Joe Sherlock (Cork East, Labour)
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Question 55: To ask the Tánaiste and Minister for Health and Children her views on the State's €65 million bill for drugs and medicines in hospitals and in the community which is significantly ahead of expectations; if her attention has been drawn to the fact that in six of the country's major acute hospitals, drug costs increased by an average of 19%; her plans to address these rising costs; if she has plans to encourage use of generic drugs; if so the way in which she intends to do so and the timescale of this plan; and if she will make a statement on the matter. [15472/06]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The financial report to the board of the Health Service Executive in respect of the cumulative expenditure to end December 2005 highlighted the growth in expenditure on drugs and medicines of €65 million over the 2004 expenditure level. This represents an increase of 13% on a total expenditure figure for 2004 of €500 million on both major hospitals and the community drug schemes. This expenditure excludes the cost of drugs and medicines provided to medical card holders under the GMS scheme. The growth in expenditure is attributable to increased patient numbers and the introduction of new drug treatments.

I have previously expressed concern about the increasing cost to the Exchequer of drugs and medicines and the sustainability of trends in this regard. It is essential to secure maximum value for money for this expenditure. All aspects of the drug delivery system, from the manufacturer to the patient, are being reviewed by my Department and the Health Service Executive. A number of possible measures to address the rapidly rising medicine costs being incurred by the State are being considered. These include greater access to generic drugs and supply chain costs such as pharmacy mark-ups.

I stress that no single measure will contain the rate of increase in expenditure on medicines and drugs. International experience has shown that this is a very difficult task, as the sophistication and range of treatments continue to increase along with increased expectations on the part of patients.

On the specific issue of generic drugs, it is my intention to give patients and ultimately the taxpayer, as the biggest buyer of medicines, better access to generic drugs where this is possible and appropriate. Negotiations are currently under way with the Irish Pharmaceutical Healthcare Association and the Association of Pharmaceutical Manufacturers of Ireland, on a new national pricing and supply agreement for the supply of medicines to the health service. The agreement covers all reimbursable prescription medicines in the GMS and community drug schemes and all medicines supplied to hospitals and the HSE. It is intended to address the issue of access to generic drugs within this new agreement.

Liz McManus (Wicklow, Labour)
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I thank the Minister for her reply. I assure her the Labour Party will be keen to support her in any move towards the use of generic drugs, so long as it is reasonable.

Is it not possible for the Minister to ensure that generic drugs are prescribed more often by GPs to those patients who are not GMS patients? The GMS scheme currently encourages the use of generic drugs. What is stopping the Minister from ensuring that the same principle is applied to private patients of GPs? The Minister has stated she is considering a number of options. Does this include a cap on very expensive drugs? Will she comment on the fact that some new drugs are extremely expensive and that a cap on their use is applied in other countries? Is she considering its application here?

Mary Harney (Dublin Mid West, Progressive Democrats)
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No. These are very controversial areas and they are probably more appropriate for those with medical expertise. I am aware that many countries have protocols regulating when particular drugs may be used, for example, drugs that can cure as opposed to drugs used for an incurable illness. We have not considered going down that road as it is a very sensitive issue. In the first instance it is the intention to get better value in the whole supply chain, whether it is from the manufacturers' piece or the wholesalers' piece or the pharmacy piece. There cannot be a situation whereby we are paying the same price for a drug when it is off patent as when it was on patent. The patent should cover the innovation and I am a strong fan of supporting innovation in the pharmaceutical sector. Innovation is extraordinarily expensive. Many of the innovations never turn into products that can be sold and huge sums of money can be spent in the process. It is clearly a very expensive investment for pharmaceutical companies. I believe the patent period covers the innovation costs and the profits companies are entitled to expect. Therefore when a drug is no longer a branded product I do not believe we should pay anything like that price. This is the approach being taken by the HSE with the Department in these negotiations. Some considerable work has been done by the pharmo-economics division of Trinity College, Dublin, and others in assisting the HSE in this regard.

The Deputy makes an interesting point about private patients. We used financial incentives to encourage GPs to prescribe on the medical card. It is a good idea which we should examine.

Liz McManus (Wicklow, Labour)
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When will we get a chief pharmacist?

Issues have arisen from time to time regarding scarcity of drugs and the unavailability of certain drugs through pharmacies. This matter has been raised with the Tánaiste. In recent months, drugs which I suspect are more expensive but are not licensed in the same way as the original drug, have been substituted because drugs are not available on the market. I know the Minister is a great supporter of the market but the market does not always deliver and from time to time, quite important drugs have not been available. How is the Tánaiste dealing with this matter?

Mary Harney (Dublin Mid West, Progressive Democrats)
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In answer to the question about the chief pharmacist — until we can pay a public sector salary commensurate with what the market regards as reasonable we will find it considerably difficult. This has been the experience when the Department recruited some professionals in recent times. It is a real issue because of the salaries being earned in the private sector. In some of these areas we rely on retired persons coming back on a part-time consultative basis. I am currently in discussion on the matter and I hope to be able to say something about it later.

The drug industry is not quite like the market elsewhere in that prices are negotiated with governments which can vary from one country to another. This is unsatisfactory mainly because there are unique suppliers of particular products. I am not aware of the specific shortage to which the Deputy refers. It may have been brought to the attention of the Department but it has not been brought to my attention with regard to any specific drug. For a country like ours, for example, in the case of the influenza pandemic, it was much more attractive for us financially to join the UK in dealings on the H5N1 vaccine than to seek to negotiate ourselves, as a small country with a small population, with the supplier of the vaccine. That is often the story where small populations are dealing with large companies and real issues are involved.

The purpose of the contract is to guarantee supply of medicines. Clearly, unless we can move to prescribing more generic drugs, we will not be able to afford many of the new treatments. The new breast cancer drug, Herceptin, which cuts of the supply of blood to the tumour, costs about €20,000 per patient per year over a five-year period and is being prescribed in Ireland. We want ensure that patients have access to such drugs and any other drugs that can greatly assist, but the quid pro quo would have to be to try to get savings when drugs go off patent and more prescribing of generic drugs where possible.