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Medicinal Products Prices

Dáil Éireann Debate, Tuesday - 17 June 2014

Tuesday, 17 June 2014

Questions (631, 636)

Clare Daly

Question:

631. Deputy Clare Daly asked the Minister for Health the reason the Health Service Executive pays in excess of €2 billion for drugs used by medical card holders; and the checks in place to ensure that these persons are being appropriately charged by their pharmacy. [25353/14]

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Clare Daly

Question:

636. Deputy Clare Daly asked the Minister for Health the reason massive price variations exist in prices of generic drugs between different pharmacies; and the action his Department is taking to ensure that those availing of the drug reimbursement scheme are not paying over the odds. [25368/14]

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Written answers

I propose to take Questions Nos. 631 and 636 together.

The cost to the HSE of drugs and medicines supplied under the GMS, Drug Payment and Long Term Illness schemes amounted to 1.61 billion in 2013 and is projected to be €1.56 billion in 2014.

The State has introduced a series of reforms in recent years to reduce pharmaceutical prices and expenditure. 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 per items reimbursed is now running at 2001/2002 level.

A major new deal on the cost of drugs in the State was concluded with the Irish Pharmaceutical Healthcare Association (IPHA) in October 2012. 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 in October 2012 with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic drugs industry. Under this Agreement, the maximum price the HSE paid for generic products was 50% of the initial price of an originator medicine. Recent negotiations with the APMI have resulted in additional price reductions being agreed. From 1 May 2014, the maximum price the HSE will pay for generic products will be 40% of the initial price of an originator medicine. This will result in the price differential between off-patent drugs and most generic equivalents increasing from 5% to approximately 20%.

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 introduced a system of generic substitution and reference pricing.

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. It is expected that referencing pricing will save approximately €50 million in 2014.

In the case of drugs and medicines which are paid for by the HSE, prices are set in accordance with the provisions of the Health (Pricing and Supply of Medical Goods) Act 2013 or the terms of the framework agreements between the Department of Health and the HSE and the representative bodies for pharmaceutical manufacturers in Ireland. However, neither the Minister for Health nor the HSE has any power to set the prices of drugs and medicines purchased by private patients. However, I would be disappointed if all pharmacists were not passing on the benefits of lower prices to patients.

The HSE advises the public that if they are being charged prices which exceed the reimbursement price listed on the HSE website (http://www.pcrs.ie/), plus a dispensing fee of between €3.50 and €5, then they should discuss the differential with their pharmacist to ensure they get the best possible price for the medicine concerned.

In addition, measures have been taken to increase price transparency among retail pharmacies. In March of this year the Pharmaceutical Society of Ireland issued guidelines to pharmacists on procedures and minimum standards of information to be provided to customers, including a requirement to provide an itemised receipt of purchase of medicines.

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