Billy Kelleher (Cork North Central, Fianna Fail) | Oireachtas source

I welcome everybody. We acknowledge and welcome the improvements that have been made in terms of value for the taxpayer when medicines are being purchased on behalf of the State. It is obvious that demographic factors will present huge challenges from now on. The witnesses mentioned the increase in life expectancy and the improvement in the treatment of chronic diseases. We are probably slow to address some of the issues that will lead to an increase in the prevalence of chronic diseases in the years ahead. Obesity and smoking will lead to an increase in diabetes, heart conditions and smoking-related illnesses. We are making efforts, but maybe we are not gaining as much ground as we would like. High-tech medicines that are tailor-made for small cohorts of people are also becoming more prevalent. There will be huge pressures in the years ahead.

I would like to take a slightly historical view of these issues for a moment to help me to get my head around them. I applaud the HSE and everyone else responsible for the progress that has been made. The 2006 reductions agreement generated savings of approximately €250 million. A further €250 million in savings was generated by agreements reached in 2010 and 2011. That leads me to believe there was a great deal of fat in the system. Perhaps the question I will ask in that context will be asked by another Oireachtas committee at some stage. Was there that much fat in the system because of a lack of political will, or because appropriate mechanisms were not in place? Was the State being jockeyed by the Irish Pharmaceutical Healthcare Association and the Association of Pharmaceutical Manufacturers of Ireland on a constant basis in terms of the cost of available medicines? What allowed the HSE to reduce the price of medicines to the State by such an enormous amount in such a short period?

Was it lack of regulation or lack of legislation? Was it the comparators with the nine European countries in the basket? Was it lack of political will or was it just the inability of the State to negotiate? One would have to say that the savings made suggest that there was a poor negotiating stance in the first place. I am not making a statement of fact but just inquiring on that issue.

The other area that is of concern to me, if I have understood correctly, is that if a company applies for reimbursement of its on patent new drug, the nine European countries are used as a basket. If the drug is not available in those nine European countries, is it correct that it is to a minimum of three countries? Is there huge potential for companies to manipulate the price? Let us be very clear, if there are nine countries, there is a better chance that there will be an average, but if a company is going to make its drug available and knows that the price is going to be based on three countries, it will obviously make it available to the dear ones first and work out from that. Is there not a huge flaw in the system there in terms of pricing? The average will always come from the highest down as opposed to from the other way up or from the middle. I would like further clarity on that. If that is the case, who decides, first and foremost, the basket of countries and who decides which three countries the medicine will be made available in first? It is obvious it will be the companies. There is quite a weak area in the mechanism of adjudication of the price. Is that a regulatory matter for the European Union or is it a State matter? Where do we go in terms of trying to address that weakness in pricing?

As an aside to Mr. Flanagan on Soliris for the treatment of PNH, I am led to believe that the Government, the Department or the HSE has made an announcement that Soliris will be made available to individuals with PNH but I am also led to believe it is not available yet. Soliris has been referenced quite a number of times and reference has been made in Parliament that this issue has been resolved, but I am led to believe that it may not be resolved for the people who are waiting for it so I would like clarity on that issue.

I have raised this issue without saying that it is factual but there has always been a strong belief among some people that there have been sweetheart deals in this State for many years, with some drug companies in previous times being induced to invest further or locate here in the first place, perhaps by the IDA and others or through back channels, and it is obvious the reason they come here is our corporation tax rate. We have a politically stable environment, we have a reasonably bright graduate workforce and we now have a critical mass, so I accept that there are many other factors why they are here. However, there was always a view in the earlier part of industrial development policy that there were inducements other than the obvious attractions the State provides upfront. Has Mr. Flanagan ever come across that particular issue or those suspicions in terms of dealing with various pharmaceutical companies and the pricing of same?

In terms of cross-Border and the continual fluctuations in sterling versus the euro and, in particular, how it is fluctuating now, is there any way of addressing the issue of people in the North coming South or vice versawhen it suits or when it is more profitable?

I want a small bit of information on parallel wholesaling where if a drug is cheap in Ireland, it is purchased in Ireland through the wholesale system and sold into the dear countries. Is this done by pharmacists? We all know about the free movement of goods and services but if a product is sold to the State, one would think that it should stay in the State and not be shipped out in containers to some other country. Is there a weakness there as well in the context of parallel wholesaling through the European Union countries?