Deputy J. Leonard has sought and has been given permission to raise on the Adjournment of the House the subject matter of Question No. 10 on today's Order Paper. Deputy Leonard has 20 minutes.
Adjournment Debate. - Cost of Medicines.
I would like to thank you for the opportunity to raise this matter. I am raising the subject matter of two questions on today's Order Paper which were taken together. Time ran out at 3.30 p.m. and I was unable to pursue them by way of supplementary question. I feel very strongly about the subject and I think it should be attended to by the Department to ensure that lower priced generic drugs rather than the proprietory brands be used more extensively. The questions were:
To ask the Minister for Health if he will make a statement on the action he proposes to take following the GMS report on the increasing cost of medicines in 1984.
and
To ask the Minister for Health the steps he has taken since he received communications from J. A. Long, Administrator, GMS, indicating the saving which could be made if the lowest priced generics in a range of tranquilisers and antibiotics were prescribed.
Those of us who are members of health boards, as I have been for many years, are deeply concerned at the reduction in health services in many areas necessitated by financial constraints. Here was an area in which we were led to believe that substantial savings would be effected in the price of drugs in the years to come.
Let us look at the last report of the GMS and the cost of operating the scheme. Fees and medicine costs have increased by £11.5 million to £98 million. The average number of consultations per panel patient in 1984 was 6.11. It was 5.89 in 1983 and it is expected to be about 6.20 in 1985. This is when we are facing so many cutbacks and restraints in so many essential areas of the health service.
The situation was summed up very well by Mr. Long, Secretary of the GMS Payments Board, in a letter dated 16 January 1985 to the Secretary of the Department of Health, and I quote:
Dear Secretary,
The Board has asked me to convey to you its deep disquiet and dissatisfaction at the absence of adequate means to control the growth of expenditure in the choice of doctor scheme. Every other area of the health services has had to bear substantial cutbacks and be subjected to stringent control.
I wish to concentrate on the drugs area. He continued by saying:
The drugs bill is affected not only by consultation rates but by (i) the price of drugs, (ii) the particular drugs prescribed, (iii) the designation of the drugs prescribed e.g. a proprietory brand or a generic preparation, (iv) the frequency of prescribing in relation to consultations, (v) the number of items prescribed per prescription form issued, (vi) the quantities prescribed and (vii) the drug strengths prescribed.
...it is considered that the margin between the prices paid by the Board and the prices applicable in the United Kingdom is still too high.
...it was shown in an exercise recently undertaken for your Department that if the lowest priced generics in a range of tranquillisers and a range of antibiotics had been prescribed and claimed for in 1983 as much as £1,368,000 could have been saved on an actual ingredient cost of £3,276,800 i.e. a reduction of 42 per cent on these two ranges of drugs.
I have pursued this matter of these generics year after year. The letter continues:
While it is realised that before there could be an insistence towards the prescribing of the lowest priced preparation it would have to be established that the supplier of this preparation had the capacity and commitment to cater for the total market requirement, the exercise does show the wide scope for savings through greater use of generic preparations.
It has been proved that the home based drug companies can provide many drugs at a lower rate and also they would be providing much needed jobs.
I raised this matter in 1982 and following a discussion at the North-Eastern Health Board I received a letter from a drug company which stated that there was a regional hospital in Ireland with an annual medicines bill of £962,000. The company could supply approximately one-third of that hospital's requirement at a lower cost than they were paying then. They went on to say that in the six months prior to that they had sold the hospital £200 worth of drugs. They maintained that if they could get one-third of that business they could employ at least 20 more people. The overall drugs bill was £90 million at that time, and they said they could employ 250 to 300 extra people.
That gives an indication of what could be done in that field. I raised this by way of question because recently other countries have made strenuous efforts to ensure savings on drugs. The Irish Press of Saturday 5 October 1985 contained an article from which I quote:
For the 80 million Americans who use the tranquiliser drug Valium, good news is on the way.
The drug, which currently costs about $25 a bottle of 100, will soon drop to $13 a bottle thanks to new legislation that makes popular drugs available in generic form rather than under any brand name.
Henceforth Valium will be known as Diazepam, its actual chemical name, and it is expected to be a big hit with consumers.
Hoffman-La Roche, who market Valium, had a 17 year exclusive copyright on selling the drug, but now that has run out. Thus, the generic brand of Valium, in addition to generic brands of many other popular drugs, will soon be available at a far lower cost.
That report referred to a country that is the home of drug production and private enterprise. It is better able to afford to pay a high price. I accept that there is a lot of drug abuse there also. Some months ago the British Minister of Health directed health authorities in the UK to ensure that excessive expenditure on drugs does not arise because of adherence by prescribers to costly branded drugs.
This matter has been discussed on many occasions at meetings of the federation of health boards of which I am a member and there has been general acceptance that there is an opportunity to reduce costs substantially. Money is urgently needed in other areas of the health service. I understand that the amount allocated for 1985 under the GMS for drugs was £93 million but in the first two months of this year 20 per cent of that allocation had been taken up. For the same period last year 18.7 per cent of the allocation had been taken up. I have been given to understand that there will be a huge shortfall in funding to health boards under the GMS. If the weather deteriorates there will be a greater demand under that scheme and further funding will be necessary.
It is generally accepted that there is a massive over-expenditure on drugs, particularly on costly drugs. There is a lot of over prescribing.
The Deputy should have a word with his colleague in Cavan-Monaghan.
I am dealing with the cost of drugs. I am concerned about that because in many other areas of the health service, such as the dental and ophthalmic services, there have been severe cutbacks. A few weeks ago a student who was entitled to obtain spectacles under the ophthalmic scheme did not get any benefit because the scheme was not in operation at the time due to a shortage of funds. Many adults who possess medical cards have informed me that because of a shortage of funds health boards are not in a position to permit them avail of free dental treatment. There have been serious cutbacks in the home help service and in the transport scheme. There is adequate evidence to show that if generic drugs were used health boards save a lot of money. There is evidence from Mr. J. A. Long, Administrator of the General Medical Services Board, that it would be possible to make a saving of 42 per cent, £1,368,000. If that amount of money was divided among the health boards for use on the dental or ophthalmic schemes it would be of great help.
In December 1983 I asked the Minister for Health in the course of a question the value of drugs and medicines imported which could be supplied by home manufacturers. At that time the Minister said that the only drugs currently being imported which could be supplied by home manufacturers were generic drugs and it was unlikely that this market exceeded £4 million at present. The Minister went on to say that a wider range or drugs could, in theory, be replaced by generic drugs capable of manufacture by Irish companies. I have made the point that Irish companies are in a position to supply those drugs. The Minister also told me in reply to that question that the value of these drugs would depend on the capacity of Irish companies to produce them and their ability to sell them. There is a ready made market to sell Irish made drugs through the various hospitals and clinics. It is a weak argument to suggest that Irish companies may not have the ability to produce such drugs. We are spending a lot of money on drugs that could be produced by home manufacturers. The Minister should examine this as a matter of urgency.
In most cases the Department of Health are accused of not providing sufficient funds but the Deputy's complaint tonight is that we are spending too much money on a particular item although it is possible that his criticism is justified.
I am complaining about the way the money is spent.
Payments to doctors and pharmacists in respect of fees and medicines in 1984 amounted to £96,251,198. In 1984 the supply of drugs to medical card patients cost £67.8 million. Of this, £13.4 million was accounted for by fees paid to pharmacists and the balance was the ingredient cost of drugs. The average cost per patient was £51.40 for which approximately ten drug items were supplied.
The cost of drugs in the GMS is a product of: the total number of consultations per patient; the number of consultations at which a prescription is written; the total number of items prescribed on each occasion and the choice of item and the quality prescribed on each occasion.
There has been a rise in visiting rates in recent years and this has resulted in an increase in the number of items prescribed. Furthermore, the introduction of new and relatively expensive drugs to the market has had its impact on the GMA. For example, the single most expensive drug prescribed in the scheme in 1984 was introduced in Ireland only three year ago and has a relatively high unit cost.
A number of steps have already been taken to control the cost of drugs in the GMS. Had these steps not been taken the costs of drugs in 1984 and in the current year would have been significantly higher. The exclusion of over the counter items which do not require a doctor's prescription in 1982 resulted in a significant drop in the number and cost of drugs prescribed. These items can be bought without hardship in the vast majority of cases and the annual savings which have resulted from that decision are approximately £8 million to the GMS. This is despite the suggestions which have been made from time to time that more expensive drugs are prescribed in substitution for excluded items. There is no evidence to suggest that this is extensive, or significantly affects the total savings achieved. Under the terms of the Federation of Irish Chemical Industries agreement, which came into force in 1983, the price of drugs supplied on the Irish market is controlled with the result that drug prices may not exceed a differental of 7½ per cent over corresponding UK prices. In addition, new discounts were introduced for sales to the GMS and to hospitals. The benefits of this agreement are worth approximately £5 million per annum to the GMS.
Doctors participating in the GMS are regularly circulated with details of the relative cost of regularly prescribed drugs which demonstrates the desirability of generic prescribing. Furthermore, pharmacists are obliged to dispense from the cheaper, if not the cheapest, range of drugs wherever a prescription is written generically within the GMS. This ensures that the benefits of generic prescribing are in fact realised.
The GMS payments board now supply participating doctors free of charge with a copy of the Drugs and Therapeutics Bulletin every month. This gives independent expert assessment of the relative merits of drugs.
In addition to the regular encouragement of the GMS payments board, new licensing measures have been introduced since October 1984 under which all drugs, generics as well as branded drugs, are subject to exactly the same licensing requirements which are administered by the National Drugs Advisory Board. This is a measure of assurance for prescribing doctors and pharmacists as to the quality, safety and efficacy of generic drugs. My Department have pointed out this particular benefit to representatives of the medical profession in the course of recent discussions.
The exercise carried out by the payments board at the request of my Department showed that significant savings could be achieved if the lowest cost generics were dispensed whenever a range of tranquilisers and antibiotics was prescribed. In fact, savings would represent 42 per cent of the cost in question. However, it must be pointed out that there are doubts as to whether the cheapest drug would be available nationwide on every occasion.
In some places they are.
I am saying that it is doubtful whether they would be. Furthermore, there are very many drugs, especially recently introduced, expensive drugs for which no generic equivalent is currently available.
I accept that.
Therefore, there are limits to the extent of the savings which can be achieved in drug cost through mandatory use of generics. However, my Department are fully conscious of the scope of savings in this area and have been emphasising this matter in the course of negotiations with the medical profession on the future of the GMS. The most effective way of ensuring that there is a significant reduction in drug costs is to tackle all of the components of drug costs outlined above. In particular the prescribing rate itself must be addressed. The report of the working party on the GMS published last year pointed the way forward to a new style of general practice which would be less dependent on drugs and would instead emphasise patient education and preventive work. It also pointed out how doctors could be encouraged to be more cost conscious in their prescribing.
Negotiations have been going on between my Department and the Irish Medical Organisation on a new contract in the GMS which would give effect to this approach and would provide an appropriate context within which generic prescribing would have a prominent place. These negotiations are continuing and it is hoped that they will result in a situation where the scope for economies in the cost of drugs will be realised to the benefit of doctors, patients and the taxpayer alike. My Department's position in these talks has reflected fully the views of the GMS payments board in respect of all of the matters which they raised.
Should the negotiations prove unsuccessful, it will, of course, be necessary to consider alternative methods of ensuring that only what is necessary is in fact spent on drugs prescribed to GMS patients. Clearly, it is more desirable that such reductions be brought about with the full involvement and co-operation of the medical profession but the evidence as to the scope for savings is conclusive.
The Dáil adjourned at 9.30 p.m. until 10.30 a.m. on Thursday, 21 November 1985.