He was speaking after a health consultative forum in Dublin, attended by 200 people from different health organisations.
A number of people attending the forum told the minister they were concerned that prescription charges were to blame for some people not taking all their medicines.
The minister said he was awaiting research being conducted at Trinity College Dublin to see how the prescription charges were affecting behaviour.
“We certainly did not leave anyone under any illusions that we were going to reduce it in the coming budget,” he said.
“It brings in over €100m and we are not in a position to have any give backs in health at the moment.”
Asked if it was his view that the HSE should shed 700 jobs a month before now and the end of the year, Mr Varadkar said it would not be practical.
It could only be achieved by compulsory redundancies and that was not permitted under the Haddington Road Agreement.
Also, it would create “illusionary savings” with gaps in the service having to be plugged with agency staff.
He said HSE staff numbers had already been reduced by 15,000.
Mr Varadkar said a problem this year was the cost of agency staff that had increased dramatically to around €200m.
He was considering hiring people on temporary contracts, not only to save money but to get a better service too.
“But we do need to explore that and make sure that the savings would be realised,” he said.
Asked about patients on trolleys, Mr Varadkar said he had looked at the statistics and found that over half of the patients on trolley were in three or four out of the 50 acute hospitals.
He also noticed that there were huge variations between hospitals. Some seemed to manage their beds very well while others did not.
“Delayed discharges and beds being closed are part of the issue, but I don’t think it is just down to that,” he said.
Minister of state with responsibility for primary and social care, Kathleen Lynch, said there were over 700 people inappropriately placed in acute hospital beds and that situation could not continue.
She said there would need several buildings like Mount Carmel Hospital in Dublin, recently purchased by the HSE, to deal with the situation.
She said they had a comprehensive plan to deal with the situation and premises had been identified, including a number already owned by the HSE, but it would take around three years to roll it out.