Written Answers. - Drugs Costs.
Ruairí Quinn
Question:
13
Mr. Quinn
asked the
Minister for Health and Children
the reason drugs cost for the GMS are expected to exceed the estimate for 2002 by 30%; his plans for the wider use of generic drugs; and if he will make a statement on the matter.
[22904/02]
The latest information provided to my Department by the General Medical Services (Payments) Board indicates that drug costs for the GMS are expected to increase by 29% this year. Ingredient costs and prescription costs are each running at approximately 15% higher than last year. A number of factors can contribute in any year to the rising cost of drugs for the GMS. These factors include an increase in the number of medical card holders and an increase in both the cost and volume of drugs and medicines available for prescribing. The number of people with a medical card has increased from 1,199,454 at 31 December 2001 to 1,200,162 at 1 August 2002. The year 2002 is the first full year in which persons over the age of 70 years are automatically entitled to a medical card.
The price of drugs and medicines, ex manufacture, in Ireland has been subject to control since 1972 through formal multi-annual agreements with the Irish Pharmaceutical Healthcare Association, IPHA – formerly the Federation of Irish Chemical Industries, FICI. Under these agreements, the maximum price to the wholesaler of any new item of medicine introduced to the market and covered by the agreement shall not, on the date of notification, exceed the currency adjusted UK wholesale price or the average of a basket of EU countries, whichever is the lower. A price freeze is also in place in regard to the prices charged for existing products. The current agreement has been extended to mid-2005.
A common list of reimbursable medicines was introduced for the general medical services scheme and the drug payment scheme on 1 July 1999. This common list is subject to ongoing review and amendment on a monthly basis as new products become available and deletions are notified. Many of these new drug treatments are more expensive than existing treatments and are patent protected so that generic substitution is not possible. The total number of items prescribed under the general medical services scheme in 2001 was 25,656,314, of which 5,363,002 or 20.9% were generics.
Since 1 January 1993 general practitioners have been allocated an annual target budget for expenditure on drugs for their GMS patients under the indicative drug target saving scheme. Targets are determined by national norms and form part of an agreement between my Department and the Irish Medical Organisation. In an attempt to limit the escalation of the annual costs of GMS drugs, general practitioners participating in the scheme are permitted to accrue savings under this scheme which can then be used to fund general practice developments at their practice premises for the benefit of their patients. Applications for funds from this scheme must be formally approved by the local health board in advance of payment by the GMS (Payments) Board.
A review of the scheme undertaken by Professor Michael Murphy, which was published in July 1997, found that there were changes in prescribing behaviour as a result of the scheme. Some doctors made savings through enhanced prescribing of generic medications and there were no discernible negative effects on the overall quality of prescribing.
I inform the Deputy that the Department has placed a contract with Deloitte & Touche to conduct a consultancy review of the governance and accountability in the general medical services schemes. The terms of reference for the proposed review are: to analyse the governance and accountability mechanisms in the general medical services schemes and payments made by the GMS (Payments) Board on behalf of health boards; to examine the roles and responsibilities of the Department of Health and Children, the Eastern Regional Health Authority, health boards and the GMS (Payments) Board in this context; to examine the underlying reasons for increasing cost trends in the general medical services schemes; to validate the latest estimated outturn for 2002 and assess its implications going forward and to make recommendations for the immediate resolution of any identified weaknesses and inadequacies. An interim report has been received from Deloitte & Touche outlining its findings in relation to the validation of the estimated outturn for 2002. A full report is expected shortly.
