Dáil Éireann Debate, Tuesday - 17 December 2013
569. Deputy Kevin Humphreys asked the Minister for Health the amount of savings he is targeting to achieve on patented medicines in 2014; if he will fully apply the powers conferred by the Health (Pricing and Supply of Medical Goods) Act 2013; and if he will make a statement on the matter. [53914/13]
View answerNew agreements were reached with the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers in Ireland (APMI) in October 2012. It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013 with an additional €28 million saved in 2014.
The Health (Pricing and Supply of Medical Goods) Act 2013, which came into operation on the 24th of June, introduces a system of generic substitution and reference pricing. 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. It is estimated that this system will yield €50 million in savings in 2014.
Under the Act, the Irish Medicines Board (IMB) is responsible for the assessment for interchangeability of medicines. Generic substitution will be introduced incrementally with the IMB prioritising those medicines which will achieve the greatest savings for patients and the State. The Board is in the process of reviewing 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.
The first List of Interchangeable Medicines, containing groups of atorvastatin products, was published by the IMB on the 7th August. The IMB is updating the List of Interchangeable Medicines on an ongoing basis and it expects to complete the assessment of the top 20 priority medicines by Quarter 2 2014. The process will then continue until all relevant medicinal products on the reimbursable list have been assessed.
Once a List of Interchangeable Medicines is published by the IMB a two stage price reduction process gets underway. First, under the terms of the 2012 APMI Agreement, the price of all relevant products fall by 20%, e.g. atorvastatin prices were reduced from 1st September. Secondly, the legislation provides that the HSE may set a reference price for groups of interchangeable products published on the List of Interchangeable Products with a view to introducing further significant price cuts. Taking both price reductions into account, atorvastatin prices are down 70% since the introduction of generic substitution.
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 for atorvastatin products was implemented on 1 November 2013. The next reference price, for certain esomeprazole products, will be introduced on the 1st January 2014. Reference prices will ensure that generic prices in Ireland will fall towards European norms.
The legislation also includes a process for the review of existing prices outside of reference pricing. Each medicinal product, which was on the Reimbursement List when the legislation was commenced, must be reviewed by the HSE within three years to determine whether it should remain on the List and, if so, the price that should apply.
The Act also provides for the removal of items from the Reimbursement List and for conditional reimbursement of certain products. €10 million savings have been targeted in Budget 2014 from the delisting of products and the HSE is now considering products for review in compliance with the legislation.
