Mary Harney (Dublin Mid West, Independent)

The cost of the GMS scheme, including payments to pharmacists and general practitioners, in 2010 is projected to be more than €2 billion. The rate of increase, an average of 12.5% each year over six years, in the cost of supplying drugs and medicines is not sustainable. The number of prescriptions issued under the GMS increased by almost 4 million between 2004 and 2009 to more than 16 million. The number of items dispensed during this period increased by more than 15 million to just over 50 million. The average number of items per script has also increased from 2.74 in 2004 to 3.11 in 2009.

Section 1 provides for the amendment of section 59(1) of the Health Act 1970, which requires the Health Service Executive to supply drugs, medicines and medical and surgical appliances to persons with full eligibility without charge. This will be amended by section 1(a) to provide that, where prescription items are supplied by a community pharmacy contractor, they shall be subject to the charges as provided for in subsections (1A) and (1B)(a) subject to the exemptions provided for in subsection (1C).

Subsection (1A) provides that a person who is supplied by a community pharmacy contractor with a drug, medicine or medical or surgical appliance on the prescription of a registered medical practitioner, registered dentist or nurse who is entitled to prescribe shall be charged 50 cent per item. It also provides that any variation in this amount may be determined by regulations subject to certain conditions, set out in the amended subsection 59(4) of the Act.

Subsection (1B) provides that the maximum amount payable by a person and his or her dependants in any month will be €10. In addition, provision is made for the HSE to refund, credit or otherwise relieve any amount paid in excess of the maximum aggregate amount. Any variation in the maximum aggregate amount will be determined by regulations subject to certain conditions, set out in the amended subsection 59(4) of the Act.

Subsection (1C) provides that two classes of persons will be exempt from the charges. These are children in the care of the HSE under the Child Care Acts, 1991 to 2007, and persons who are supplied with specific controlled drugs such as methadone. The section also provides for the making of regulations to exempt other classes of persons from charges, subject to certain conditions, set out in the amended subsection 59(4) of the Act. The prescription charges will not be payable by holders of long-term illness cards. In addition, charges will not apply to persons who are covered by the Health (Amendment) Act 1996, that is, persons who contracted hepatitis C through the use of certain blood types.

Subsection (1D) provides that, notwithstanding the contract between community pharmacists and the HSE, the amount paid to a community pharmacy contractor by the HSE will be reduced by an amount equal to the amounts collectable by that contractor in charges. The amount collected in charges will be retained by the community pharmacy contractor. Subsection (1E) provides for a definitions of "community pharmacy contractor" and "dependant" for the purposes of section 59(1).

Section 1(b) inserts a technical amendment relating to the existing subsection 59(2).

With regard to the conditions for the making of regulations, section 1(c) replaces the existing section 59(4) and provides in the new 59(4)(a)(i) and (4)(b) that, in deciding whether to make regulations to vary either the amount of the charge per item or the aggregate monthly amount, the Minister will have regard to such of the following, as considered appropriate: information on the consumer price index; information on expenditure and the number of items prescribed to medical card holders; the medical needs and financial burden on persons who avail of the services; and the necessity to control health service expenditure.

Section 1(c) also provides in the new section 59(4)(a)(ii) and (4)(c) that, in deciding whether to make regulations specifying classes of persons to. be exempt from the charges, the Minister will have regard to such of the following, as considered appropriate: the medical condition, disability or medical needs of persons in that class; the number of the prescription items required in respect of those medical needs; information on expenditure and the number of items prescribed to medical card holders generally or in respect of the specific class; the necessity to control health services expenditure; and whether the overall financial situation of the proposed class is worse than that of other persons who are charged for items supplied on prescription.

Section 1(c) also provides in the new 59(4) (iii) that the Minister may make regulations relating to refund, credit or other relief arrangements where he or she considers it necessary. Section 1(c) provides that regulations made under section 59 shall be made with the consent of the Minister for Finance.

Section 2 provides for the Short Title, construction, collective citation with the Health Acts and commencement. The Bill is part of a set of actions the Government has taken or is taking to address increasing costs in the general medical services, GMS, scheme. These actions include the introduction of off-patent price cuts, reductions in wholesale and retail mark-ups and the introduction of generic substitution and reference pricing. Significant progress has been made in recent years to improve value for money in the area of pharmaceutical expenditure. Off-patent price cuts have been implemented and wholesale and retail mark-ups have been reduced. As a result of off-patent drug price reductions in February, the cost of prescribed medicines measured by the Central Statistics Office as part of the consumer price index dropped by more than 12% in that month alone. Discussions are under way with manufacturers of generic medicines and lower prices for them are expected to be introduced in September this year.

Despite these reforms, pharmaceutical expenditure continues to pose a challenge because of our ageing population and increased usage of medicines. Further changes are required to secure a sustainable system of pharmaceutical expenditure while, at the same time, ensuring patients can continue to access necessary and innovative medicines. On 17 June last, I published a report on the proposed model for the substitution of generic medicines and reference pricing. Generic substitution and reference pricing represent significant structural change to the system of pricing and reimbursement of medicines in Ireland. As more medicines come off patent, the introduction of generic substitution and reference pricing will ensure both taxpayers and patients will benefit from increased competition in the pharmaceutical market.

Giving patients more choice and promoting price competition between suppliers will help reduce the overall drugs bill without compromising the efficacy or safety of the treatment that patients receive. Savings will be achieved by limiting reimbursement to the reference price, allowing patients to opt for less expensive versions of the prescribed medicine and promoting price competition between the manufacturers of interchangeable medicines. The savings will be dependent on a range of factors, including the number of medicines included in the reference price system, prescribing practices and the behaviour of manufacturers of interchangeable medicines. The system will be introduced on a phased basis and, therefore, savings will be achieved on the same basis. An expert group will provide guidance on which medicines can be safely substituted. Exemptions will be required in some instances for individual patients for clinical reasons, for example, if a patient has difficulties swallowing.

The maximum monthly amount payable under the legislation is €10 per family. Payment of the maximum amount will only arise where a family receives 20 items or more in a month. In 2008, just over 2% of medical card families had 20 or more items per month prescribed to them. More than 35% of families had no items prescribed, while almost 18% had one or two items prescribed. It is expected, therefore, that only a small minority of medical card families will have to pay the €10 per month maximum charge. Based on trends in previous years, it is expected that the prescription charges will yield €24 million in a full year.

I expect that the primary care reimbursement service of the HSE will roll out the charging system from 1 September. Once the legislation is passed, my officials, the HSE and representatives of the pharmacy contractors will enter into discussions to make this happen. Some adjustments to the IT systems both in the HSE and on the pharmacy side will have to be made to allow for implementation, including calculation of data to provide for refunds. Issues such as how often refunds will be made, for example, on a quarterly basis, will be worked out. I do not expect this will have a significant ongoing resource implications in terms of cost or staffing. I will keep the implementation and the impact of the changes under constant review. As I said in the Seanad last week, I will report back to both Houses of the Oireachtas and the Joint Oireachtas Committee on Health and Children. I commend the Bill to the House.

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