The Health Service Executive (HSE) is to reduce the wholesale mark-up it pays on medicines from 17.66 per cent to 8 per cent from January next.
The move, which will save the HSE in the region of €100 million, is the latest in a series of controversial cutbacks designed to reduce a €245 million financial deficit. The current mark-up enjoyed by wholesalers in Ireland is more than double the EU average.
HSE Chief executive Prof Brendan Drumm
The changes will apply to all medicines dispensed under the various HSE repayment schemes such as the Medical Card Scheme and the Drugs Payments Schemes.
The initiative will reduce the cost of medicines included in these schemes to the public and the HSE by more than 8 per cent, resulting in savings of €100 million in 2008, it said.
The HSE said it intends to cut the margin by a further 1 per cent from January 2009 and to introduce a wholesale mark-up for medicines supplied to public hospitals of between 3 per cent and 5 per cent.
Chief executive Prof Brendan Drumm said: "While it is not the only one, this is a great example of the economic benefits a national unified health service.
"The National Corporate Pharmaceutical Unit has applied a very disciplined, fair and balanced approach to an area that absorbs a major portion of our annual budget.
"The same approach is being applied across many aspects of our budget from general purchasing right through to the levels of services patients get from our investments in individual hospitals and the hundreds of voluntary organisations," he said.
Health service unions representing about 100,000 staff have said they are considering work stoppages or public demonstrations to protest against controversial cutbacks introduced earlier this month.
In a joint letter to members, which is to be issued today, the unions have advised staff not to co-operate with the HSE's plans, which introduce a temporary recruitment ban and a moratorium on promotions, "acting-up" arrangements and the additional use of locum or agency staff.
The unions have sought a meeting of the national implementation body, the main trouble-shooting group under social partnership, to outline their concerns,