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Medicinal Products Prices

Dáil Éireann Debate, Monday - 11 September 2017

Monday, 11 September 2017

Questions (1109, 1277)

Róisín Shortall


1109. Deputy Róisín Shortall asked the Minister for Health the details of the most recent agreement made with an organisation (details supplied) in respect of drug pricing; the duration of the agreement; the estimated annual savings to the State; the arrangements in respect of the funding of new medicines; the savings achieved to date in 2017; and if he will make a statement on the matter. [37860/17]

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Róisín Shortall


1277. Deputy Róisín Shortall asked the Minister for Health the savings that will accrue to his Department in 2018 arising from the agreement with an organisation (details supplied); and the way in which this is accounted for in the fiscal space calculations. [38963/17]

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Written answers (Question to Health)

I propose to take Questions Nos. 1109 and 1277 together.

The new four-year Framework Agreement on the Supply and Pricing of Medicines, signed in July 2016, which is available at is an agreement between the State and the Irish Pharmaceutical Healthcare Association (IPHA), and is expected to deliver approximately €600 million in savings over the lifetime of the Agreement from IPHA companies and €150 million in savings from non-IPHA companies. These savings have been taken into account in the 2017 HSE National Service Plan.

The new Agreement contains a number of features which represent clear additional value over the terms of the previous 2012 Agreement. The reference basket of countries used to set prices in Ireland has been expanded from 9 to 14 countries and, importantly, includes lower cost countries. For the first time, the Agreement provides for an annual price realignment, which will ensure that the prices of medicines in Ireland reduce in line with price reductions across the reference countries. This will ensure the State achieves better value for money on the cost of medicines as prices in other basket countries are adjusted downwards over time. In addition, the Agreement secured a 30% reduction in the price of biologic medicines when a biosimilar medicine enters the market.

At the date of signing, the IPHA Agreement was forecast to deliver savings up to €750 million from IPHA and non-IPHA companies.

The figures were calculated on a full year basis as follows:

IPHA Savings*

Year 1

Year 2

Year 3

Year 4

€120 m

€160 m

€200 m

€270 m

*Figures are rounded and subject to annual review as part of the annual estimates process based on the most up to date pricing data at that time.

The HSE included a savings target of €148m in the National Service Plan 2017 for drug related savings arising from the agreement and the launch of a biosimilar for Embrel in 2016.

As set out in section 6.1 of the agreement the addition of new medicines to the Reimbursement List will be made in accordance with the relevant provisions of the Health (Pricing and Supply of Medical Goods) Act 2013 and by reference to Schedule 1, the Principle and Processes for the Assessment of New Medicines in Ireland. The new agreement is fully aligned with the 2013 Act.

The HSE has been requested by my Department to provide an update on the savings made up to 1 September 2017 in both the Primary Care Reimbursement Service (PCRS) and Acute Hospitals and when this work is complete I will arrange to have detail in this regard furnished to the Deputy.