Mr. Shane O'Sullivan:

I thank the Chairman and the members of the joint Oireachtas committee for this opportunity to discuss Healthwave and our experience of innovating in the pharmacy industry in Ireland. Healthwave was founded in 2013 with a simple goal, namely to provide universal access to the best value in medication and care. Healthwave is a retail pharmacy business that caters for all State drug schemes as well as private patients who pay in full for their medication. Since our launch in 2013, we already have 10,000 customers from all over Ireland who regularly travel the length and breadth of the country to benefit from our service.

The pharmacy sector in Ireland has traditionally been extremely opaque, with pricing information near impossible to come by. The most basic change we made when launching Healthwave in 2013 was to publish our prescription prices for everyone to see. The fact that complaints were made by pharmacy owners to the regulator on foot of this action is testament to the reluctance of the industry to inform patients about price. Thankfully, the pharmacy regulator moved to support this transparency, and in 2014 published guidance encouraging other pharmacies to follow suit. Last week I received a receipt from an elderly gentleman who had been charged €100.29 by another pharmacy for olanzapine, a drug for mood disorder. Our price is €19.08. He will save 80%, or almost €1,000 per year. We know people do not have this kind of money to throw around.

Working as a community pharmacist in various stores throughout the country, I witnessed at first hand patients ceasing medication due to cost. It was these stories that led me to launch Healthwave, and with it a new model of pharmacy with universal access to transparent pricing and an unrivalled level of care and convenience. In our first year, we saved our patients well over €1 million. Not only did we save the consumer hundreds of thousands of euro, but we have also saved the State significant expenditure on medication as a result. It is worth recognising that the State plays no role in the prices pharmacies charge private patients. However, I hope to demonstrate that by reducing costs and improving adherence in private patients, the State ultimately benefits with substantial savings.

As I stated, within 18 months more than 10,000 customers from all over Ireland subscribed to our HealthPass service, which is a new business model in Ireland. We operate this business model to provide the best care and value to the consumer. For a small annual subscription fee of €25 customers become members and enjoy a number of benefits, which include access to an average of 50% savings on prescriptions, free home delivery and free house calls from our mobile pharmacist team.

Our retail prices for medicines are substantially lower than other Irish pharmacies and are closer to those seen in Northern Ireland. How do we do this? Very simply, we take a lower margin and dispense a high proportion of generic medication. Healthwave sources its drugs from the same Irish wholesalers as other Irish pharmacies. Generic medications are identical versions of a branded medicine that are released once the branded medicines' patent expires. Generic medicines are cheaper to source and to supply. According to the most recent ESRI report, generic usage in Ireland is low relative to other member states, at approximately 50%. Healthwave’s generic usage currently stands at 90%.

The Health (Pricing and Supply of Medical Goods) Act 2013 introduced the concept of interchangeable medicines, which was a huge leap forward in enabling pharmacists to reduce the cost of their patients' prescriptions. I will give some customer examples. A patient on cardiovascular medications attending a pharmacy in Ranelagh and paying the maximum €144 per month reduced the bill to €49.78 with Healthwave. A breast cancer patient was paying €94.55 in a large pharmacy chain for anastrozole and a calcium supplement. Her bill reduced to €19.08. Receipts supporting these examples are included for the committee’s information.

I will now speak about innovation at Healthwave and two services in particular, which are our mobile pharmacist and home delivery. Patient safety is at the heart of everything we do. Legislation requires face to face consultation between a pharmacist and a patient. While this makes sense from a patient safety point of view, a trip to the pharmacy is not a simple task for everyone. In February, we introduced a mobile pharmacist for our members free of charge. Using our software systems, our team of pharmacists can conduct their consultations in the comfort of the patient's home, with remote access to any clinical information they may require. Anyone anywhere can now access affordable medication.

In 2014 we also launched Ireland’s first home delivery service. Again, safety is our priority with this service. Our technology enables us to track medicines from the moment they leave our store to the moment the patient signs for their delivery. We have delivered medication to every county in Ireland. We place a large focus on technology and have invested heavily in software development which allows us to streamline and improve many outdated and legacy processes, from inventory management to remotely accessible patient records by our mobile pharmacists. Technology is at the core of our business. We will continue to invest heavily in both products and job creation.

Ireland operates a State-subsidised drug scheme, the drugs payment scheme, whereby the maximum any individual or household will pay for medicines in any calendar month is capped. The current cap is €144. Once the cap is reached, the State funds the excess. By reducing the cost of prescriptions Healthwave has brought many patients below the drugs payment scheme threshold. The most recent primary care reimbursement service report shows that 25% of persons eligible for the drugs payments scheme reached the monthly threshold, resulting in a claim to the HSE. In our first year only 1% of our members hit the €144 limit. One patient had been paying the maximum €144 per month for the pain medication Lyrica in a national pharmacy chain. Healthwave reduced her bill to €64.85, a saving for both her and the State.

Non-adherence costs the State. Medication adherence is a measure of whether patients take their prescribed drugs as per the doctor's instructions. The World Health Organization estimates that medication adherence rates for chronic conditions in developed countries are at 50%. In other words, half of prescribed medications are not taken. Non-adherence leads to increased costs in the health care system. Problems with patient adherence to medication were shown to be responsible for approximately 33.3% of preventable drug-related hospital admissions. In patients with chronic disease, such as hypertension and high cholesterol, non-adherence can increase the risk of stroke four-fold and the risk of death three-fold. In the UK it is estimated these admissions alone cost the NHS up to £200 million per year.

Two key factors affecting adherence are cost and convenience. It is estimated that the cost of drugs can reduce adherence by between 10% and 20%. Healthwave has addressed this by lowering the cost of medications by an average of 50%. Our customers travel from as far as Donegal and Dingle to access medication they otherwise could not afford. The ease of access to a pharmacy can also negatively impact adherence, with studies estimating that patients living in highly rural areas were 64% less likely to visit a pharmacy than those in close proximity to one. Recently, a lady from Artane in Dublin travelled by bus across the city to personally thank our team. The week before she read about our service she had decided to stop taking her blood pressure and cholesterol tablets in order to pay her ESB bills. However, with Healthwave’s prices she can now afford both. With our mobile pharmacist and home delivery service, we will ensure this lady, and all of our other members, have an uninterrupted supply of vital medicines.

The pharmacy industry is one which has seen little innovation in 30 years.

Healthwave is demonstrating that the cost of medicines can be dramatically reduced and adherence improved through business model innovation and technology .

I thank the committee for its time. I will be happy to answer members' questions on these and other issues, in greater detail, during the course of the meeting.