Mr. Shaun Flanagan:

There is no doubt but that this area is challenging. Pharmaceutical companies are private corporations and have responsibilities to their shareholders and so on. It is important for a state to have robust processes. We have a health technology assessment which is carried out by the National Centre for Pharmacoeconomics, NCPE. We also have a commercial negotiation process and an independent drugs group, which reviews the outputs of the assessments and the negotiation processes. Any unmet need is considered. The clinical evidence, cost effectiveness and budget impact are considered. The final decision maker in the HSE is the executive management team. There is now board oversight of that. It is one of the areas at which the board looks.

We would like to get more efficient in getting through drugs quicker but we feel we do address some of the excesses that are tabled in respect of price. I will give the committee a feel for some of that. In 2021, the HSE approved 29 new medicines and 21 new uses for existing medicines. The commercial negotiations and health technology assessment process took away €398 million in costs over the next five years for those medicines. The difference between what the pharmaceutical companies originally tabled for those 29 new medicines, 21 new uses for existing medicines and two extensions and what was finally agreed was €400 million over five years. That is one part that may give the committee some assurance in that regard.

Our corporate pharmaceutical unit, the part of the HSE that leads on commercial negotiations, has gone back and conducted a review of the 134 drug group recommendations which were received between July 2016 and May 2021. Of those 134 recommendations, 46 of the drugs involved had orphan designation status at the time of the drugs group review. The original cost effectiveness estimate, which is driven on the one side by cost and by benefits on the other side, was that 78% of those orphan-designated drugs received a drugs group recommendation. Of those, 31 were subject to a full health technology assessment. Of those 31 drugs, 21 had an incremental cost-effectiveness ratio, ICER, which is a cost per quality-adjusted life year, in excess of 100,000 before the negotiations took place. In the final assessment after the negotiations were completed, only nine of those drugs had an ICER of more than 100,000. That shows that even in the space of orphan drugs, the negotiation process makes a significant difference in respect of the price that the State is paying.

Under the standard cost-effectiveness measure, something is regarded as cost effective if it satisfies a cost-effectiveness ratio of 45,000 per quality-adjusted life year. For the orphan drugs, four of the 31 with positive recommendations satisfied those criteria before negotiations and 18 of them could be deemed cost effective after the negotiations. The process makes a difference and saves the taxpayers a substantial amount of money. More importantly, that enables the HSE to stretch the money it has as far as possible to provide access to as many medicines as possible. I hope that gives the Deputy some context.