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Generic Drugs Substitution

Dáil Éireann Debate, Tuesday - 16 July 2013

Tuesday, 16 July 2013

Questions (1136)

Kevin Humphreys

Question:

1136. Deputy Kevin Humphreys asked the Minister for Health the amount that has been saved by using generic drugs in 2013; his plans to ensure further savings are made; and if he will make a statement on the matter. [35398/13]

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Written answers

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 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 €400 million over 3 years. Some €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 €190 million.

The Department of Health and the HSE also successfully 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, since 1 November 2012, the HSE only reimburses 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 requires a generic medicine 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 came into operation on 24 June, will introduce a system of generic substitution and reference pricing. Under the Act, the Irish Medicines Board (IMB) is responsible for the assessment for interchangeability of medicines. The IMB will review an initial 20 active substances, which equates to approximately 1,500 individual medicines. They include statins, proton pump inhibitors, angiotensin-converting-enzyme (ACE) inhibitors and angiotensin II receptor blockers.

It is expected that the first List of Interchangeable Medicines, containing groups of atorvastatin products, will be published in mid-August at which time generic prices will fall by 20%. The IMB will publish subsequent lists for other groups of medicines on an ongoing basis.

The Act also provides that the HSE may set a reference price for each group of interchangeable products published on the List of Interchangeable Products. Reference pricing involves the setting of a common reimbursement price, or reference price, for a group of interchangeable medicines. It means that one reference price is set for each group or list of interchangeable medicines and this is the price that the HSE will reimburse to pharmacies for all medicines in the group, regardless of the individual medicine’s prices. The first reference price is expected to be implemented by November.

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