James Reilly (Dublin North, Fine Gael)
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The recently enacted Health (Pricing and Medical Goods) Act 2013 provides for the first time a radical change in the way prices are set and will lead to benefits for patients and the State finances. The legislation will promote price competition among suppliers and ensure that lower prices are paid for these medicines resulting in savings for taxpayers and patients. The Irish Medicines Board has commenced the process of reviewing an initial 20 groups of medicines, which have been prioritised on the basis that they cost the most to the State and patients, for inclusion in groups of interchangeable medicines.

The 2013 Estimate also provides for further reductions to professional fees paid to GPs and pharmacists under the Financial Emergency Measures in the Public Interest, FEMPI, Act 2009. Overall, these reductions will save approximately €70 million in a full year, savings which the Government believes are both necessary and proportionate. In the case of GPs, fees are being reduced by 7.5% overall, which will deliver savings of €38 million in a full year. The retail mark-up paid to pharmacists under the drug payment scheme, long-term illness scheme and other schemes is also being eliminated. This equates to a reduction of 7.67% in the average State payment to pharmacists and will save an estimated €32 million in a full year. It can be seen, therefore, that we did not just impose a straight across-the-board cut. We did it in such a way as to get rid of perhaps some of the historical anomalies in the system.

With regard to capital investment between 2013 and 2017, suitable and appropriate facilities are required to provide safe and cost-effective health care. Recent capital investment has brought about a significant improvement in the standard of facilities across all care programmes. Nevertheless, a significant proportion of the health care infrastructure is old and, therefore, generally unsuitable for contemporary health care delivery. This need is recognised in our programme for Government which states that "health capital spending will be a priority". Preparations are proceeding for the development of the new national children's hospital on the campus of St. James’s Hospital. In May, I also announced the relocation of the National Maternity Hospital to the campus of St. Vincent’s University Hospital. This addresses a key recommendation in the 2008 KPMG independent review that Dublin maternity hospitals should be located alongside adult acute services. Co-location of maternity hospitals with adult acute services is the optimal solution for the provision of hospital-based maternity services.

There was significant investment of taxpayers' money in health services during the good years but there has not been the improvement that the people have a right to expect. It is clear that if money could have solved this problem, having quadrupled the capital spend over 18 years, it should have been achieved before now. Reform is required and our reform agenda, while ambitious, will be delivered. The challenge over the next year will be considerable with between €800 million and €1 billion in savings required to enable us to maintain services and implement reforms.

I thank the Chairman and the committee for their attention and I commend the Estimates for the health group of Votes to the committee. I will be glad to supply any further information or clarification that members may request.