Mr. Shaun Flanagan:

I addressed the challenge in my initial responses to the Senator's question. There are two good points at which we can impact on the cost of medicines. The first is on introduction, because we control when we put it on and ultimately control the price in a negotiation. The learning historically is if one does not challenge companies when one introduces medicine, one pays for that over a decade or longer while the company has patent control. Within our medicine containment policies, an essential part is we must challenge companies when they are applying for reimbursement. We must do our best to attack unreasonable and unfair pricing. If we do not do that, we will be left in a scenario in which we are overpaying for medicines for a decade.

The second point is when a medicine goes off patent. There is then an opportunity because suddenly competitors come in. The competitors can be leveraged in and within that the reference pricing and generic substitution can impact. Within the agreement, as we moved from 2006 to 2016, we moved from a scenario where we had a five-country basket to one where there is an average of 14 countries, which is very close to what the previous committee recommended. That basket now includes countries such as Portugal, Italy and Greece, which are low price countries. That impacts on the price of the medicines that are coming to us and has a long-term life cycle impact on the price of medicines. We have made very good efforts to reduce the cost of medicines both at the start and at all the trigger points where we have leverage. There can always be improvements.