Dáil Éireann Debate, Thursday - 16 July 2015
482. Deputy Terence Flanagan asked the Minister for Health his plans to reduce medication costs; the reason there is a large discrepancy between the costs here and in other European countries; and if he will make a statement on the matter. [29710/15]
View answerThe Government has introduced a series of reforms in recent years to reduce the prices of drugs and medicines which are paid for by the HSE. This has resulted in reductions in the price of thousands of medicines. Price reductions of the order of 30% per item reimbursed were achieved between 2009 and 2013; the average cost per items reimbursed is now running at 2001/2002 levels.
The State's current drug pricing agreement with the Irish Pharmaceutical Healthcare Association (IPHA), which commenced in October 2012, continues to 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 nine EU member states (Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Spain, and the UK), and these are the maximum prices paid by the HSE for originator drugs supplied through the community drug schemes. The gross savings arising from this deal will be in excess of €400 million over three years. Over half of the savings to be delivered - €210m - were to be reinvested by the State into the provision of new and innovative drugs.
Consideration is now being given to a range of options available to the State in seeking to deliver further savings on the cost of drugs. Such options include entering into a new Agreement with IPHA, as well as the possibility of using the legislative powers afforded to the HSE under the Health (Pricing and Supply of Medical Goods) Act 2013 to review and alter prices.
Officials in the Department of Health are currently working with their colleagues in the HSE and the Department of Public Expenditure and Reform to ensure that the State achieves the best possible deal in terms of future price reductions on the cost of medicines. I am confident that a new arrangement will be put in place which will ensure that further price reductions are achieved for the benefits of patients and the taxpayer.
The continued implementation of generic substitution and reference pricing, as provided for under the Health (Pricing and Supply of Medical Goods) Act 2013, is also contributing to reducing the cost of medicines. Reference pricing has generated over €47 million in savings in 2014, and is expected to deliver a further €25 million in 2015. Reference pricing will ensure that generic drug prices in Ireland continue to fall towards European norms.
It is worth noting that the prices of drugs vary between countries for a number of reasons, including different prices set by manufacturers, different wholesale and pharmacy mark-ups, different dispensing fees and different rates of VAT. The size of the market can also be a factor in the prices set by manufacturers.
