James Reilly (Dublin North, Fine Gael)
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Question 273: To ask the Minister for Health and Children if the Financial Emergency Measures Services in the Public Interest Act 2009 will be used to set the price of goods supplied by pharmacy retailers as distinct from setting the price of services; and if she will make a statement on the matter. [27776/09]

Mary Harney (Dublin Mid West, Progressive Democrats)
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Under the Financial Emergency Measures in the Public Interest Act 2009, the wholesale mark-up paid to pharmacists is being reduced from 17.66% to 10%. This will have the effect of reducing the cost of drugs dispensed under the GMS and community drugs schemes. The following example illustrates the change. When the wholesale mark-up was 17.66% a pharmacist would have received €100 for a drug with an ex-factory price of €85. With a 10% wholesale mark-up, the pharmacist will receive €93.50 for the same drug at the same ex-factory price, yielding a saving to the State of €6.50. The total expected full year savings from this measure are €77 million.

I might also mention that my Department and the HSE concluded agreements with the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers of Ireland (APMI), representing the proprietary and generic manufacturers respectively, in mid-2006. As a result of these agreements there have been reductions, totalling 35%, in the price of a range of off-patent drugs and medicines.

A report published by the National Centre for Pharmaco-economics in May 2009 has estimated that a total of €248.5 million will be saved due to off-patent price cuts, up to August 2010, when the agreements come up for renewal.

My Department and the HSE are continuing to examine all aspects of pharmaceutical expenditure with a view to containing costs. Among the matters which continue to be kept under review are the price of drugs (including generic and off-patent drugs), the volume of drugs prescribed, more cost effective prescribing by GPs and the greater use of generic medicines.

Under the measures mentioned above, the State is setting a price at which it pays for drugs, ingredient and distribution costs. It is not setting the price which any party in the supply chain - manufacturers, wholesalers and pharmacists, may charge for drugs sold which are not reimbursed by the State.