Mr. Shaun Flanagan:

On what Senator John Crown said about companies trying to represent it as such, we are in scenarios where companies enter commercial negotiations and try to say this and after listening to them, we say very politely that it is all very interesting but that the HSE is not entitled to include it. The Oireachtas has directed us in the legislation that the criteria have been set out, one of which is not foreign direct investment. It is not something we take into consideration, but that is not to say the companies do not include it in letters. However, it is not an issue in a decision.

In terms of parallel trade, Deputy Billy Kelleher made it clear that it was entirely legal across the European Union. If someone wants to parallel import or export, he or she is required to have a wholesale licence. Most countries have elements of parallel trade and in the past when prices were high, this was a parallel importing country when there was an arbitrage opportunity in importing. That parallel exporting is an increasing part of the commentary is an indicator that our prices are dropping and that we are starting to fall below other countries. As recently as 2012, a UK all-party parliamentary group issued a report on difficulties the United Kingdom was experiencing in maintaining supplies of stock as a result of parallel exporting. It is not that this is the only country that has had to consider these issues. As we drive prices lower, it will become an increasing concern. Sometimes a country does not have to be at the bottom of the EU market to engage in parallel exporting. We have become aware of a number of products where parallel exporting has happened and the export country is not at the lowest point in the basket. A country can be unfortunate enough that Germany or the United Kingdom is at a higher level. When this happens and there is a sufficient arbitrage opportunity, specialist wholesalers will export. There is very little can be done to prevent this. We work with the industry in putting in place controls for access to stock and preventing any of these wholesalers from gaining access to Irish stocks. We continue to work closely with the industry on this issue.

The HSE does not buy stock but operates a reimbursement model. We do not own the stock until the day the bill is presented to us - the day after the patient has it. We do not buy stock to be held in a major warehouse; we rely on the standard wholesale and distribution mechanisms the industry has in place to control supply chains. This is consistent with the position in every country in Europe.