Mr. Finian Judge:

I thank the Chairman and committee members for the invitation to discuss the report on evaluating orphan drugs. I am accompanied by Mr. John Hennessy, national director of acute strategy and planning; Mr. Shaun Flanagan, chief pharmacist in the corporate pharmaceutical unit; and Professor Michael Barry, clinical director of the National Centre for Pharmacoeconomics.

In March the Department of Health received the committee's report on evaluating orphan drugs. The report included a number of significant recommendations related to the assessment and reimbursement process for orphan drugs. Some of the recommendations concerned the policy and statutory framework underpinning the process, with the remainder focused on the evaluation and reimbursement process, including the clinical criteria deployed in that evaluation.

I note that the 2013 Act is very comprehensive and provides for a range of important matters, including the criteria to which the HSE must have regard when making reimbursement decisions on new medicines. The Act includes provisions on interchangeable products, rules for the establishment and maintenance of reimbursement lists and provisions on reference pricing. In its report the committee focused on that part of the Act which provided for the evaluation process for new medicines proposed for inclusion in the reimbursement list.

Since the publication of the committee's report, the Department has been engaging with the HSE and the NCPE to address the recommendations contained in it on the framework and process for assessing orphan drugs. In this contribution I will address those recommendations directed to the Minister for Health or the Department. My colleagues from the HSE and the NCPE will address the recommendations on the evaluation and reimbursement process, including the clinical criteria pertaining to evaluation. Under statute that function is vested in the HSE.

The Minister is satisfied that the Oireachtas has put in place a robust legal framework in the Health (Pricing and Supply of Medical Goods) Act 2013 for the assessment and reimbursement of medical goods. The Act provides the HSE with full statutory powers to assess and make decisions on the reimbursement of all medicines and includes detailed criteria to which the HSE is required to have regard when making those decisions. The Act puts in place a clear statutory framework by which new products must be assessed by the HSE and ensures decisions are made on an objective and scientific basis. It provides for a fair, transparent and rigorous process for the assessment of all drugs and has delivered tangible results for patients. The Minister is satisfied that there are no legislative barriers to the reimbursement of orphan drugs, as distinct from any other drug, and is further satisfied that the rules pertaining to the assessment of all drugs do not discriminate against orphan drugs. In fact, the criteria which apply to the evaluation process contained in Schedule 3 to the 2013 Act provide sufficient scope for the HSE to take on board the particular circumstances of orphan drugs. My colleagues from the HSE and the NCPE can elaborate further on that matter.

In its report the committee, rightly, identified that drugs were increasingly being developed to target very rare conditions and that these drugs often came with a very high list price. Under the Act, the HSE is required to have regard to the funding challenges these drugs represent. It does so by drawing on the criteria contained in the Act, including the potential or actual budget impact of the drug in question and the cost-effectiveness of meeting health needs by supplying a particular item, rather than by providing other health services. These are difficult decisions, but they recognise the core challenge presented by the availability of finite resources in the face of ever-competing demands.

The committee recommended the appointment of an independent person to conduct a review of the current process and its role in orphan drug availability. The Department is preparing to undertake a review of the governance arrangements applying to the internal HSE process. The review will examine the systems, structures and resources which support the decision-making process for reimbursement.

In its report the committee also expressed support for collaboration with other EU member states. The Minister is very much in agreement with that notion. In fact, the challenge of accessing innovative medicines at an affordable price is one shared by most, if not all, developed countries. Demographic change will have to be managed, with a continually growing pipeline of new and innovative medicines, many of which will come with asking prices that risk making them unaffordable or unsustainable. It is estimated that approximately 45 new molecules are due to receive market authorisation in Europe in each of the next five years. It is in this high technology space which includes orphan drugs that the greatest challenges will arise in the years ahead.

Already, expenditure under the high technology arrangements through which the majority of new high cost medicines, including orphan drugs, are funded has increased, from approximately €400 million in 2012 to close to €700 million this year. That level of growth is a major challenge for the Government and the HSE and a reason Ireland is working with other countries in Europe to develop common solutions to a universal problem. A significant development since the publication of the committee's report has been Ireland joining the BeNeLuxa initiative on pharmaceutical policy in June. This collaboration will support the Minister's objective of co-operation with other EU member states to identify workable solutions in an increasingly challenging environment. As the committee acknowledged in its report, this is a long-term strategy. However, it is one we expect will complement existing domestic policy in this area.

While the Department has not undertaken a formal review of the Act in its entirety, it has, in conjunction with the HSE and the NCPE, considered in detail the committee's report and the recommendations contained therein. There has been substantial engagement between the Department, the HSE and the NCPE on each of the recommendations. I am pleased to note, as well as the policy developments I have outlined, that a number of significant changes have been made within the confines of the Act at operational level in the assessment and reimbursement process to address a number of the recommendations made in the report.

I will hand over to my colleagues from the HSE and the NCPE to elaborate on the operational developments.