Pat Carey (Dublin North West, Fianna Fail)
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Question 742: To ask the Minister for Health and Children if her attention has been drawn to the fact that drugs, both prescription and non prescription, are considerably more expensive here compared to other EU countries, for example Spain and so on; and if she will make a statement on the matter. [1624/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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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 kept prices down, but may change with patent and intellectual property exclusivity. In addition, some products that are prescription-only in Ireland are available without prescription in some other states. While the removal of prescription-only status for certain products may produce lower prices in Ireland, these products would no longer be reimbursed by the State.

The Deputy will be pleased to know that my Department and the Health Service Executive concluded negotiations in 2006 with pharmaceutical manufacturers on important new agreements setting out the pricing and supply of medicines for the Irish health service.

These agreements provide increased value for money for the State and the consumer through a reduction in the price of existing drugs and medicines coming off patent and through the use of a wider basket of countries for pricing new drugs. Over the period of the agreements, which run to 2010, it is expected to achieve savings of the order of €300 million across the GMS and community drugs schemes, and in the cost of drugs to hospitals, through off-patent price cuts of 35% for drugs with substitutable alternatives. In addition to the savings quantified, there will be further savings as generic manufacturers respond to the lower price of branded drugs.

There will also be savings through the use of a wider basket for pricing new medicines, along with two price reviews for new medicines over the term of the agreements. The new basket includes some traditionally lower priced countries, including Spain and Belgium, which will benefit the consumer over the medium term. Finally, for the first time, reimbursement of new drugs in Ireland can now be informed by pharmacoeconomic assessment, in line with other EU countries.

These agreements are the first stage in a process approved by the Cabinet Committee on Health to examine all aspects of the drug delivery system, from the manufacturer to the patient, in order to achieve greater value for money from the State's spending on drugs and medicines and in the operation of the drugs schemes, consistent with patient safety and continuity of supply.

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.