Written answers

Tuesday, 19 January 2010

Department of Health and Children

Cost of Medicines

9:00 pm

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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Question 358: To ask the Minister for Health and Children the recent discussions with the representative bodies of the drug manufacturers to achieve reduction in drug prices of €141 million; the way she expects to achieve these savings; and if she will make a statement on the matter. [48525/09]

Photo of Mary HarneyMary Harney (Dublin Mid West, Independent)
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Over the last number of weeks, I have been having discussions with the two representative bodies of drugs manufacturers - the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers in Ireland (APMI) - with a view to securing significant savings in the State's drug bill.

I am pleased to advise the House that agreement has been reached with IPHA on price cuts of 40% for a large number of drugs and medicines with effect from 1 February next. In addition, the rebate paid by IPHA member companies to the Health Service Executive in respect of drugs supplied under the GMS scheme is to be extended to include all community drugs schemes and increased from 3.53% to 4%. The combination of these measures plus consequent savings in wholesale and retail mark-ups are expected to result in savings of approximately €94m in a full year.

I am disappointed to say that APMI member companies have declined to offer any reductions in the price of the generic drugs and medicines that they supply at this time. The current agreement with APMI expires on 1st September 2010 and it is my firm intention to obtain savings from APMI of at least an equivalent level to those secured from IPHA. Such an outcome would yield savings of approximately €27m in a full year.

I am committed to bringing forward further measures to reduce the State's drugs bill. To address rising costs in both the GMS and Long Term Illness schemes, and to influence to some degree demand and prescribing patterns, a 50 cent charge per prescription item shall be introduced, subject to a monthly ceiling of €10 per family. The details will be set out in new legislation which is required to give effect to the introduction of prescription charges and the expected implementation date is 1st April 2010.

It is also my intention to introduce a system of reference pricing combined with generic substitution under the GMS and community drugs schemes. A working group, comprising of officials from my Department and the HSE, and chaired by Mr Mark Moran, is progressing this initiative, which will encourage greater use of cheaper generic alternatives and lead to further savings in the State's drugs bill. I expect to see significant progress on this in 2010, including the identification and implementation of legislative and administrative changes required to give it effect.

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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Question 359: To ask the Minister for Health and Children the working group to examine reference pricing and generic substitution; the membership of this group; when she expects the group to report; the details of the reference pricing; the estimated savings she expects to achieve through the introduction of reference pricing; if legislation is necessary for this change; and if she will make a statement on the matter. [48526/09]

Photo of Mary HarneyMary Harney (Dublin Mid West, Independent)
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It is my intention to introduce a system of reference pricing combined with generic substitution under the GMS and community drugs schemes. A working group, comprising officials from my Department and the HSE, and chaired by Mr Mark Moran, is examining options to progress this initiative, which will encourage greater use of cheaper generic alternatives and lead to further savings in the State's drugs bill. I expect to see significant progress on this in 2010, including the identification and implementation of legislative and administrative changes required to give it effect.

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