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 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 were reduced on 1 November 2012 and further price reductions were implemented on 1 January 2013 in accordance with the agreement.
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 and the HSE also finalised discussions with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic industry, on a new agreement to deliver further savings in the cost of generic drugs. Under this Agreement, from 1 November 2012, the HSE will only reimburse generic products which have been priced at 50% or less of the initial price of an originator medicine. In the event that an originator medicine is priced at less than 50% of its initial price the HSE will require a generic price to be priced below the originator price. This represents a significant structural change in generic drug pricing and should lead to an increase in the generic prescribing rate.
It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013.
The Health (Pricing and Supply of Medical Goods) Act 2013, which was commenced on the 24 of June, provides for the introduction of a system of generic substitution and reference pricing. The Act 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 Act aims to achieve value for money while avoiding disruption in the availability of medicines on the Irish market. This legislation will promote price competition among suppliers and ensure that lower prices are paid for these medicines resulting in further savings for both taxpayers and patients.
At present, pharmacists are not required to publish their dispensing and other fees. However, under the Pharmaceutical Society of Ireland’s (PSI) Code of Conduct, pharmacists are required to provide honest, relevant, accurate, current and appropriate information to patients regarding the nature, cost, value and benefit of medicines provided by them. Every pharmacist has an obligation to comply in full with the statutory Code of Conduct.
The PSI advises patients that their pharmacist should be in a position to provide them with whatever information or clarification they require about prescribed medicines, including information about the pricing of those medicines. The Department of Health has asked the PSI to examine how greater price transparency can be achieved. It should also be noted that the Health (Pricing and Supply of Medical Goods) Act 2013 provides patients with an incentive to seek products priced at or below the reference price.
It is the view of the HSE and the Department of Health that there should be total transparency provided when any pharmaceutical service is accessed by a member of the public.