The Department of Health is next month due to negotiate a new pricing and supply deal with the pharmaceutical industry.
"I've had these shares for years. I am a pharmacist and have practiced in Limerick for 30 years," said Dr O'Malley. "Obviously I am not practicing as a pharmacist now. I acquired those shares over the past 20 years in both United Drug and Uniphar. Normally I don't trade in shares at all. But the reason I supported those companies I dealt with them as a pharmacist, number one, and, number two, both of them employed a lot of people in Limerick."
The minister described his shareholdings as "miniscule" a couple of thousand shares and said they would not be influential. He never attended the company meetings or voted at AGMs.
Dr O'Malley pointed out the shares he held were in wholesale companies.
"I could see immediately there would be a conflict of interest if they were manufacturing or doing research. But wholesale companies only distribute drugs."
Kildare TD Seán Power, another junior minister in the Department of Health, has also declared shares in United Drug Ltd.
On his election to the Dáil, Dr O'Malley said he declared his interest to the Oireachtas Ethics Committee.
More recently somebody raised a question about his shareholdings and Dr O'Malley said the Standards Commission last June told him there was no obligation on him to dispose of the shares as they did not constitute a conflict of interest.
Dr O'Malley said for years he had publicly supported far greater use of generic drugs in Ireland.
"That would negatively affect my holdings," he added.
Shares in United Drug Ltdwere quoted at E3.50 yesterday.
The company claims to be the island's biggest pharmaceutical wholesaler.
The Uniphar Group, which is not listed on the stock market, is owned by pharmacies around the country. With a turnover of 300 million, it is a wholesale supplier to pharmacies.
Department officials from the GMS division, who begin talks with the industry next month, may use a professional negotiator. A spokesperson for the department said it was considering using "external expertise" for the talks.