I announced on the 15th October, 2012 that intensive negotiations involving the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health had reached a successful conclusion with 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 1st 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 9 countries (Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Spain, and UK).
- With effect from 1st 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 1st 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 1st November 2013, the price will be reduced to 50% of the original price.
In the case of medicines which go off patent after 1st 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 1st January 2013, the ex factory price of medicines introduced to Ireland after September 1st 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; and 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 €116m in 2013, €136m in 2014 and €150m on 2015. A breakdown of savings by scheme is not currently available. The cost of new drugs over the next three years is estimated to be €210 million.
This landmark deal with IPHA comes as legislation aimed at reducing the cost of generic drugs makes its way through the Oireachtas. The Health (Pricing and Supply of Medical Goods) Bill 2012, which will introduce a system of reference pricing and generic substitution, is a priority for this Government. It is expected that this Bill will be enacted before the end of the year and will deliver further savings in the costs of medicines for the health service and private patient.