Michael Healy-Rae
Question:641. Deputy Michael Healy-Rae asked the Minister for Health his views on correspondence (details supplied) regarding the cost of drugs; and if he will make a statement on the matter. [2738/14]
View answerTuesday, 21 January 2014
Questions (641)
Written answers
The State has introduced a series of reforms in recent years to reduce pharmaceutical prices and expenditure. There has been a general price freeze in operation in Ireland for medicines supplied under the community drug schemes since the mid 1990's. These have resulted in reductions in the price of thousands of medicines. Price reductions of the order of 30% per item reimbursed have been achieved between 2009 and 2013; the average cost per items reimbursed is now running at 2001/2002 levels.
Price increases have only been allowed under the national pricing agreements in exceptional circumstances. Approximately 60 products have been granted price increases since 2006. Included in this are essential medicines such as epilepsy medicines and corticosteroids. Price increases are only allowed in extremis to maintain supplies of required medicines in the Irish market and require the provision of detailed supporting evidence including international pricing.
In relation to hydrocortisone, it is appreciated that for an individual patient, the increase in its price is substantial. However, if an increase had not been agreed, the manufacturer was insistent that it would remove the product from the Irish market. If that had occurred, patients would have had to pay for an even more expensive unlicensed product. There is still only a single supplier of hydrocortisone in the Irish market, which suggests that the HSE made the right decision in allowing the price increase in order to maintain supply.
There are no plans to extend the list of conditions covered by the Long Term Illness scheme.
Under the Drug Payment Scheme, no individual or family pays more than €144 per calendar month towards the cost of approved prescribed medicines. The scheme significantly reduces the cost burden for families and individuals incurring ongoing expenditure on medicines.
In addition, people who cannot, without undue hardship, arrange for the provision of medical services for themselves and their dependants may be entitled to a medical card. In the assessment process, the Health Service Executive can take into account medical costs incurred by an individual or a family. Those who are not eligible for a medical card may still be able to avail of a GP visit card, which covers the cost of GP consultations.
The Government is committed to reducing both the State’s drugs bill and the cost to individuals of their medicines. The Programme for Government therefore gave a commitment to the introduction of reference pricing and the increased use of generics.
A number of steps have been taken on foot of this commitment, including: a major new deal on the cost of drugs in the State was concluded with the Irish Pharmaceutical Healthcare Association (IPHA) in October 2012. 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 nine EU member states.
The gross savings arising from this deal will be in excess of €400 million over 3 years. €210 million from the gross savings will be available to fund new drugs.
A new agreement was also reached with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic drugs industry. Since 1 November 2012, the HSE only reimburses generic products which are priced at 50% or less of the initial price of an originator medicine. 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 €148 million in 2014.
The Health (Pricing and Supply of Medical Goods) Act 2013 provides that from June 2013 the price of all new medicinal products reimbursed under the community drug schemes will be set in accordance with the criteria set out in the Act. The Act also provides that the HSE must review all items currently reimbursable under the GMS and other community drug schemes (including prices) within three years to determine if they should remain on the reimbursement list and, if so, what price should apply. In addition, the Act 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.
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 maximum 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 and the second reference price for esomeprazole 20mg products was implemented on 1 January 2014 resulting in price reductions of 70% and 56% respectively compared to May 2013 price.
The HSE expect to implement reference prices for esomeprazole 40mg and rosuvastatin products with effect from 1 February 2014. In addition, the consultation process is also underway in relation to three more groups of medicines which have been designated as interchangeable by the IMB – Omeprazole, Lansoprazole, and Pravastatin. It is expected that reference prices will be implemented for these groups of medicines with effect from 1 March 2014. The HSE will continue the process of setting reference prices for the remaining groups of interchangeable medicinal products published by the IMB in accordance with the processes and timelines set down in the legislation. It is expected that 80% by value of the off-patent market for prescribed medicines will be subject to reference pricing by end 2014. Reference prices will ensure that generic prices in Ireland will fall towards European norms.