Dáil Éireann Debate, Wednesday - 13 July 2022
502. Deputy Colm Burke asked the Minister for Health his views on whether medicines pricing and intellectual property rights are unrelated, with pricing determined by national governments through industry negotiations and intellectual property rights set through international trade agreements as incentives for innovation; and if he will make a statement on the matter. [38284/22]
Amharc ar fhreagraWhile the pricing of medicines is not considered to be fully unrelated to intellectual property rights, particularly in the context of monopoly suppliers, pricing determination remains a national competency. The European Commission has developed an intellectual property rights framework to encourage and sustain innovation by the pharmaceutical industry in developing new medicinal products. For the case of medicines, Supplementary Protection Certificates are available to extend patent protection for medicinal products whereby several years have passed while clinical trials were underway and in advance of receipt of a marketing authorisation. The framework ensures that a return on investment is achievable if a product makes it to market and ensures the continued investment by the pharmaceutical industry in the development of new and innovative medicinal products.
Specific to the setting of prices in Ireland, the Health (Pricing and Supply of Medical Goods) Act 2013 is the primary legislation that governs medicine pricing and reimbursement procedures and policies. Under the 2013 Act, the Health Service Executive (HSE) has the power to set the relevant reimbursement prices for certain medicinal goods. Section 21(2) of the 2013 Act sets out the factors that the HSE must take into account when setting the relevant reimbursement prices proposed by the supplier of a medicine, which are as follows:
(a) the equivalent relevant prices (if practically available) of each item in all other Member States where the item is marketed, (b) the relevant prices of therapeutically similar listed items, (c) the potential therapeutic benefits in each case, (d) the budget impact of each item, (e) the ability of suppliers to meet demand, (f) the resources available to the Executive, and, (g) any agreement on pricing in place with industry
The HSE has also agreed and set out standard processes with industry in relation to the assessment of pricing and reimbursement applications for medicines. In that context, the 2021-2025 multiannual agreements with the Irish Pharmaceutical Healthcare Association (IPHA) and Medicines for Ireland (MFI) represent an important step in reducing the cost of medicines and improving access to innovative new medicines for patients.
Although the use of the Health Act 2013 remains a viable option for the State in managing drug expenditure, it is accepted that there are wider benefits to maintaining a collaborative and cooperative approach with industry to the supply and pricing of medicines while the terms of such framework agreements continue to deliver for all stakeholders.
The new deals will deliver improved access for patients to new and innovative medicines, reductions in the cost of existing medicines and an easing of financial pressure on the health services into the future. It is estimated that this will result in the state paying between €600 million and €700 million less for medicines than it would otherwise.
As part of a pricing and reimbursement application for a new chemical entity, the manufacturer submits a price application form (PAF) for a medicine it wishes the HSE to include on its reimbursement list / for hospital pricing approval. Under the IPHA agreement, the price included in the PAF must be no more than the average price based on 14 nominated states. The states include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom (UK). This is referred to as external reference pricing (ERP) whereby the price in a ‘basket’ of reference countries is used to derive an acceptable price.
For generic and biosimilars, reimbursement is automatically approved, provided the pricing is in line with the generic and biosimilar (and hybrid) pricing framework/agreement. The pricing of such medicines is linked to the price of the originator or patented medicine.
HSE decisions on which medicines are reimbursed are made on objective, scientific and economic grounds, on the advice of the National Centre for Pharmacoeconomics (NCPE). The NCPE conducts health technology assessments (HTAs) for the HSE and makes recommendations on reimbursement to assist HSE decisions. The NCPE uses a decision framework to systematically assess a drug's clinical and cost effectiveness as a health intervention.
The HSE Corporate Pharmaceutical Unit (CPU) is the interface between the HSE and the Pharmaceutical Industry in relation to medicine pricing and reimbursement applications. The purpose of challenging the pharmaceutical company pricing is to arrive at a position of value for money. In doing so, resources are used as effectively as possible to reimburse a wide range of medicines.
