Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to discuss the Health (Pricing and Supply of Medical Goods) Bill 2012. There was a time when senior company executives travelled exclusively in first class, but no longer. Shareholders are seeking better use of their company funds. Airlines are reducing the space allocated to the first-class brigade, as these sections of the aeroplane are not filling as they once did. These airlines are responding to the market conditions to reduce the space allocated to a product that has low demand and occupancy.

What is notable is that the airline customers are not choosing to avoid travelling, but rather the way they travel in choosing economy class rather than first or business class. The result for customers is still the same - they still arrive at their destination. There was also a time when executives of public service companies used to travel by business class. Thanks to this Government, these are now a thing of the past. Indeed there was a time when Government officials used to also avail of excessive travel perks, both by air and by land. The stakeholders of this country, the people, deserve and demand better. We are all aware of the dubious and excessive use the Government jet was subjected to. Again, and fortunately thanks to this Government, this is now a thing of the past.

I think it is clear that there has been a seismic shift in attitudes and actions since this Government's inception. This shift is based on two simple principles. The first is that we could not condone and continue the outrageous excess of the previous Administration, which was unethical and simply unsustainable. The second point is that the Government has inherited an economic and spending mess. This needs to be addressed and that is why we were elected. This Bill is a part of that process because it addresses overspending in the health sector.

The Bill proposes to allow pharmacists to substitute cheaper medicines for the ones prescribed, if patients agree. It also sets out statutory procedures for HSE supply and reimbursement of medicines and other goods. The overall aim of the Bill is to reduce the cost of pharmaceuticals to the State by promoting competition and achieving greater value for money. No patient will suffer or receive inferior medication. However, using cheaper medication will produce savings for the Government at a time when they are needed.

The Bill aims to increase the use of generic medicines, which are generally cheaper alternatives to brand name or originator medicines. There is broad agreement that generic substitution and reference pricing have the potential to reduce the State's pharmaceutical bill through encouraging greater use of cheaper generic drugs and price competition among manufacturers.

Further savings were achieved this week when the Minister for Health, Deputy Reilly, announced that intensive negotiations involving the Irish Pharmaceutical Healthcare Association, IPHA, the HSE and the Department of Health had reached a successful conclusion with a major new deal on the cost of drugs in the State. The deal is an important step in reducing the cost base of the health system and is further evidence that the Government is firmly committed to address State overruns. The new deal, with a value in excess of €400 million over the next three years, will mean significant reductions for patients in the cost of drugs, a lowering of the drugs bill to the State, greater access to new cutting-edge drugs for certain conditions and an easing of financial pressure on the health services into the future. These results represent a win-win for the State and the people.

The deal is beneficial in two broad ways. Approximately half the financial value is related to reductions in the cost of patent and off-patent drugs, and the other half is related to the State securing the provision of new and innovative drugs for the duration of the agreement in an exceptionally difficult economic climate. The new deal, combined with the IPHA agreement reached earlier this year, means that €16 million in drug savings will be made this year with much greater savings to be achieved in the following three years. It is estimated the deal will generate gross savings of up to €116 million in 2013.

This is the type of forward thinking and decisive action that is needed to haul the State out of its budgetary mess. I applaud the Minister for these enormous savings and in conjunction with the Bill being presented to the House it is a clear sign of the determination of the Government to redress the State's finances. I commend the Bill to the House.

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