Dáil Éireann debate -
Tuesday, 12 Oct 1993

Vol. 434 No. 4

Written Answers. - FICI Agreement.

Ivor Callely

Question:

184 Mr. Callely asked the Minister for Health if he will give details of the FICI agreement with his Department on drug costs; the savings, if any, that are expected to be made under the new agreement; the savings that were made under the last agreement; and if he will make a statement on the matter.

Minister for Health (Mr. Howlin)

The main element of the previous FICI agreement which operated over the period August 1990 to July 1993 was the linkage of price movements of medicines on the Irish market to the lesser of movements in the UK market and those in a basket of European countries. In addition, the price of any Irish product could not, at the annual price realignment date, exceed the UK price of the same product.

At the commencement of the agreement in 1990, the prices of Irish medicines were reduced by up to 10 per cent and over the course of the agreement, price increases totalling just over 2 per cent were approved.

The new FICI agreement which came into effect on 1 August 1993 builds on the benefits of the previous agreement and provides for further price reductions.

The main elements of the agreement include: — a reduction of approximately 6 per cent in the cost of GMS drugs and a minimum reduction of 3 per cent in the cost of hospital drugs; — a price freeze for a period of four years; — a once-offex-gratia payment of about £2 million; — an explicit recognition of the right of hospitals and health boards to negotiate better terms with individual manufacturers, importers or agents.

These agreements must be viewed as an integral part of my Department's overall drugs strategy aimed at containing the cost of drugs to the Exchequer. It is estimated that the combined benefit of both agreements are a minimum of £25 million per annum.