Health (Pricing and Supply of Medical Goods) Bill 2012: Committee and Remaining Stages

I welcome the Minister of State at the Department of Health, Deputy Shortall, to the House.

Sections 1 to 4, inclusive, agreed to.

Amendments Nos. 1 and 2 are related and may be discussed together.

I move amendment No. 1:

In page 14, subsection (2), line 7, to delete "180 days" and substitute "90 days".

I welcome the Minister of State back to the House. I have tabled a number of amendments to the Bill and I note that one of them has not been accepted. I wish to make the point that my party is supportive of this legislation. We have tabled some amendments upon which we hope the Minister of State can reflect, and we hope she will accept them, even if not today. Perhaps by the time the Bill returns to the Dáil they might be acceptable to her.

In terms of the actual amendment,180 days seems an inordinate amount of time to consider an application. If manufacturers apply for substitution, they may have to wait six months. What if one was dealing with Tysabri or some wonder drug? There is a strong rumour circulating, for example, that there is a wonder drug on the way for the treatment of cystic fibrosis, with near curative powers. The process begins when the manufacturer applies and then, within six months, we have an answer. What we are saying in our amendment is reasonable. Surely 90 days, or half of what the Bill proposes, is ample time to deliberate. Apart from the value for money aspects of this legislation and the fact that we all want cheaper drugs to be available, as the aim is to make newer, potentially more effective drugs available to patients, surely we can reduce the turnaround time. Depending on the conditions being treated, patients may worsen considerably over a six-month period or avoidable fatalities may occur in that timeframe.

Section 5(2) provides that the IMB shall have a maximum of 180 days after receiving an application from the authorisation holder of a medicinal product to determine whether it will add the medicinal product to a specified group of interchangeable medicinal products or refuse to add it. Section 5(3) provides that where the IMB is unable to make a determination under section 5(2) because it requires additional information from the applicant, the board shall give notice in writing to the applicant specifying the additional information it requires from the applicant and the maximum period of 180 days referred to in section 5(2) shall not begin to run until the applicant gives the board the additional information it requires to determine the application.

I appreciate the points made by the Senator but it is important to point out that we are talking about a maximum of 180 days. This is not in respect of new drugs coming onto the market. We do not want to deny people access to new drugs. As this measure relates to interchangeable drugs, the IMB can give careful consideration to that group of drugs that it will determine should be interchangeable. There are many factors to take into consideration in terms of the impacts of the various products, whether they have the same properties and ensuring that they have. If we are introducing a regime where the lowest cost product within a group is offered to a patient then we must be certain that it does what the branded product does and has the same kind of effect. The process does not have to take up to 180 days but, if necessary, and in order to get sufficient scientific information and all of the other information that is required to adjudicate on it then the IMB should be allowed to do that. We expect that in most cases the decision will be taken a lot sooner.

I appreciate that is the case. I very much hope the Minister of State is right and that the turnaround time will be quick. There is always a new drug one might want to get on the list. In terms of existing drugs that is fine but I hope the turnaround time will prove short. I accept what the Minister of State said.

Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Section 5 agreed to.
Sections 6 to 17, inclusive, agreed to.

Amendments Nos. 3 and 5 are related and may be discussed together, by agreement. Is that agreed? Agreed.

I move amendment No. 3:

In page 24, subsection (2), line 14, to delete "180 days" and substitute "90 days".

It is the same situation with the period of 180 days. Again, if the answer is going to be the same we will let it go for now but 180 days is a considerable amount of time, in effect, six months, to get on the reimbursement list, with which we have a difficulty.

The principle is the same as for the first two amendments. It is a maximum period that is set out in the legislation. It is reasonable to allow that period for complex cases but we would expect it to be required in the minority of cases. The turnaround can be a lot quicker than that, providing all the information is available to the IMB. Some of the cases are complex and need careful consideration and access to the full information involved to satisfy the IMB that they are suitable for reimbursement. The intention is that it would happen a lot sooner than 180 days.

I welcome the Minister of State. It might help the House to know that in the United States a generic drug must contain the same active ingredients as the original formulation. According to the US Food and Drug Administration generic drugs are identical or within an acceptable equivalent range to the brand name counterpart with respect to the pharmacokinetic and pharmacodynamic properties.

I agree with the Minister of State that the quicker we can do this, the better it will be. If the United States has a definition which is identified - I accept it has gone off patent - and easily ascertainable, I might be even more optimistic than Senator Marc MacSharry and seek a period of less than 90 days. It appears that the process in this regard in the United States is quite rapid. I agree with both the Minister of State and the Senator that the position should be the same here.

I take the point. However, there are circumstances in which a period of more than 90 days may be required. Obviously, it is in everyone's interests that these decisions be taken as soon as possible. That would be the intention. There is a very definite benefit for the State in bringing generic substitutes onto the market and making them reimbursable because this will help to reduce the overall cost of the drugs bill. There are incentives to do this, but in the light of the careful consideration in which the IMB must engage, it is reasonable to set a timescale of 180 days which will, of course, be a maximum.

Amendment, by leave, withdrawn.

I move amendment No. 4:

In page 24, between lines 25 and 26, to insert the following subsection:

"(3) The Executive shall, within one month of the enactment of this Bill, publish clear and detailed guidelines setting out—

(a) the criteria that shall form the basis for the Executive’s decision to add an item to the Reimbursement List, and

(b) the criteria which shall form the basis for the Executive’s decision to refuse to add an item to the Reimbursement List.".

We find ourselves in an unusual situation in that we are supporting the legislation in the interests of ensuring cheaper drugs will become available as quickly as possible. However, we do have a number of concerns about the Bill. In that context, I ask the Minister of State to consider its compliance with the European Council's transparency directive. As I am sure she is aware, the said directive requires the publication of objective and verifiable criteria for deciding whether something should be made available. We are concerned that the legislation is in breach of the directive. The Attorney General has obviously adjudicated on that matter, but the position should be examined further. Perhaps this could be done between now and the introduction of the legislation in the Dáil.

The amendment suggests that within one month of the enactment of the Bill clear and detailed guidelines setting out the criteria that shall form the basis for the executive's decision to add an item to the reimbursement list and the criteria which shall form the basis for its decision to refuse to add an item to the list should be published. The amendment is important and would bring the legislation into line with the directive. In addition, it would ensure people would have confidence in the system and how it worked. I may comment further on this issue when we come to deal with a later section. The amendment is important both in the context of ensuring compliance with the transparency directive and with regard to underpinning the integrity of the legislation.

I welcome the Minister of State. Sinn Féin supports the Bill. My party has not tabled amendments at this point, but we are considering a number of possible amendments which we may table in the Dáil. We support the Bill because any measure which leads to the State saving considerable amounts of money must be welcomed.

I support the notion of putting in place clear and detailed guidelines setting out the criteria to be used in deciding why drugs will either be added or not added to the reimbursement list. I await the Minister of State's reply as to why that may not be possible. In the interests of transparency and accountability, it would be good if people were informed of the exact criteria that would apply. In that context, it would be welcome if guidelines such as those suggested in the amendment were published. I highlight the fact that we intended to table amendments in respect of this matter and that we may well do so either on Report Stage in this House or in the Dáil. I endorse the amendment tabled by Senator Mark MacSharry, the logic behind which is to achieve greater transparency in the system.

Part 4 of the Bill sets out the statutory procedures relating to the supply of and reimbursement of the cost of medicines and other items to patients under the GMS and the community drug schemes. Section 19 sets out the action to be taken by the executive where it makes a relevant decision under section 18, that is, to either add or refuse to add an item to the reimbursement list.

Section 19(4) provides that in making a relevant decision under section 18, the executive is required to have regard to the criteria set out in Schedule 3 to the Bill. This Schedule sets out three categories of criteria to which the HSE must give consideration in making pricing and reimbursement decisions. The first category includes criteria applicable to medicinal products, the second comprises criteria applicable to medical devices, foodstuffs for particular nutritional uses and dietary foods for special medicinal purposes, and the third sets out the general overarching criteria to which the executive shall have regard in making a relevant decision under section 18. In other words, Schedule 3 already provides criteria covering a broad range of issues which must be taken into account before a decision is made in terms of adding or declining to add an item to the reimbursement list. For example, the general overarching criteria require that the HSE has regard, among other issues, to the health needs of the public, the cost-effectiveness of meeting those needs by supplying the item concerned rather than providing other health services, and the efficacy, effectiveness and added therapeutic benefit of the item as against existing standards of treatment. In these circumstances and given that the Bill is entirely compliant with the transparency directive, as verified by the Office of the Attorney General, I do not propose to accept the amendment.

I take the Minister of State's point. Nevertheless, I propose to press the amendment on the basis that the Bill would be improved by having this matter dealt with clearly in the main body of the text.

Amendment put and declared lost.
Amendment No. 5 not moved.
Section 18 agreed to.
Section 19 agreed to.
Question proposed: "That section 20 stand part of the Bill."

As we made clear during the debate on the Access to Cancer Treatment Bill 2012, which we brought forward in this House, there are concerns that the process for gaining access to particular medicines and treatments seems very obscure and secretive. There is little or no transparency for patients in regard to decisions as to whether or when a product will be made available. This is particularly distressing for patients when the decision is that a particular treatment is not to be provided. That is why we sought, in amendment No. 4, to ensure there would be clear criteria in this regard.

I accept that there must be some boundaries and parameters and some level of discretion for the executive. That is merely common sense. However, section 20 defines protocols in regard to the supply, quantities and periods of availability of medicines as well as restrictions on the purposes for which they can be prescribed and the classes of prescribers. This means, for example, that a situation could arise whereby only consultants in St. Vincent's and St. James's hospitals are permitted to prescribe a particular treatment. While I accept that such a scenario is highly unlikely, that type of vast power is being given to the executive under this section, without any recourse for patients or stakeholders. To reiterate, we support the legislation and have not tabled an amendment to this section. We are arguing, however, that in the interests of patients, a clear process should be defined which would ensure transparency in the matter of access to drugs. Patients should not be left in fear that by way of some obscure and secretive decision-making process, they will be denied access to treatment.

One of my amendments was ruled out of order on the basis that it would involve a cost to the Exchequer. However, the entire Bill is concerned with costs to the Exchequer.

My concern is that while we all want cheaper drugs for patients, somewhere in the provisions in section 20 the health of the patient will be sacrificed in the interests of saving costs. When one sees the pressures on the Department, the default position for the decision maker will be to find an angle so as not to make a certain drug available. What protocols will be put in place? Will it be like the joke in that a certain drug will only be available to all people accompanied by both parents over 90? Will there be terms and conditions for particular drugs which happen to be expensive so that it will only be available in a few scenarios?

There are previous examples of this with drugs such as ipilimumab. After patients highlighted how it was not available on the Joe Duffy show and had the Seanad up in arms about it, the Government said it would ultimately make it available. The buck needs to stop with the Minister. While difficult decisions have to be made – the Minister is no stranger to this – we need to have a starting point that all drugs are available but the health service can opt out of a drug’s availability based on proper and reasonable criteria such as pharmoeconomics and those contained in the Schedule. The new drug for treating cystic fibrosis which is rumoured to be very effective should be made available in Ireland subject to terms and conditions which are reasonable.

In fairness, this Bill does not provide a process for stakeholders or the patient directly to get involved in the process. Where is their recourse? Will they still have to go the Joe Duffy route or lobby Oireachtas Members to get the provision of a certain drug on the agenda? Rather than providing the Health Service Executive, HSE, with a set of tools to opt out of the provision of a drug due to financial pressure, maybe we should examine a process whereby all drugs are available and there will be opt-outs as is necessary. There certainly has to be an opt-out clause on costs and other criteria. I hope the Minister of State will consider these points with her officials.

I take the point made by Senator MacSharry that there needs to be transparency around the decision-making in this area. The criteria are set down clearly in Schedule 3. The overriding consideration has to be patient safety. However, we have no option but to consider other criteria as well with cost effectiveness and whether the use of a particular drug will ensure a person does not have to use other health services. These are all set out in the Schedule.

To have some kind of feedback on the process involved where a decision is taken whether to sanction a product or otherwise is a reasonable suggestion. I am happy to examine this before we take the Bill to the Dáil. In the interests of transparency, it would be helpful if there was a determination and people had access to the basis for that determination. I take issue, however, with the Senator’s suggestion of making every drug available and then withdrawing items. The reality is that new medicines are extremely costly. Every action taken in the health service has a reaction because there is a limited budget. We do not even have a fixed budget but a diminishing one.

If a decision is taken to approve a particular drug which is very expensive, it means the money must come from elsewhere in the health service. Often these are the life and death decisions that must be taken within the Department of Health.

A task force to examine patient safety and quality in prescribing has recently been set up under the chairmanship of the chief medical officer in the Department of Health. All of these wider considerations are being examined to ensure we have a system in place that takes decisions based on the best interests of the patient concerned and the wider public as well. These are difficult decisions to take and we need a good deal of data on various aspects of the drugs to feed into them.

This is part and parcel of the situation relating to the overall drugs bill, which, at approximately 16% of total health spending, is not sustainable. I have stated previously that if we are to make room for new and expensive drugs coming on the market and we want to make these available to people as quickly as we can, space must be provided within the drugs spend, which means reducing the cost of existing drugs. That is the reality. There is no easy way out of it and there is no pot of money that we can dip into. There are direct implications in respect of the limited funding available for the health service generally. I take the point and I am happy to consider it before we bring the legislation to the Dáil to determine whether we can have feedback and greater clarity about why the HSE comes to the decisions it does in respect of some of these products. I thank the Senator for the suggestion.

I want to make a broad point but I am sticking to the section. I accept what the Minister of State says in respect of the balance that must be struck in terms of new drugs that come on the market, the cost of these drugs and the overall health budget. I welcome the statement that where possible and practical these drugs will be made available to the people who need them. If we are to make these costly drugs available we must achieve savings somewhere.

We have one issue of concern in respect of this Bill in its totality. We welcome the deal struck with the Irish pharmaceutical industry in respect of branded drugs but we believe there is still scope for savings in respect of generic drugs, which are often rather expensive. In some cases they cost 96% of the price of a branded drug. A deal has been struck in respect of branded drugs, which is welcome, but we are somewhat surprised that the Minister has said it will save between €30 million and €40 million because last year the projections were between €60 million and €70 million. I am unsure why there has been a reduction, but none the less a considerable saving will be made. The question arises as to why this has not been extended to generic drugs, because they too are costly. A survey by The Sunday Business Post showed that HSE patients here were paying up to 12 times what patients under the UK National Health Service were paying for the same drugs. Clearly issues arise that relate not only to branded drugs but to generic drugs as well. We must do more in respect of savings on drugs. While the Bill is a welcome step forward, I hope this is not the end of the process. It should be only the beginning of a process of seeking to achieve savings in this area.

I wish to pick up on Senator Cullinane's point. The price decay graph is a trade term used in the case of generic drugs. Typically, the graph flattens out at approximately 20% of the original brand price, representing an 80% reduction, which would be welcomed by the Minister of State and everyone in the House. This appears to be much larger than any figure mentioned. I regret that there was no regulatory impact statement with the Bill because this would have allowed us to know the extent of these savings, which would have helped the Minister of State in her quest to drive them. In her speech on 19 July when she introduced the Bill on Second Stage, the Minister of State, Deputy Lynch, referred to a saving of €34 million in 2011 from a bill of €2.3 billion. That is only 1.5%, and I have heard elsewhere that we were getting reductions of only 2% on generic drugs.

Is that sector now beginning to protect itself in the same way that the patented drugs sector did at the beginning? At least the latter group had the excuse that it was doing very valuable research.

I am worried by a reference in section 24(4), which states that "the Executive may use a competitive process". Perhaps, arising from what Senators have said, the Minister of State might consider amending that on Report Stage so it provides that "the Executive shall use a competitive process". These people will not compete unless they are compelled to do so. If this sector sees that the HSE "may use a competitive process", it will state "Thanks very much".

The gains seem to be very large. I hope we are getting them from both patented and generic drugs. If we can achieve reductions of up to 80%, it will relieve an awful lot of the problems in the health service. If it is necessary to make people compete in order to attain that, I will support an amendment to that effect on Report Stage.

I fully agree with the sentiments that have been expressed. I hope we are moving in that direction. The pricing regime for medicines in this country has traditionally been complex. It is difficult to understand, frankly. As Senator Barrett has said, in many cases generic substitutes are no more than marginally cheaper than the branded product. All of that is covered by earlier agreements. It is impossible to understand how those agreements came about in the first place. For that reason, the substitution rate is extremely low. There is no incentive to substitute if there is no significant saving. That needs to be addressed, obviously, especially as a number of big branded drugs that are widely used are coming off patent in the coming months.

The agreement with the Irish Pharmaceutical Healthcare Association that was mentioned by Senator Cullinane is an interim one. Discussions are under way to reach a final agreement. We are hopeful that significant progress will be made in that area. Equally, I absolutely agree with Senator Cullinane that we need to achieve a much better deal with generic suppliers. Talks with the generic companies are in process. We are moving on both of those fronts. There is a need to achieve new and much more cost-effective agreements. That, with what is being done in this legislation, will have a significant long-term impact on the drugs bill. I am glad to inform the Senator that an impact assessment has been carried out and can be viewed on the website of the Department of Health.

Question put and agreed to.
Sections 21 to 23, inclusive, agreed to.

Amendment No. 6, in the name of Senator MacSharry, is out of order because it involves a potential charge on the Exchequer.

Amendment No. 6 not moved.
Question proposed: "That section 24 stand part of the Bill."

I would like to suggest to the Minister of State that the word "may" in section 24(4), which states that "the Executive may use a competitive process", should become "shall" when the Bill is considered on Report Stage. It is a proposal for the next Stage rather than an amendment for this Stage.

We did not receive notice before now of the Senator's intention to table such an amendment. I will consider the matter. I do not want to indicate that it will receive a positive response. It will be considered before the Bill is debated in the Dáil.

Question put and agreed to.
Sections 25 to 36, inclusive, agreed to.
Schedules 1 to 3, inclusive, agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

I thank the Minister of State for coming to the House. While we have reservations about certain aspects of the Bill, I welcome the fact that the Minister has agreed to reflect on those between now and the Bill returning to the Dáil, without actually giving any commitment as such. We look forward to the Bill being passed in the other House so that we can see the results of it.

I also thank the Minister of State. This is very important legislation and I hope we will see a very significant impact and significant savings, which obviously can be put to good use throughout the health services. I welcome the assurance from the Minister of State that the passing of this legislation will not in any way inhibit the bringing of new, more effective, medicines on stream quickly. Obviously, in order to be able to provide such medicines, we need to make savings elsewhere. In that context, this Bill is a very significant step along the right road. I applaud the Minister of State and thank her for her attendance today.

I echo those sentiments. An article in the American Journal of Health-System Pharmacy states, "To be effective, drug-cost management efforts should be planned and executed as a continual process, not just as a brief annual exercise when the budget is prepared and provided to hospital administration". We are embarking here on something that is very important and I commend the Minister of State.

I found another interesting piece in the Economic Policy journal, which states, "If health insurance is to benefit fully from generic medicines, it ought to encourage faster uptake and price competition, and discourage price-fixing regulation that ties generic prices to those of originator brands". This Bill could be a major step forward in terms of necessary reform of the health service. Once again, I commend the Minister of State.

I would also like to congratulate the Minister of State. This is very important legislation, as everyone in the House agrees. I would also like to commend the Minister of State for her openness in accepting the suggestions of Senator MacSharry, some of which are worthy of consideration, particularly with regard to section 20. We live in the age of the Internet and very few patients today who go into a doctor's surgery depend solely on the expertise of the medical profession in the way that they might have done 20 or 30 years ago. People are very aware that certain drugs are available and it is important that when they approach the medical system, they know they are getting the best possible consideration. This is particularly the case for patients suffering from cystic fibrosis and other serious illnesses. It is important that there is openness, transparency and clarity as to why drugs are or are not available to patients. I welcome the Minister's openness to considering that matter further.

I thank all Members for their input into the debate and for their co-operation in the smooth passage of the legislation. It is important that we get the Bill through the Houses of the Oireachtas as soon as possible. I wish to say a special word of thanks to officials of my Department who have been working on this legislation for some time. It is very complex legislation but it is very far-reaching and will undoubtedly have a very positive impact. This legislation has been promised for many years and I am pleased that this Government is now giving effect to the commitments in the programme for Government to reduce the cost-base in the health service.

It is important legislation that will ensure we get much better value for money. It will also ensure much better value for consumers, which is an important point, and also for the State. Savings made in the medicines area will free up critical funding in order to invest in other life-saving aspects of the health service. I thank everyone involved for their input and co-operation.

Question put and agreed to.
Sitting suspended at 4.25 p.m. and resumed at 5 p.m.