Mr. Fergal Goodman:

I have a couple of general comments to make in response to the issues around the agreements. HSE colleagues will be able to pick up on many of the other issues. As I alluded to at the outset, I am not so long in my current post that I have been present through the negotiation of the previous agreements with the pharmaceutical industry. However, all the officials present take their instructions from the Minister for Health and the Government.

The Minister is quite determined to continue to achieve further savings in pharmaceutical costs in order that we will be able to respond to the demographic pressures about which we spoke in terms of the emerging new drugs.

When one talks about previous agreements, how hard people drove at them and the question of how successful we were, one needs to recall that an agreement, by its nature, is the outcome of negotiations between parties with competing positions. Therefore, to reach any agreement, be it in industrial relations or any other business-type context, there must be a compromise, presumably on both sides, somewhere along the line. Thus, the parties reach an agreement that delivers a result for each. Obviously, successive agreements have delivered further benefits and changes incrementally. A current agreement is due to expire towards the end of this year, but consideration is already being given to the objectives and details of what we will be seeking in successor talks. I do not particularly want to elaborate on them today because we are formulating positions.

The other factor that has changed on this occasion is that we now have the benefit of the 2013 Act which gives the HSE significant statutory powers regarding price adjustment. Where it is not deemed possible to reach an agreement through negotiation that is acceptable to the State side, we have the option of using these powers. Obviously, the preferred approach is negotiation. The term "agreement", by definition, represents agreement between parties with a compromise. We are quite clear on the instructions we have received from the Minister. They are quite clear and very much focused on the benefits for the health service, particularly on maximising what we can do with the health budget provided for us by the Government and the Oireachtas.