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Drugs Payment Scheme Expenditure

Dáil Éireann Debate, Wednesday - 19 December 2012

Wednesday, 19 December 2012

Questions (30, 34)

Peadar Tóibín

Question:

30. Deputy Peadar Tóibín asked the Minister for Health the consideration he has given to the proposal to benchmark the ex-factory price of medicines at the lowest rather than the average of comparable European states; if he accepts that this is the practice in a number of other EU member states; if he accepts the projected savings figure cited of €280m; and if he will make a statement on the matter. [57028/12]

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Barry Cowen

Question:

34. Deputy Barry Cowen asked the Minister for Health the reason drug prices remain high here relative to other countries; and if he will make a statement on the matter. [57062/12]

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Written answers

I propose to take Questions Nos. 30 and 34 together.

The prices of drugs vary between countries for a number of reasons, including different prices set by manufacturers, different wholesale and pharmacy mark-ups, different dispensing fees and different rates of VAT. In recent years, a number of changes to the pricing and reimbursement system have been successfully introduced in Ireland. These have resulted in reductions in the prices of thousands of medicines. Following intensive negotiations involving the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health, a major new deal on the cost of drugs in the State was concluded in October last. It 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.

The gross savings arising from this deal will be in excess of €400m over 3 years. €210 million from the gross savings will make available new drugs to patients over 3 years. Thus, the deal will result in a net reduction in the HSE expenditure on drugs of about €190m. The Department of Health and the HSE have also successfully finalised discussions with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represent the generic industry, on a new agreement to deliver further savings in the cost of generic drugs. It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013. The IPHA agreement provides that prices are referenced to the currency adjusted average price to wholesaler in the nominated EU member states in which the medicine is then available. The prices of a range of medicines are due to be reduced on 1 January next in accordance with the agreement. The Health (Pricing and Supply of Medical Goods) Bill 2012, which is currently before the House, provides for the introduction of a system of generic substitution and reference pricing. The Bill provides that when the HSE is setting a reference price for, or reviewing a reference price set for, a relevant group of interchangeable medicinal products it shall take into account the following criteria: the ability of suppliers to meet patient demand for the relevant item; the value for money afforded by the relevant item; the equivalent prices of the relevant item in all other Member States where the product is marketed; the prices of therapeutically similar items; and the resources available to the HSE.

It is important to balance achieving best value for money for the taxpayer with assuring continuity of supply for critical medical products, particularly in a small market like Ireland. Consequently, the Bill aims to achieve value for money while avoiding disruption in the availability of medicines on the Irish market.

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