” Mr FitzGerald said.

Pharmacies in small, rural areas would be the worst affected, he added.

From Saturday the HSE will cut the margin pharmacists receive to 8% to save around €100 million.

Speaking after United Drug’s AGM, Mr FitzGerald said the company expected to be able to manage the change to its own margins without any major impact on its wholesale business.

United Drug’s wholesale division accounted for €979m of the group’s €1.5bn turnover in the year to end September 2007.

At yesterday’s AGM shareholders were told that the positive start to trading in the current financial year had continued.

“We continue to see opportunities to expand our businesses both through acquisition and organically, and we have a strong balance sheet allowing us to fund such opportunities,” the company said.

United Drug has also appointed Philip Toomey, a senior executive with consultants Accenture, to its board.