Under an agreement reached in October 2012 with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic drugs industry, the maximum price the HSE pays for generic products is 50% of the initial price of an originator medicine. Recent negotiations with the APMI have resulted in additional price reductions being agreed. From 1 April 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% currently to approximately 20%.
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. The first reference price for atorvastatin products was implemented on 1 November 2013 resulting in a 70% reduction in the price paid by the HSE for these products since May 2013. Reference prices for esomeprazole 20mg products and esomeprazole 40mg products were implemented on 1 January 2014 and 1 February 2014, respectively, resulting in price reductions of 56% respectively compared to May 2013 price. Reference prices were also set for rosuvastatin products with effect from 1 February 2014 resulting in a 40% reduction in the prices paid for these products.
With effect from 1 March 2014, the HSE implemented reference prices for a further four groups of interchangeable medicines - Lansoprazole, Omeprazole, Pravastatin - resulting in substantial reductions in the prices the HSE pays for these products. The reference prices are published on the HSE website at http://www.hse.ie/eng/health/hl/Generics/ref/.
In addition, the consultation process is also underway in relation to four more groups of medicines which have been designated as interchangeable by the IMB – Lercanidipine, Pantaprazole, Ramipril and Quetiapine. It is expected that reference prices will be implemented for these groups of medicines with effect from 1 April 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 Quarter 1 2015. Reference prices will ensure that generic prices in Ireland will fall towards European norms.
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, 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.
Finally, my Department has asked the Pharmaceutical Society of Ireland (the pharmacy regulator) to consider how to provide greater price transparency in retail pharmacies. This examination is ongoing.