Dáil Éireann Debate, Wednesday - 7 November 2012
206. Deputy Joe Carey asked the Minister for Health the position regarding the price paid by the Health Service Executive for drugs which are out of licence; if measures are being taken to reduce this price; the way price compares with other countries; and if he will make a statement on the matter. [48990/12]
Amharc ar fhreagraI take it that the Deputy is referring to drugs which no longer have patent protection. The prices of such drugs vary between countries for a number of reasons, including different prices set by manufacturers, different wholesale and pharmacy mark-ups, different dispensing fees and different rates of VAT.
Following intensive negotiations with the Irish Pharmaceutical Healthcare Association, IPHA, the Department of Health and the HSE have reached agreement on a major new deal on the cost of drugs in the State. The main provisions of the new Agreement are as follows:
- With effect from 1 November 2012, the ex factory price of all patent protected medicines reimbursed in Ireland prior to September 2006 will be realigned - downwards only - to the average of the basket of nine countries (Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Spain, and UK).
- With effect from 1 November 2012, the ex factory price of all patent expired medicines which do not have a generic equivalent on the Irish market will be realigned - downwards only - to the average of the basket of 9 countries.
- With effect from 1 November 2012, the ex factory price of all patent expired medicines which have a generic equivalent on the Irish market will be reduced to 60% of the original price. With effect from 1 November 2013, the price will be reduced to 50% of the original price.
- In the case of medicines which go off patent after 1 November 2012, the ex factory price will drop to 70% of the original price as soon as a generic equivalent comes on the Irish market. After 12 months, the price will be reduced to 50% of the original price.
- With effect from 1 January 2013, the ex factory price of medicines introduced to Ireland after 1 September 2006, will be realigned - downwards only - to the average of the basket of 9 countries.
The deal will deliver a number of important benefits, including
- significant reductions for patients in the cost of drugs,
- a lowering of the drugs bill to the State,
- timely access for patients to new cutting-edge drugs for certain conditions,
- reducing the cost base of the health system into the future.
This deal, combined with an interim agreement reached with IPHA in the summer, means that €16 million in drug savings will be made this year. It is estimated that the deal will generate savings of up to €116 million in 2013, €136 million in 2014 and €150 million on 2015.
The Department and the HSE have also completed discussions with the Association of Pharmaceutical Manufacturers in Ireland, APMI, which represents the generic drugs industry, and have secured similar reductions in the price of drugs supplied by AMPI member companies.
The Health (Pricing and Supply of Medical Goods) Bill 2012, which is currently before the House, provides for the introduction of a system of generic substitution and reference pricing. It aims to promote price competition among suppliers and ensure that lower prices are paid for medicines resulting in savings for taxpayers and patients. It should lead to an increase in the rate of generic prescribing, thus generating further savings in drugs expenditure in the years ahead.
