Mr. John Hennessy:

Reducing the cost of drugs and medicines is a major priority for us in this year's service plan for the obvious reason that it allows us to reduce our costs while not impacting directly on front-line service delivery to patients. Quite a bit of work is already under way on this, led by Professor Michael Barry and Shaun Flanagan, our chief pharmacist. The recent newspaper coverage of this issue suggests that we have not been using the legislation to reduce costs and that we have not been moving quickly enough on this issue. The reality is that we have been moving as quickly as the Irish Medicines Board designates products as being interchangeable.

To further clarify the situation, the legislation that was passed in the Oireachtas last year requires the HSE to consider each product and medicine according to a number of criteria, of which six are listed. The HSE is further required to provide two blocks of 28 days, sequentially, for consultation and notification. The Irish Medicines Board designates groups as interchangeable on a sequential pattern. The first of those was atorvastatin, which was listed in September 2013, and we are now seeing the benefits of that in terms of reduced price. Others have followed in subsequent months. For example, four products of the ten listed were issued in mid-December 2013. We act on each of those as soon as they become available. We follow the consultation and notification due process procedures laid out in the legislation and the price reductions then follow sequentially. Indeed, a number are now primed to fall due in the very near future. Cost reductions obviously follow from that and the end result is very much on target in that we are going to realise €50 million of savings for the taxpayer in 2014 through reference pricing. Additional savings will be available to members of the public as prices fall in pharmacies.

It is important to note that a balance must be struck in this process so that supply is maintained in the pharmacies. That involves a process of continuous negotiation with the pharmaceutical industry and the suppliers. I wish to acknowledge again the work of Professor Barry and Shaun Flanagan. They are doing excellent work in this area and we look forward to briefing the committee during the course of 2014 on the progress being made.