Ivor Callely (Dublin North Central, Fianna Fail)
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Question 204: To ask the Tánaiste and Minister for Health and Children the reason some prescription medications cost significantly more here than in Ireland's European neighbours such as Spain and Portugal. [20516/06]

Ivor Callely (Dublin North Central, Fianna Fail)
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Question 205: To ask the Tánaiste and Minister for Health and Children the action which is being taken to address the price disparity of some prescription medications when comparing prices in Ireland's European neighbours such as Spain and Portugal. [20517/06]

Ivor Callely (Dublin North Central, Fianna Fail)
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Question 206: To ask the Tánaiste and Minister for Health and Children her plans to adjust the formula agreed with the Irish Pharmaceutical Health Care Association and the Department of Health and Children that links Irish prices of prescription medications to Denmark, France, Germany, the Netherlands and Britain which reflects Ireland's proximity but means that the cost structure here reflects Northern European prices which are much higher that the EU average; and if she will make a statement on the matter. [20518/06]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 204 to 206, inclusive, together.

As, through their national reimbursement schemes, EU member states are the main purchasers of medicines in their domestic markets, they naturally seek to control drug prices, but the extent of this control varies widely. Higher priced countries, such as the UK and Germany, rely more on market forces to set prices. Spain and Portugal, on the other hand, closely regulate and control prices. Ireland's pricing policy is somewhere in the middle of the European league as, with its relatively small market, it must seek to balance value for money in state drug spending with reliability and continuity of supply for essential products.

Price comparison in different markets is difficult. Patent protection in Ireland allows originator companies exclusive rights to the market for ten years for new medicines. In Spain, until 1992 there was no intellectual property protection for medicines and no patent protection for new products. This has kept prices down, but may change with patent and intellectual property exclusivity, although the long lead-in time for product development and patenting will inevitably delay this. In addition, some products that are prescription-only in Ireland are available without prescription in Spain. While the removal of prescription status for certain products may produce lower prices in Ireland, these products would no longer be reimbursed by the State.

I have previously expressed concern about the sustainability of the increasing cost to the Exchequer of drugs and medicines. It is essential to secure maximum value for money for this spending. All aspects of the drug delivery system, from the manufacturer to the patient, are being reviewed by my Department and the HSE. 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 the benefits of post-patent competition and addressing supply chain costs, such as wholesale and pharmacy mark-ups.

Negotiations are currently underway with the Irish Pharmaceutical Healthcare Association (IPHA) 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. The level at which Irish prices are indexed to those in other EU member states is among the issues being addressed in these negotiations.

I must stress that no single measure will contain the rate of increase in expenditure on medicines and drugs. Indeed, 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.