Seanad debates

Thursday, 19 July 2012

Health (Pricing and Supply of Medical Goods) Bill 2012: Second Stage


Question proposed: "That the Bill be now read a Second Time."

12:00 pm

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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I welcome the Minister for Health, Deputy Reilly, to the House.

Photo of James ReillyJames Reilly (Minister, Department of Health; Dublin North, Fine Gael)
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I am pleased to have the opportunity to address the House today on Second Stage of the Health (Pricing and Supply of Medical Goods) Bill 2012. This Bill will introduce a system of generic substitution and reference pricing for prescribed drugs and medicines. These reforms will promote price competition among suppliers and ensure that lower prices are paid for these medicines, resulting in savings for both taxpayers and patients.

The Bill sets out the Government's proposals to allow the substitution of medicines by pharmacists at a patient's request and to improve and update the statutory basis for the supply of medicines and other prescribed items under the General Medical Services, GMS, and community drugs schemes. It sets out a clear legislative basis for the supply and reimbursement of items to patients under the GMS and community drugs schemes. It also sets out criteria which the HSE must take into account when making reimbursement decisions. This Bill will allow the HSE to attach conditions to the supply of certain items, provided that any restrictions are evidence-based and in the interests of patients and ensuring value for money. However, it is important to note this Bill does not change the existing arrangements for the supply of items through community pharmacies. This Bill is patient-focused and will allow patients to continue to be able to access prescribed medicines in line with their clinical requirements. In addition, if a particular brand of medicine is required by a patient for clinical reasons, then the patient will face no additional charge for that product. It is important, in the current economic climate, to take every step possible to provide public services efficiently, to limit costs to the greatest extent possible and to involve users of resources in better understanding the value of those resources and their appropriate use.

The magnitude of expenditure on medicines and non-drug items, such as dressings, in the public health service cannot be underestimated. In 2011, this expenditure amounted to just under €2 billion. In addition, hospital expenditure was in the region of €300 million. Significant savings on the drugs budget already have been made in recent years. In 2009, changes in wholesale mark-up paid on medicines and the introduction of a common sliding dispensing fee across all schemes, together with the reduction of the retail mark-up paid on a number of schemes, resulted in an ongoing annual saving of approximately €120 million. Further reductions in 2011 resulted in additional ongoing savings of more than €34 million. This included a reduction in wholesale mark-up on most drug items from 10% to 8%. In addition, my Department and the HSE continue to engage with the Irish Pharmaceutical Healthcare Association, IPHA, to secure reductions in the price of drugs. As an interim agreement, the IPHA has agreed to provide €10 million in savings in 2012, which represents €20 million in a full year, through reductions in the price of off-patent medicines. The HSE shall give its approval to the reimbursement of drugs, which in the normal course of events would have been approved for reimbursement under the schemes. This agreement is in advance of more substantive discussions to deliver a new agreement and substantive price reductions. Moreover, meetings have been held in recent days in this regard.

With regard to the reimbursement approval for new and expensive medicines, the Health Service Executive will look at a range of important inputs before making a recommendation regarding funding approval for particular drugs. The HSE seeks to provide the best access possible to new services and new technologies from within its resources. In any health system with a fixed budget, each decision to fund a new service or technology has implications for the availability of resources for other services or technologies. That, unfortunately, is a challenge faced by all health systems, even in a good economic climate.

The Chief Medical Officer was recently asked to examine the approval system for new drugs and to engage with the HSE to ensure a robust system is put in place for decision-making on drugs to promote and drive evidence-based prescribing. This should help to create capacity on a sustainable basis to provide for necessary new drugs when there is evidence to support their use. In addition, a national task force on prescribing and dispensing will be established to deal with prescribing and dispensing of existing medicines. It will address this from the perspective of quality and patient safety primarily. However, it can be anticipated significant cost savings will result. By addressing the issue from the perspective of quality and safety, and by working with the leadership of the medical, pharmaceutical and other professions, we have the best means of securing a sustainable means of improving value for money from the significant expenditure of the State on prescribed medicines.

The task force is made up of several key leaders from the health care system and chaired by the Chief Medical Officer. Its terms of reference require it to oversee and to direct analysis of the very extensive information that is held on prescribing patterns through the primary care reimbursement service. This information will be used to establish priorities to be addressed in quality and patient-safety prescribing and will inform decisions on the nature and scale of interventions that should be undertaken. These can range from providing advice, guidance and support to prescribers and dispensers to help them to improve prescribing practice to assessing the suitability of maintaining supply of certain items with limited efficacy where more appropriate items are available.

Despite the progress I have outlined, pharmaceutical expenditure continues to pose a challenge, particularly in light of our ageing population and increased usage of medicines. Further changes in the form of generic substitution and reference pricing 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. Generic substitution allows pharmacists to substitute a cheaper generic equivalent at the patient's request when a more expensive product has been prescribed. Generic medicines are equally as safe and efficacious as proprietary products and are subject to the same requirements for quality, safety and efficacy. The Irish Medicines Board will have responsibility for the designation of interchangeable medicines.

Reference pricing involves setting a common reimbursement amount for selected groups of medicines. Only the reference price is reimbursed by the State. Eligible patients can avoid out-of-pocket payments by opting for a generic medicine at or below the reference price. Reference pricing coupled with generic substitution provides patients with an incentive to opt for the cheapest available product but does not impose any unavoidable additional costs on patients. Generic substitution and reference pricing represent significant structural change to the system of pricing and reimbursement of medicines.

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 level of 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, accordingly, savings will be achieved on a phased basis.

Part 1 provides for the definition of certain terms used in the Bill and the laying of regulations. Part 2 provides for the establishment and maintenance of a list of interchangeable medicinal products. It sets out the duties of pharmacists for prescriptions for interchangeable medicinal products under their branded names and includes a number of scenarios. It also sets out the duties of pharmacists for prescriptions for interchangeable medicinal products under their common names.

Part 2 also contains some miscellaneous provisions. These include the provision that no action or other proceeding shall be instituted against a pharmacist or prescriber when a pharmacist substitutes a medicinal product for a branded interchangeable medicinal product in accordance with the legislation. Also included is the provision that a prescriber may indicate on a prescription if a branded interchangeable medicinal product should not be substituted for clinical reasons.

Part 3 provides for the dispensing of medicinal products under their common names where they are not interchangeable medicinal products. Part 4 provides for the establishment and maintenance of the reimbursement list. It also provides for the conditional supply of listed items by the HSE and the setting of prices for items and listed items. This provides the HSE with discretion to supply non-listed items to certain patients. Part 5 provides for the setting of a reference price for groups of interchangeable medicinal products. Part 6 provides for appeals to the High Court against relevant decisions of the IMB or the HSE; power to specify form of documents, fees to be paid to the IMB or the HSE and amendments to relevant Acts.

Schedules 1 and 2 pertain to procedural provisions relating to decisions by the IMB or the HSE. Schedule 3 sets out criteria for the purposes of decision making by the HSE under section 18.

Two issues were to the fore when this Bill was drafted, namely the sustainability of the supply of medicines and the safety of generic medicines. Shortages of essential medicines are a cause of concern not just in Ireland but throughout Europe and the rest of the world. It is a global problem affecting health systems in all countries and impacting on patients worldwide. Medicines shortages can be caused by a combination of factors throughout the pharmaceutical supply chain such as manufacturing difficulties, industry consolidation and commercial decisions by manufacturers to withdraw unprofitable lines.

Irish medicines regulations place an obligation on both manufacturers and pharmaceutical wholesalers, within the limits of their respective responsibilities, to ensure the adequate availability and supply of medicines on the Irish market to meet patient needs. My Department has been engaging with the IMB, the HSE and the Pharmaceutical Society of Ireland, PSI, to identify ways in which the Irish system can manage medicines shortages as effectively as possible to minimise the impact on patients. International efforts to effectively manage medicines shortages are also being considered. Pharmaceutical production is carried out by private enterprises. The State or my Department can only intervene to a limited extent to prevent medicines shortages occurring. The IMB and the HSE continue to work closely to operationally manage medicines shortages when they arise. In addition, the PSI works with the pharmacy profession and has recently published guidance to registered pharmacists on managing medicines shortages. Manufacturers, wholesalers and pharmacies all have responsibility to work together to identify shortages quickly and implement alternative arrangements to meet the needs of patients. In this context, section 24(3)(a) provides that when the HSE sets a reference price, or reviews a reference price for a group of interchangeable medicinal products, it has to take into account the ability of suppliers to meet patient demand. In other words, reference prices will be set at levels which will facilitate rather than jeopardise supply.

The safety of generic medicines underpins this Bill. However, it is important to point out that generic medicines must meet exactly the same standards of quality and safety and have the same effect as the original medicine. All of the generic medicines on the Irish market are required to be properly licensed and meet the requirements of the IMB. To further enhance the safety aspect of generic substitution, section 13 gives a prescriber the option of indicating on a prescription that a branded interchangeable medicinal product should not be substituted, if there are clinical reasons not to do so.

The programme for Government includes the commitment that reference pricing and greater use of generics will be introduced to reduce the State's large drug bill and the cost to individuals of their medicines. This legislation will introduce a system of reference pricing and generic substitution for prescribed drugs and medicines which will ultimately lead to savings for taxpayers and patients. It is envisaged the Bill will contribute to an increase in the rate of generic prescribing which stands at approximately 18%. I will, of course, keep the implementation of reference pricing and generic substitution under constant review and will report back to both Houses. This measure will allow for better prescribing, cost-effective prescribing and greater availability to patients as our funds must stretch further. I commend the Bill the House and look forward to hearing the views of Senators.

Photo of Marc MacSharryMarc MacSharry (Fianna Fail)
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I welcome the Minister to the House and thank him for bringing forward this legislation. In one way it is a shame it has taken so long. I acknowledge, as the Minister did, the savings that have been made through negotiations with the various representative organisations and other measures dating back to 2006, and particularly 2009. I welcome the aspiration with which this Bill sets out that cheaper and better prescribing and dispensing will take place in terms of the provision of reference pricing and the supply of generic drugs, etc.

I have concerns about the Bill, despite the fact that on the Order of Business my colleague, Senator Byrne, wished to have all Stages taken this evening to prevent undue delay in implementing the provisions. This is effectively the second last day and as Committee and Remaining Stages will not be taken in this House until the autumn. I ask that in the intervening period some consultation would be entered into by the Department with patient advocacy groups and with the manufacturers and suppliers, both wholesale and retail, to further refine aspects that may need to be visited.

As no doubt the Minister will be aware, last week there was an effort here by Senator Crown and myself under the guise of the Access to Cancer Treatment Bill 2012 to put a relatively clear process on the provision of cancer drugs. It was voted down. One of the reasons given in the speech which was delivered on the Minister's behalf was that the current Bill was due and it would put people in no doubt as to the clear process that would be available to them in terms of the provision of drugs that would come online. I suppose Ipilimumab is the most recent example but there are others. Having read the Bill, I cannot find that clear process. It seems at least as obscure and unknown as it was before the Bill was published. There is nothing in this Bill that gives a patient or a patient advocacy group any recourse to a decision that is made to provide a drug, to have a drug provided or anything like that. If one is not a party to it, if one is not a drug manufacturer or supplier, one has no role at all. In fact, the Bills Digest, sometimes prepared in advance of debates in the Houses here on a non-partisan basis by the Library, states that the Bill does not provide a system where potentially affected third parties are able to make submissions. That is a concern which, on Committee Stage, must be dealt with by way of amendment.

Even if one is a stakeholder or one of the parties that can be consulted or has recourse, it will take 194 days following application before it will receive a decision. Therefore, it will be more than six months before a drug could be available. If the answer is "No", the only recourse is to appeal to the High Court. Depending on one's ailment, sadly, one would be dead while we deliberate on whether a drug should be available. Perhaps that process was followed for Ipilimumab because it was the approach on the Joe Duffy radio show that had to be adopted ultimately to secure the provision of that drug. Senator Crown and I tied to ensure that while preserving the State's necessary right to say that a drug is too expensive when measured against the outcomes, a decision could be taken quickly and the buck would stop with the Minister.

The Bill will make the HSE, or whatever replaces it, all powerful in this area. The Minister referred to a task force on prescribing and dispensing to be headed up by the Chief Medical Officer. Who else will it include? What is the decision-making process? How long will it take them to make that decision? Will it be within the 180 days or do the 180 days only start when somebody applies? If, for example, the National Cancer Control Programme, NCCP, decides that Ipilimumab or the next such drug is to be supplied, can it circumvent that process to have a drug added to the list of those being provided? In the event that the programme makes such a recommendation, does the national task force on prescribing and dispensing take the decision? Is it the task force, the office of the Minister or one of the directorates to be established, such as primary care or mental health, that the NCCP would ask to provide a certain drug? What will the decision-making process be? If, for example, a patient knows there is an EMA approved drug in Germany and the physician and oncologist - if it is an MS drug, it would be the neurologist - wants to prescribe it, and because Ireland is only 1% of the market the drug company concerned has not taken an interest in supplying here and has not yet applied to the 194-day process to get a decision, this Bill does not tell the patient how he or she can gain access to that drug. The Bill is obscure. It is ad hoc. In many ways, it replicates the approach that is being taken to the HSE at present. I would like further clarification on that aspect.

My party will not oppose the Bill on Committee Stage but it contains many defects in terms of putting the patient first. In the first couple of paragraphs of his speech, the Minister stated this was patient-centred. I stated the same last week on another piece of legislation. I do not believe this is patient-centred.

We all are in favour of cheaper drugs. The Minister will have the full support of Fianna Fáil with that aspect of the legislation but in terms of security of supply and a process to get a drug in this country, I am none the wiser today than I was two weeks ago. As I stated, the Bills Digests clearly states that the patient is not fully included in this process. That is why I would hope that, in the month or however long it will be before Committee Stage in the House, there would be consultation with a number of persons. I am sure Senator Crown would be available. I am certainly available to give my views as a consumer on what should be done.

On a minor aspect of the process, the EU Council transparency directive requires the publication of objective and verifiable criteria for deciding whether or not to include medicinal products. I do not see that anywhere in this list. I do not see anything clear or verifiable. I only see that there will be a task force. We do not know who will be on it or what criteria will be followed in the determination other than a list of basics, such as value for money and subject to resources of the HSE. What is meant by value for money? How does one determine the cost per year of life saved when experts, such as Senator Crown, would say that such is too crude a methodology in its own right because drug A might give me a week in terms of remission but might give the Minister an period? As a result, we cannot merely clinically state that the cost per year of life saved will be the one included there. Bearing in mind that we have obligations under the EU transparency directive to have a clearly verifiable criteria, which is clearly absent from this legislation, what on Committee Stage can be brought forward to alleviate the concerns of patients? While welcoming that those drugs that will be available and approved for distribution will be cheaper and we can have generic brands, what is being done to ensure clear processes are in place to address issues arising around those that are not? What are we doing to bring clear processes? I am sorry to be bringing it back a week. I welcome the positive aspects to the Bill in terms of cost. It was a policy that followed on from the previous Government, as the Minister has acknowledged. However, I am concerned about this other aspect and I would like him to address it if not in his closing remarks then on Committee Stage.

While we want the cheapest medicines available to the State given our resource situation, it would be remiss not to mention the contribution of pharmaceutical industry to the country in terms of employment and our health care. I ask the Minister to take on board to the extent possible the industry's concern over continuity in the Irish market. At the end of the day we all want to get the best value for the consumer. The Minister will have wholehearted support in that regard. However, I ask him to take those other issues on board.

Photo of Colm BurkeColm Burke (Fine Gael)
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I thank the Minister for bringing this important Bill to the House today. I wish to deal briefly with last week's Bill, on which I made my views quite well known. I believe section 3 of that Bill gave a blank cheque to drug companies because it made it quite clear that once it was approved by the European Medicines Agency and once it was prescribed, the HSE had to provide it. There was no connection between section 3 of the Bill and section 5 relating to the powers of the Minister. That was my concern about it.

Regarding the availability of drugs, there is the issue of European regulation on cross-border health care, which will have an effect on us here. Access to medical care and drugs will be affected by that directive which was passed by the European Parliament, Commission and Council in February 2011 and we have 30 months within which to implement it.

The figures for 2000 to 2009 show that spending per capita on pharmaceuticals in this country increased by 8.7%, which was the second highest increase in OECD countries. The cost to the State has increased dramatically between 2000 and 2010. While the briefing note from the Department referred to a 185% increase, my calculation is that it is a 230% increase. The general medical scheme increased from €338.8 million to €1.233 billion, the cost of the drug payment scheme from €140 million to €173 million. Costs for long-term illness increased from €41.7 million to €126.9 million. The cost of high-tech drugs increased from €51.9 million to €361.2 million. In total, costs increased from €573 million to €1.894 billion, a 230% increase in ten years. That represents a huge drain on the medical services. One of the reasons we need the Bill is to tackle this increase. Between 2000 and 2008 the cost of the drug payment scheme incresed from €143.6 million to €311.9 million. While there was a reduction thereafter, that represents a very significant increase in a very short time period.

I have an issue with the cost of drugs in hospitals. I do not know if we have figures on the amount hospitals spend on drugs. I have seen estimates of approximately €300 million. Do we have a breakdown on the cost for each hospital? The Minister might not be aware that some hospitals are now giving prescriptions to people to buy the drugs outside the hospital even though they are being administered in the hospital. I presume this is being done to remove that cost from their budgets. A cost is now being added to the State in that procedure and that issue needs to be addressed.

In addition to an increase in the cost, the volume of drugs used has increased dramatically. Between 1997 and 2007, there was an increase from 20 million items used per annum to 40 million items. We need to consider whether doctors feel that regardless of the complaint they must immediately prescribe. We all have a responsibility in this regard.

There is also an issue with the cost per item. An item that used to cost €11.50 in Ireland cost €3.50 in Brussels. Last week I spoke to someone who now buys their drugs when going to Spain. The cost here is €120 and the cost in Spain is €40 for the same drug. In 1997 the average cost per item under the GMS was €11.20 and is now €23.27, which is a substantial increase in a very short time period.

The Bill is welcome. Of 29 countries across Europe, 23 are using generic substitution. We are considerably behind in that the amount of generic substitution is only approximately 18%, which is extremely low. The Bill is comprehensive in dealing with that. The area is currently governed by section 59 of the Health Act 1970 and there has been no major reform in more than 40 years. It puts the obligation on the health service in the purchase of medication and drugs. The Irish Pharmaceutical Healthcare Association has raised concerns over the Bill. Those concerns need to be considered as we deal with the Bill.

We need to get value for money in providing health care. We have allowed costs to increase substantially in a very short period of time. Last year we spent more money on health care than we got in income tax. We have considerable work to do to ensure we get value for money in the health service while at the same time ensuring we can provide a comprehensive health service. While we are doing that at the moment we must ensure we use the budget we have effectively in order to provide a comprehensive health-care system for the entire population. When people criticise the health-care system they often fail to take into account that the number of people with medical cards has gone from 1.146 million to more than 1.76 million and the figure is very close to 2 million when those with GP-only medical cards are included. We now have a reduced budget to provide health care for a far larger number of people with a 50% increase in the numbers under the medical card scheme. We need to deal with those issues.

We have major challenges with the health-care system. The Minister is dealing with those challenges and this is just another step in dealing with it in a comprehensive and careful manner. This Bill is just one of the issues we need to address. I look forward to the Committee Stage debate and to seeing the legislation pass through both Houses of the Oireachtas and implemented.

Photo of Sean BarrettSean Barrett (Independent)
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I welcome the Minister. I always appreciate his visits here. He probably has the most demanding job in Irish public life. It was compared to a certain country in Africa at one stage. I commend the Department for the great documentation it sent us on key trends in health in Ireland. Towards the end of the document it is stated that per capita expenditure on the health service in Ireland, despite the belief the that Minister is Dr. Scrooge, was at €3,781 in 2010, which is a little less than in Belgium but more than in Finland, Italy, Japan, Spain, Sweden and the UK and approximately the same as in France. We must face the value for money issues and I am delighted the Minister is doing so. The drugs bill of €2.3 billion is approximately one eighth of the total expenditure because we have a large amount of private health insurance and large numbers of over-the-counter medicines are used. Another 88% will undoubtedly occupy the attention of the Minister and it is what is recommended by the IMF.

I support the Bill and this is inherent in the comments I am making. We do not want to solve one problem and create a bigger one. According to departmental sources, in 1980 we ran the health service with approximately 55,000 staff; it now has 104,000 staff. The total increase was 87% but in clerical and administrative roles it was to an index of 195%. We went from having 5,000 administrators in 1980 to 16,000 at present. This must be addressed. A metaphor for the Irish health service is Dr. Steevens' Hospital near Heuston Station, which was a fine hospital that was converted into offices for administrators. When one is ill one does not look for offices for administrators; one looks for the care of health service professionals. This is a problem we must address.

We must also address the issues in the Milliman report. On the previous occasion when the Minister came to the House he told us he brought Milliman back to the Department and the VHI because it found a lack of budget-consciousness which accounted for the high cost of health insurance in Ireland. The version of the report that the Leader received for us is heavily redacted, but a piece on page 31 which escaped the redactor states that for medical inpatient admissions the VHI average length of stay in 2009 was 10.6 days but the international well-managed standard is 3.7 days. This is a vast bill for the Minister to have to cover. The average length of stay for well-managed surgical inpatient admissions was 3.7 days but the VHI average was 7.5 days. The money spent on €1,000-a-night bed-and-breakfast for people kept in hospital unnecessarily comes from the Minister's budget for care of patients. We have enough hotels to look after people. This must be examined.

The pattern indicates that the defence by the Department of its in-house health insurance company had the normal effects of creating a monopoly. When Aer Lingus was protected it was extremely expensive to fly. I would like a situation whereby competing health insurance companies could say they recruited all of the old people but because they did not pay over the odds for drugs - they had read the Minister's speech in the Seanad on 19 July 2012 and read the Milliman report - they found they could give a better deal on health costs. This would benefit us all because it would introduce a competitive element so the VHI would have to respond and examine its high length-of-stay costs and expensive drugs which the Minister seeks to control. Like other Senators, I look forward to working on this over the vacation and coming back to the Minister.

I like the decision taken today on the abolition of the HSE. How many wrong turns did we take? We did not like regional health boards because they were too bureaucratic, so we created the HSE, but the bureaucracy grew. It is time to think fundamentally about what our destination should be. Mine would be to make the hospital the individual unit and let two or three hospitals compete. If similar patients get out of one hospital faster and are treated by the drugs advocated by the Minister today rather than very expensive drugs, people would get to know this. Perhaps too much centralisation took place and there was too much bureaucracy.

Like other Senators I will be thinking about and working on the Bill in detail. An emphasis on cost-consciousness is required because, as I stated at the beginning, we do not stint on health expenditure here. Even in the dire circumstances in which we find ourselves we have chosen models which are excessively based on hospitals. I support the Minister's attempts to move this out to the community. It also seems to be excessively bureaucratic, given the large growth of bureaucracy since 1980. If in this context cost-consciousness has not addressed the cost of drugs despite the fact that they account for one eighth of expenditure, let us start with this and put a new emphasis on the patient and value for money. It is possible to combine the two, which is why I welcome the Bill.

Photo of John GilroyJohn Gilroy (Labour)
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I welcome the Minister to the House. At the outset of Senator Burke's contribution, he made reference to the Private Members' Bill on access to cancer treatment which came before the House recently. I would also like to make reference to it because it was a good example of how we can find policy in one area is not only inconsistent with policy in another but contradictory to it. It behoves us all as legislators to keep an eye on the wider picture when we bring forward legislation to ensure consistency across all policy areas, particularly when the policy areas in this regard are so close to each other.

I welcome the Bill. Expenditure on pharmaceuticals is probably the single biggest non-payroll cost in the entire health service. While it is vital to protect patient safety and, as importantly, patient confidence, substantial savings can be made in this area. I note the previous Government wrestled with this issue from 2009 and made some savings. It is time, once and for all, that we tackle this in a comprehensive manner, which is what the Minister proposes to do in the Bill. The Bill goes a long way towards achieving this effect.

The previous Government published a report in 2010 which was good and comprehensive. It proposed a model of price referencing and generic substitution similar to the one proposed by the Minister. However, it did not progress very far - perhaps, as Macmillan said, because events overtook it. The Government has taken the initiative on the issue and has brought forward legislation to give effect to a major advance in public policy. If we do not take this step it is estimated that within the coming years the cost of drugs will increase by approximately €400 million or €500 million to approximately €2.4 billion. Many countries in Europe and elsewhere have in place many of the elements proposed in the Bill.

The Minister and Senator Burke referred in their speeches to the surprisingly low level of generic prescribing that takes place in Ireland. It certainly was a surprise to me to learn the level is 18%. Perhaps it hints at the success of the marketing campaigns of the major pharmaceutical companies in the country. We could examine this also. At present, when a branded medicine is prescribed, the specific medicine must be dispensed. Under the proposals before us, pharmacists will be able to substitute a designated interchangeable medicine, which will result in substantial savings.

I had a look at the Monthly Index of Medical Specialities, MIMS, dated January 2012. The publication gives a listing of drug names, dosage and usage and is extensively used by drug prescribers. I will not mention the name of one particular drug, which is listed under a branded name and of which doses of 20 mg are available for prescription. The generic name of the drug, which deals with stomach upsets and ulcers, is omeprazole. A dosage of 30 20-mg tablets under the brand name is costed in MIMS at €17.28, but under the generic name the same 30 tablets cost €12.42, which represents a saving of 30%. We know that Omeprazole is a widely prescribed drug in this country. I shall mention a similar drug that the Minister also knows. A drug that is sold under the generic name of Cimetidine where 60 tablets of the branded product cost €10.35 but 200 tablets, at the same dosage, of the unbranded or generic drug cost €11.05. That could mean a 300% saving.

Photo of James ReillyJames Reilly (Minister, Department of Health; Dublin North, Fine Gael)
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Way too much.

Photo of John GilroyJohn Gilroy (Labour)
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I understand but my examples give an impression.

Photo of James ReillyJames Reilly (Minister, Department of Health; Dublin North, Fine Gael)
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It is even worse now.

Photo of John GilroyJohn Gilroy (Labour)
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The Minister is correct. I have outlined some of the issues that the Bill proposes to address. It also requires that the HSE takes prices in member states and a range of other factors into account and that may generate some interest when we try to tease out the matter.

I shall give one more example of a well known pharmacy chain that operates here that sells a box of paracetamol under a generic name in its UK store at a cost of 16p for 16 tablets but the cheapest price in its Irish store is €1.49 for 12 tablets which is a big discrepancy. It will be interesting to see the international price comparisons and we will watch with great interest.

There is a concern about the inter-changeability of medical preparations because they must be exact. Again, I know from an example that I could cite from the MIMS booklet that to replace one for one might be problematic, particularly dosage levels. I am sure that when we introduce the Bill that the market will take care of the anomaly in dosage levels and that companies will produce the same dosage levels for existing non-generic drugs.

In order for the legislation to be successful it must be accompanied by a comprehensive public awareness campaign. Many people do not appreciate that identical drugs are sold under branded and generic names but that is probably due to successful advertisement campaigns by the pharmaceutical industry. As a former health service professional I was constantly surprised by the questions that people asked. When a person presented with a headache he or she would be offered panadol which would be rejected because he or she had taken paracetamol. Obviously they are the same and there is room for confusion among the general population. Compliance is one of the main concerns and we need to be careful about it.

I would like one addition made to the Bill. I would like a mechanism to institute inquiries if it became obvious that prescribers were over-prescribing branded medication when a generic option was available. Again, I point towards the perceived close relationship between some prescribers and the pharmaceutical industry and I am not saying that it is anything stronger than a perception.

The Bill is welcome. To be fair, the last Government did attempt to tackle the issue but for one reason or another it ran into a wall somewhere along the way. This Government will not be so hesitant in adopting it and the Labour Party supports it. We look forward to early cost savings and better services for patients.

Photo of Feargal QuinnFeargal Quinn (Independent)
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I am delighted to see the Bill and what it is based upon. It seems to me that the Minister has grabbed hold of a vast opportunity here.

I know something about generics through my grocery business. In the 1980s a French company called Carrefour introduced produits libres which people were excited about it. My company could not get over the price difference between products that were branded, advertised and promoted and the produits libres products wrapped in plain black and white packaging. My then company introduced it which led to quite dramatic benefits for the public and such lines have continued under different headings. The Bill provides a great opportunity for us.

One of my colleagues in Superquinn served on a committee in 1994 and 1995 that worked on behalf of the Department of Health and I must lay my hands on its report. Its aim was to improve purchasing and for six months a small team analysed products and not just generics. It recommended that £50 million worth of savings could be made by centralised buying. The team was amazed at what it regarded as the inefficiencies of purchase protocols at the time. There are huge opportunities to make savings today.

I have raised the issue of the cost difference between patented and generic drugs before and we have heard a lot about it tonight. I could not believe it when I learned that branded medication often costs 30 times more. A few minutes ago Senator Gilroy talked about one branded product being much more expensive than its generic equivalent in Ireland. In 2009 this country had the highest spend per person on pharmaceuticals in the OECD countries.

At present if a doctor automatically uses brand names then a chemist is obliged to dispense them rather than generic drugs that might cost a fraction of the price. Earlier we heard that it does cost a fraction of the price. There is no cost to the doctor but there is a cost to the State. I am amazed at the difference between what people pay here for drugs in pharmacies and prices charged in other countries. We heard a lot about it in this debate. The introduction of generics offers an immense opportunity to secure a reduction in costs and prices.

I am glad to see that medical card holders who choose more expensive branded medicines over cheaper generic alternatives will have to make up the difference. That is a sensible idea. It is also apparent that private patients could save money where their pharmacist suggests substituting a cheaper alternative to the medicine prescribed. Recently a friend of mine was in Austria and he was given a generic drug rather than the one identified on his prescription. He gave his prescription to the chemist who offered him an alternative generic.

Spain enacted a law that requires doctors to prescribe a generic brand where possible rather than a brand name. In turn, pharmacists are required to provide the cheapest available version of the drug prescribed. Should we follow its stringent example? Such a law would reduce leeway but may bring more savings. Italy announced measures in 2010 that included a mandatory price cut of 12.5% on generic drugs. Can we do the same here?

Can the Minister comment on a claim by some that most generic drugs are slightly different from their branded counterparts and that changes could prove fatal to people with serious health conditions such as epilepsy, asthma or those who have had an organ transplant? I am especially wary for recipients of an organ given the difficulties that they would have undergone to receive a transplant. I note that the Bill made no reference to these conditions. Do we need to make such references? Are we completely safe? Can we be safer? Is there a greater threat that the market will be flooded with counterfeit medicines?

The discovery of fake cancer drugs has increased in the US. For example, one container of the anti-cancer drug Avastin was found. It is a drug that can cost around $2,500. This year fake cancer drugs were purchased by nearly 100 doctors, mostly in California. I have called for a traceability system to be introduced to combat counterfeit medicines like the one used in Turkey, France, Italy and Belgium and piloted in Sweden. It is a barcode system that assists in the fight against counterfeit medicines and makes them easily identifiable and protects the customer. Californian law now requires pharmaceutical manufacturers to serialise drug packages by equipping them with an e-pedigree by the beginning of 2015. I know something about the system because some years ago Superquinn introduced a traceability system called IdentiGEN that was developed in Trinity College for beef traceability during the BSE scare. If it is possible to trace beef then the same can be done for drugs. We should draw attention to traceability especially as the market has been estimated to be worth €100 million. I do not know what it is worth but I am sure that it is more than that sum. Can the Minister indicate whether traceability systems employed by other countries have been studied? I am sure that they have but I would like to hear his view on the matter. I am also anxious to hear the Minister's view on the European law due to be implemented in July next year which will impose higher standards of proof of the purity of "any active pharmaceutical ingredients", the contents of medicines, which come from outside the EU. This may result in medicine shortages. There is some debate that this is an over-reaction to medicines sold via the Internet. Can the Minister comment on this legislation? Many concerns have been expressed by the Irish Pharmaceutical Healthcare Association, and I am sure the Minister will have been made aware of them. Perhaps he will refer to the concerns the association mentioned when it lobbied Members.

I am delighted with the Bill. The Minister has taken the right steps but I hope he can reply to my queries.

Photo of Deirdre CluneDeirdre Clune (Fine Gael)
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I am glad to have the opportunity to speak on this Bill. It is an extremely important measure and was a commitment in the programme for Government. Much has been done to try to reduce the excessive cost of prescription drugs in this country. There has been much debate previously on the matter. The Financial Emergency Measures in the Public Interest Act focused on the wholesale mark-up price and significantly reduced the cost of some prescription drugs.

This Bill is welcome. It is important that we press the issue of trying to control the price of drugs and ensuring that generic products are used by providing for it in legislation. It will be good for costs and also for competition. I note that the patient will be involved and will be offered generic drugs by the pharmacist. It will be subject to their agreement. It is important, too, that should they not wish to use the particular drug, they can pay the cost themselves. The IMF or should I say the IMB, the Irish Medicines Board, will be responsible for the designation of these drugs, although we could also get to the point where the IMF will be. The IMB is an august body and knows what it is doing. It licenses products and prescription drugs and it will be responsible for the designation of drugs that must be interchangeable.

On the subject of generic drugs and drugs that are coming off patent, the jobs and enterprise committee had a discussion yesterday with Barry O'Leary of the IDA. Being from Cork, I am very conscious of the impact of drugs coming off patent. There have been a number of job losses in the area due to it happening in the case of Lipitor, which has had a significant effect. The pharmaceutical industry is very important in this country. We have heard a great deal from it not just with regard to this Bill, but also about its difficulties in bringing drugs to the market. There is a rigorous testing process, which is important and necessary, but it is becoming more difficult to develop individual products and there is a longer lead-in time to production. The cost of producing drugs is very high. Nevertheless, I note that following negotiations the industry has provided savings of €10 million in June 2012. The Minister also said he had negotiations with the industry on this Bill. That is important because the industry has circulated its concerns to all Members and they will be addressed on Committee Stage.

I have been looking at the responses of various organisations on the issue of generic drugs. The IMO welcomed them but said there is a need to inform the patient. It will be very important to have a public information process because the patient who will probably have confidence in a brand might have a certain fear or concern about being offered a generic product. That concern must be addressed. It is only by informing people about the thinking behind this move that we can have their confidence and bring them with us. That is an important point. In addition, the Irish Pharmacy Union, IPU, while welcoming the fact that its members will be dispensing cheaper generic drugs, and it happens quite often anyway despite there not being a statutory obligation to do so, has expressed concerns about the reference pricing. It says it could result in shortages in supply and in some players exiting the market. Perhaps the Minister will address that concern in his reply.

The health committee held hearings on the issue of the pricing and use of generic drugs. The Irish Osteoporosis Society and the Asthma Society of Ireland had concerns about the generic alternatives that would be on offer to their members. I do not have the expertise to comment on that but I assume that if there are concerns about the quality of alternative products, they would be addressed by the IMB.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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This Bill is very welcome. All of us hoped it could have been before the House much earlier, but it has arrived now and we support it. It is unfortunate that we cannot complete the legislative process before the summer recess. Members would have preferred if it had been possible to deal with it before the summer, but we must wait until we return in September to finalise the Bill. That is unsatisfactory but at least we are making some progress.

Generic substitution and reference pricing have been talked about for a long time. There is no doubt that this Bill will save the State significant amounts of money. I do not know if the Minister was listening to the radio recently but there was a great deal of commentary about him in respect of many issues. There was a very good discussion on one of the morning programmes on RTE Radio 1 on this issue, and a number of people rang the programme to talk about their experience of over-prescription and the waste of medicines. All of us can provide such stories. When my paternal grandparents were alive we had to get their doctors' prescriptions filled. Often one cannot read what is on the prescription; one simply hands it over to the pharmacist and receives a bag of medicines. When we got home we regularly discovered that most of what was in the bag was already in my grandparents' home. The same story was told by dozens of people. It is a constantly recurring experience. Aside from the fact that we need to reduce the cost in terms of general practitioners issuing prescriptions for branded drugs and the pharmacist having to provide those drugs, there is also a problem with over-prescription and a need to have a proper regulatory oversight mechanism to ensure that a pharmacist can see what medicines are being prescribed, how often they are being prescribed and to make rational decisions about dispensing medications which, in some cases, might be unnecessary. Of course, that is difficult to legislate for but it is something that must be examined.

The HSE spent an estimated €1.9 billion in 2010 on medicines and non-drug items supplied to patients under the GMS and community drug schemes. This includes approximately €384 million paid to community pharmacy contractors in respect of dispensing fees and retail mark-ups. Savings were made last year through some reforms but all of us accept that a great deal more can and should be done to achieve savings over the next few years. In fact, this issue featured in Sinn Féin's pre-budget submission in 2008. It is something we have lobbied previous Governments to do and we have put forward proposals on how this could work. I am pleased the Government is dealing with the issue, albeit a little late. It could have been brought forward earlier but it is welcome. We must deal with other issues to address the cost of medicine in our health care system. Sinn Féin has called for the establishment of a State wholesale distributor of drugs. It could be used as a mechanism to save the State money. The expansion of the role of pharmacists to include medicine use review to help ensure patients get optimum benefit from medication and to help the reduction of waste should also be considered. The Minister for Health should initiate a comprehensive national audit of drug prescriptions in hospitals and in the community. That would be helpful to guide us on where savings could be made.

In opposition, the Minister of State agreed with the following point when the then Minister, Mary Harney, introduced the notorious prescription charges for medical card patients.

Photo of Thomas ByrneThomas Byrne (Fianna Fail)
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The first broken promise.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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The Labour Party, Fine Gael and Sinn Féin disagreed with the charge at the time. We all accept the cost of medicine to the State and to individuals is too high and we all acknowledge there is waste and over-prescription of medicine. We also agree measures must be undertaken to address the problems but the last way to do so is to punish those who are least able to pay. In opposition, the Minister, Deputy Reilly, was very clear that he was opposed to the charges and would seek to abolish them. We are still awaiting the abolition of those charges. Age Action said that over-prescribing and inappropriate prescribing is a problem in Ireland but that the Minister must address this point with the doctors who write the prescriptions rather than hitting the patients. Since the patients do not write the prescription, penalising them will do little to change prescribing practices. It is important to deal with real issues in respect of waste.

A number of issues were raised with me by a local pharmacist with regard to other European countries that have addressed the problem by introducing a public service obligation under the European Directive 2001/83/EC. It requires wholesalers to guarantee permanently the provision and timely delivery of medicinal products to meet the needs of patients. In response to medicine shortages in Canada, the House of Commons standing committee on health issued a new report entitled Drug Supply in Canada: A Multi-Stakeholder Responsibility. It outlines the measures the Canadian Government intends to take to address the shortages. This issue needs examination and discussion on Committee Stage and in the Dáil. The prolonged shortage of essential medicines has caused much dissatisfaction among patients as pharmacists endeavour to explain the ongoing difficulty in sourcing medication. Eltroxin is an example of a drug that is not readily available, a point raised by a local pharmacist. I welcome the Bill and the measures contained in it. We want to see the savings made as quickly as possible and Sinn Féin will offer whatever support it can to get the Bill through as quickly as possible.

Photo of Terry BrennanTerry Brennan (Fine Gael)
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Cuirim fáilte roimh an Aire. I agree wholeheartedly with the objective of the Bill and the question of promoting competition between suppliers and introducing interchangeable medicines to ensure greater value for money. This puts the onus on patients to opt for cheaper generic medicines. We all require the cheapest drugs and greater savings are in all our interests. I refer to the costs of similar drugs in Northern Ireland, a point I have raised in the House before. Significant savings can be made if people go for generic or branded drugs. These may be the same drugs from the same manufacturers and the same distributors but the difference in cost between North and South is inexplicable. Does the Minister of State have an opinion on the price difference between North and South? The cost of drugs is such that families from the midlands and further south go north and, while they are there, they fill their boots with groceries.

I refer to the substitution of generic drugs. I have attended warfarin clinics, where people arrive in the morning before they go to work and wait for two hours for a blood test. Everyone is advised to come to the clinic at the same time. Something must be done. The patient is there for hours and we must also consider the time of nurses, technicians and the time it takes to check the blood count. A significant period of time is involved to determine the increase or decrease in warfarin intake. Branded drugs are available but are more expensive than warfarin. I attended a clinic where 30 or 40 people attended at the same time once a fortnight. A substitute is available and I, and many others, take it. It is more expensive but the overall cost to the State, when one considers the cost of doctors and nurses in hospitals, is lower. I have blood tests twice a year, as do many people I know, in place of warfarin. It is a pain in the neck to take half a day to go to a warfarin clinic, wait, get blood tests and return for results. In some instances, prescribing branded drugs would cost less to patients who are working. I am sure there are similar clinics in different parts of the country. I advocate the cheaper drugs but the branded drugs may save the patient and the HSE time and money.

Photo of Thomas ByrneThomas Byrne (Fianna Fail)
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The Opposition offered that all Stages of the Bill could be taken today in an effort to be helpful and to allow the Department of Health to reach its budget targets. It will not be the fault of the Minister of State, from what we hear in the Department, but this summer the HSE is facing a raft of costs. For once, even the Government will not be able to blame the IMF or Fianna Fáil.

Photo of John GilroyJohn Gilroy (Labour)
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We can never go too far wrong blaming Fianna Fáil.

Photo of Thomas ByrneThomas Byrne (Fianna Fail)
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We will not delve too far into the backgrounds of a number of Government Senators, who were in various parties over the past ten years. It is a legacy issue and we all have legacy issues.

A false Estimate was put forward by the Minister for Health in respect of the HSE at the beginning of the year. Substantial savings were promised in respect of this Bill, which was first promised last August. This Bill is a fine piece of work and, on its own, it is welcome. However, seven months into the 2012 financial year and one year after it should have been drafted, the Bill is not welcome. The delay in the Bill means wards may be closed, operations will be cancelled and people will suffer. It is all very well if the Minister goes on television saying that he is doing a great job for the consumer but, by delaying, the Government is not doing so in this case. The Minister, Deputy Reilly, has essentially done nothing in regard to this Bill which would have achieved substantial savings. I do not know what the Government will say to the IMF and the people at the end of August or in early September when substantial cuts will have to be introduced in the HSE budget, partially because this Bill and a number of other measures were not introduced. Those other measures relate to agency nurses and the cost of private beds in public hospitals. Those issues simply have not been addressed by the Minister, Deputy Reilly. I exclude the Minister of State, Deputy Shortall, from this because it is clear there is a serious problem in the Department of Health and, as far as I can see, it is not coming from the Labour Party side.

We support this Bill but we are very concerned that introducing it in the Seanad on the second last day of the session is a tick the box exercise for the IMF. However, the Government will not be able to tick the box for people whose operations are cancelled and in regard to ward closures in September. We will remind the Government that we offered to pass this Bill - I am sure opposition parties in the Dáil would have facilitated its passage there - to allow savings to come into effect much more quickly and to make up some of the shortfall. We support the Bill but do so with a heavy heart. We were willing to allow its passage this evening but for whatever reason, it is being unnecessarily delayed until the autumn which is the exception to the rule given that Bills are guillotined.

Photo of David NorrisDavid Norris (Independent)
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I welcome the Minister of State. This is an important Bill. Anything that reduces the charge to the State of the medical service is welcome, in particular in the difficult circumstances in which we find ourselves. However, there is a balance to be struck. I am not a big fan of pharmaceutical companies but there is no doubt whatsoever that there are research and development costs involved in producing new drugs. For every drug that is successful, a number are unsuccessful. Scientist are engaged in the production of these products and sometimes they fail at spectacularly late stages in the trials of the drugs. We had the classic example of Elan which appeared to develop a wonderful drug, Tysabri, that was used in the treatment of a most horrible disease, multiple sclerosis. Rather sadly, it appeared to have significant side effects which made its continued sale problematic. This is the kind of thing which can confront pharmaceutical companies. Although I am by no means a supporter of pharmaceutical companies, and think that some of them in the past have proved to be nothing other than highway robbers, at the same time there is this balance to be struck.

I welcome the fact the Minister indicated that this Bill is patient-focused. My colleague, Senator Quinn, who spoke earlier made a career in business by saying the customer was king. In the health service, the patient should be regarded with due respect and as one of the most significant elements in the equation. This is not always the case, so I am very glad this is patient-focused. However, we are dealing with an ageing population, which increases the requirement for drugs, and with more sophisticated drugs. Situations which simply had to be tolerated before can now be addressed by expensive drugs. We are moving into an area where choices may have to be made. I am realistic and accept human beings, including myself, are perishable goods. I happen to think that death is one of the best inventions for which God was responsible, otherwise we would be in an intolerable situation on the planet. However, I understand the very human desire to keep going for as long as possible with whatever pharmaceutical assistance is available.

I welcome the reduction in pricing but I have a certain number of concerns. I was a little bit confused when the Minister spoke about the cost of drugs and said that the magnitude of expenditure on medicines and non-drug items such as dressings in the public health service cannot be underestimated in 2011 and that this expenditure amounted to just under €2 billion. I am not sure what the difference between medicine and drugs is. I am sure there is a distinction and perhaps we could be advised as to what precisely it is because if I go into a chemist with a prescription for a medicine, I presume it is a drug. There is a difference with Elastoplast. To my mind, even Aspirin is a drug.

While I am on the subject of drugs - this is a slight digression - on the Order of Business today there was a lot of talk about O'Connell Street, the awful things that happen, all the druggies and so on. I think we have to remember that these people are human beings. I live at the other end of O'Connell Street and I walk that street every night and will walk it again this evening. I meet drug using people - I met two last night. They were an absolutely wonderful couple and my heart went out to them. They were the remains of a very beautiful pair - a young man and a young woman. The woman was the stronger of the two and was desperately trying to get her companion off heroin. There is not sufficient provision in terms of methadone or, indeed, trying to get people off methadone. We should support these people instead of writing them off as human garbage to be swept aside. We should understand that they are human beings. I had a conversation with them the length of O'Connell Street. They did not threaten me with any violence. They were not rude but they were in despair and we need to do something to help them.

Section 13 may be unlucky for some because it gives a prescriber the option of indicating on a prescription that a branded interchangeable medicinal product should not be substituted if there are clinical reasons not to do so. I would have thought that if something was condraindicated and, for example, it could be damaging to one's liver to take a particular thing, there is an obligation on a doctor in this regard. I do not think it should be an option if the doctor feels like indicating it. The responsibility of the doctor is to the patient. Unless there are reasons against it, I would like to see this section strengthened, if possible, so that the doctor is required in circumstances where there could be damage to the patient's organic well-being to ensure that drug is not prescribed. I note there are clear attempts to ensure generic drugs are as safe as the non-generic ones. There is a time period after which the patent runs out and this allows for the kind of experiments about which I talked and the cost of these and so on.

I would like to raise the question of AIDS. This is a national and international situation and I hope Ireland will continue to play a role internationally in putting pressure on the drugs companies because the combination drug therapy for AIDS is quite astonishingly successful to someone of my generation who saw so many people I knew die in very difficult and traumatic circumstances. Luckily for many people in this country, this combination therapy is available and has remarkable results. In the rest of the world, this is not always the case. I would approve of any move which made these generic drugs available in sub-Saharan Africa. Pressure must be kept on the pharmaceutical companies.

I welcome the Bill, which is a good one. I know there may appear to be an irony in the fact that this side of the House suggested it would take all Stages of the Bill but I think that shows responsibility. I usually oppose this - I am not a member of any party, so there is no party advantage - and think it is bad political practice to take all Stages of a Bill. I have always objected to it but in this case, I would have happily consented to it if it was of help to the Government and the patients. For some reason, this appears not to be possible, which I regret. However, I am not making or attempting to score a party political point. I invariably oppose this procedure but there are times when one must be politically flexible and I would have agreed to it had the Government chosen to put all Stages of the Bill before the House today.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I thank all of the Members who contributed to the debate and thank them for their consideration of, and input into, the legislation. Their points will certainly be taken on board in the progress of this Bill. Senator Byrne offered to sit late and to take all Stages, although his colleague was not in agreement with that earlier. I also acknowledge the offer made by Sentator Cullinane. I too would very much like to see this Bill going through but I agree with the point made by Senator Norris that it is quite complex legislation. It has been promised for a very long time and there has been a lot of pressure surrounding it within the Department. There has been ongoing communication between the Department and the Office of the Attorney General over several months in order to produce this legislation. I wish to pay tribute to the extensive background work that has been done in getting us to this point. There is an understanding that Members would be allowed a reasonable period of time to consider legislation, especially when it is very complex and that is the balance that must be struck. It is safer to take our time on this and to allow time for people to give it adequate consideration.

I wish to reiterate my commitment and that of the Government to maintaining and improving access to medicines for Irish patients. As I have said on a number of occasions, this must be done in the most cost-effective and efficient manner possible. The core objective of this Bill is to achieve value for money while maintaining and improving levels of service. I wish to make clear that by cost-effective, I mean paying the most appropriate price for a particular product. There is no longer any justification, if there ever was, for paying a premium for a particular brand of medicine when an equivalent medicine, as assessed by the Irish Medicines Board, IMB, can be supplied at a much more competitive price.

Photo of David NorrisDavid Norris (Independent)
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Hear, hear.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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It is very important to emphasise that patients will continue to be able to obtain their necessary medications from their community pharmacist and that patients and tax payers will benefit from paying less for their medications. Moreover, this Bill also provides that if, in the opinion of a prescriber, there is a clinical reason why a medicine should not be substituted, then the patient shall receive the prescribed medicine at no extra cost.

The second core element of this Bill is the placing of the current HSE reimbursement list on a statutory footing. This is a timely provision and will support the introduction of a system of reference pricing and generic substitution.

Senator MacSharry raised the question of the transparency directive and in that context I wish to clarify that this Bill, if passed, and the associated regulations will meet the requirements of the current and proposed directive. A number of Members raised the question of safety, which is of paramount concern to us all. The IMB has, and will continue to have, responsibility for the approval of medicines, both originator and generic, on the basis of safety, quality and efficacy. The IMB will designate medicines as interchangeable with strict regard to safety. The robust systems that are being provided for will ensure that the issue of safety continues to be of paramount importance.

Senator Quinn raised the issue of falsified medicines which is a matter of grave concern, particularly because of the wider use of the Internet. In that context, a directive is due to be transposed in January of 2013 which will greatly improve the powers to deal with counterfeit medicines.

Senator Byrne and others raised the question of savings in the health budget. We all know that the bill for medicines in this country is unacceptably high. The most recent figures available indicate that it represents approximately 17% of total health spending, which is not sustainable. The equivalent figure for the UK is approximately 9%. The Acting Chairman referred to the fact that medicines are much cheaper across the Border. We must bring costs and prices more into line with the UK. It is important to point out that the savings targeted in the budget are largely related to direct price cuts and not the provisions of this legislation. We certainly must get better value for the considerable spend we make. We must reduce the prices and get a better deal from the suppliers in the industry. There is much talk about the need to bring new medicines on stream as soon as possible but we can only afford to do that if we manage to drive down the total drugs bill. There is no space within the health budget for the very considerable additional costs of many of the new medicines coming on stream unless we can drive down the cost of existing medicines.

This legislation is important from a cost point of view but it will not deliver a big bang this year or next. The target savings in a full year from this legislation are approximately €10 million. However, over the medium to longer term, the potential exists to make significant savings on an ongoing basis, principally by driving competition in the market. In that way, prices will be driven down and we will all benefit from that. It is not something that will happen overnight, however, but over a longer period of time.

The Acting Chairman raised the issue of Warfarin and Pradaxa and the HSE is seeking to identify the opportunity costs from moving from Warfarin to Pradaxa. This is an ongoing process. The issue of drug addiction was also raised by Members and the fact that the extent of the problem is clear if one walks through the centre of Dublin. It has taken quite some time to get acceptance for drug addiction treatment facilities, a number of which now operate in the city centre. It is a good thing that such facilities are available but while there is a perception that there is a concentration of them in the city centre, the figures do not bear that out. There is a very wide spread of facilities across the greater Dublin area. I recently looked at the figures for people attending the four treatment centres in the city centre and 85% of them were from the immediate local area. Often those services are blamed for the very unacceptable anti-social activity and drug dealing that is going on in the city centre but that is predominantly a policing issue, in my view, which needs to be addressed. In the past week I saw some very welcome figures indicating that the waiting lists for drug treatment centres have reduced considerably over the past year.

Under Section 13 (2), the Minister shall make regulations regarding GP and clinical exemptions. The Medical Practitioners Act, 2007, will be amended accordingly to take note of these regulations.

In conclusion, the general criteria set out in the Bill and the regulations to come from it will assist the HSE in making timely decisions regarding reimbursement, will provide clarity for the pharmaceutical industry on the application process and ensure that the HSE achieves best value in the provision of medicines under the General Medical Services and the Community Drugs schemes.

I thank all Members of the House for their contributions and I look forward to the Bill being further considered on Committee Stage.

Question put and agreed to.

Photo of Terry BrennanTerry Brennan (Fine Gael)
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When is it proposed to take Committee Stage?

Photo of Colm BurkeColm Burke (Fine Gael)
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In the next session.

Photo of Terry BrennanTerry Brennan (Fine Gael)
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When is it proposed to sit again?

Photo of Colm BurkeColm Burke (Fine Gael)
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At 10 a.m. tomorrow.