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Madrid to apply one-euro charge on drug prescriptions

MADRID (Reuters) - The region of Madrid said on Wednesday it would introduce an unpopular one-euro surcharge for medical prescriptions next year as pressure mounts on Spain's cash-strapped regions to curb deficits.

The plan is part of Madrid's efforts to save some 2.7 billion euros ($3.5 billion) in next year's budget, Madrid regional president Ignacio Gonzalez told a news conference.

Opponents to the surcharge say the reform will mean the most vulnerable, especially the elderly who are often dependent on several prescriptions, will avoid basic care to save costs.

Madrid, which surrounds and includes Spain's capital and accounts for almost a fifth of Spain's economy, will be the second of the 17 regions to introduce the payment, after Catalonia in June.

The regions are under pressure to cut their deficits to 0.7 percent of output in 2013 from a target of 1.5 percent this year as part of the country's drive to balance its accounts.

Spain is the latest weak link in the euro zone debt crisis amid investor concerns the conservative government cannot control its finances in the midst of a prolonged recession.

The regions control over a third of total Spanish spending and are responsible for their own health and education costs.

Madrid missed its deficit target last year, hitting 2.2 percent of its GDP compared with the official target of 1.3 percent. While the region's finances are generally better than many of its counterparts, sour market conditions forced it postpone a planned bond issue on October 23.

Gonzalez also said he would outsource non-health-related hospital services and the health services of six recently-built clinics, fuelling criticism the conservative government was working toward privatization.

Spain's public health care system until last year provided free medications for pensioners and low-cost prescriptions for everyone else. The government says the system encourages over-prescription and inefficient use of state resources.

A co-payment system for prescription medicine, linked to income and economic status of the patient, was introduced earlier this year.

The one-euro surcharge will apply to most prescriptions.

(Reporting by Inmaculada Sanz; Writing by Paul Day; Editing by Andrew Roche)