Eight companies that procure medicines and medical equipment or provide related services generated 55.7 million euros in net profit over the previous three years and held more than 70 million euros in undistributed profit at the end of last year, according to data released by Action for Social Justice (ASP). The organisation said undistributed profit may be held as cash, assets or receivables and is a key indicator of a company’s strength.
The companies employed 582 people at the end of last year, while paying a total of 8.5 million euros in corporate tax over the three-year period, ASP’s figures show. Several also distributed a combined 15.5 million euros in dividends to their owners.
Net profit margins varied widely last year, from below 5% at some companies to 18% and 34% at others. ASP said some firms recorded margins close to 7% or around 8%. For one company, the owner would retain about 7,000 euros a day after tax on a dividend based on last year’s business results, the organisation said.
ASP said the figures demonstrated high profitability in the medicines and medical equipment sector, and pointed to similar results in trade. Its previously published data showed that eight leading trading companies made 132 million euros in net profit over three years and had 228 million euros in undistributed profit at the end of last year.
The organisation has raised concerns about market concentration in medicines, saying public discussion sometimes focuses on reducing value-added tax rather than the existence of monopolies. It also said citizens have “for years paid among the most expensive medicines in the region.”
ASP warned of rising prices for food, medicines, construction materials and housing, as well as higher interest rates, and voiced concern about another wave of inflation before a wage-increase programme due to begin early next year. The government has said it plans to limit retail margins on basic food items from the start of next year, while a trade union has called for immediate restrictions covering all goods and services.
