Irish arm of Roche says drug-pricing deal will hurt revenue growth

A new drugs pricing agreement with the Department of Health and the HSE will further curtail revenue growth at the Irish arm of pharma giant Roche, its latest accounts warn.

Accounts filed by Roche Products (Ireland) Ltd show that pretax profits reduced by 31 per cent to €4.77 million in 2021. The firm sustained the drop in pretax profits despite revenues rising by 3 per cent from €102.1 million to €105.03 million.

The main activity of the business is the sale of Roche branded medicines here, and the directors in a note with the accounts said that “after the disruption caused to sales by Covid-19, the company returned to growth in 2021, albeit at a relatively modest level of less than 3 per cent”.

The note said that a new Irish Pharmaceutical Healthcare Association (IPHA) pricing agreement with the Department of Health and the HSE “would further curtail revenue growth over the coming years”.

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The four-year deal was struck in December 2021, and the accounts noted that the deal would have three major impacts on the Swiss-owned business here.

The note said that these include a further reduction of the list price from 80 per cent to 62.86 per cent for patent-expired biologic medicines; a further reduction in the list price from 50 per cent to 40 per cent for patent-expired non-biologic medicines; and an increase in the rebate payable to the HSE for medicines supplied to the HSE.

The directors said that despite the IPHA deal and impact of Covid-19, they “remain confident in both the underlying business and the pipelines of new medicines and new indications for existing medicines”.

The note also expressed concern at the length of time it took for new medicine to be reimbursed here. It states that “Ireland continues to be one of the slowest countries in western Europe to reimburse new medicines”.

The accounts said that it was “regrettable that such life-changing medicines are often available to patients in other EU countries well before they are available to patients in Ireland”.

The company paid out a dividend of €7 million in 2022 to Roche Products Ltd, and this followed a dividend payout of €4.77 million in 2021.

Numbers employed by the company totalled 90 and staff costs in 2021 increased to €13.55 million that included severance costs of €938,000. Directors’ pay totalled €907,000, made up of salary and bonuses of €762,000 and benefits in kind of €145,000.

At the end of December 2021, the firm had shareholder funds of €21.05 million.