Fergus O'Dowd (Louth, Fine Gael)
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Question 125: To ask the Minister for Health and Children if she will respond to correspondence from a person (details supplied) which shows that the cost of the medical prescription Omeprazone 20mgs costs €51.13 in County Louth while the same prescription costs £7.92 in Newry, Northern Ireland; and if she will make a statement on the matter. [7434/10]

Mary Harney (Dublin Mid West, Independent)
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The price of medicines supplied to patients in Ireland under the GMS and community drugs schemes is built up as follows. Firstly, ex-factory prices are set in accordance with agreements between the Health Service Executive (HSE) and pharmaceutical manufacturers. Secondly, in addition to reimbursing pharmacists the ex-factory price of the product, the HSE also pays a wholesale mark-up of 10%, a dispensing fee of up to €5 and a 20% retail mark-up. (This is not applicable in the case of medical card prescriptions). There are substantial differences between Ireland and the U.K. in the procurement, pricing and reimbursement structures for medicines. It is difficult, therefore, to comment on the apparent price differential quoted by the Deputy for transactions in Co Louth and Newry without detailed information concerning the brand supplied, the pack size and any other factors that may be relevant.

The HSE publishes on its website a list of the drug prices it reimburses to pharmacists which are the ex-factory price plus a 10% wholesale mark-up. In the case of Omeprazole 20mgs tablets, reimbursement prices range from €4.53 for a 7 tablet pack to €19.20 for a 30 tablet pack. For a person availing of the Drugs Payment Scheme, a pharmacist would add a 20% retail mark-up and a dispensing fee of up to €5. This would mean that the cost of Omeprazole 20mgs tablets available here and supplied under the DPS can range from approx €10.43 for a 7 tablet pack to €28.04 for a 30 tablet pack. On the basis of the information available to me it would appear that the price quoted in Co Louth includes a 50% retail mark-up and does not reflect the recent 40% price reduction. If that is the case, it is clearly unsatisfactory and unfair to a DPS card holder.

My Department and the HSE have implemented a number of reforms to reduce the cost of medicines for both the State and patients. Under the terms of Agreements in 2006 between the HSE and pharmaceutical manufacturers, price cuts of 35% were applied to all proprietary products for which generic alternatives are available on the Irish market. Following recent discussions with the Irish Pharmaceutical Healthcare Association (IPHA), further price cuts of 40% have been applied for a large number of drugs and medicines with effect from 1 February. It is important to note that these price cuts apply to all transactions and not just those under the various State schemes.

I will continue to examine all options for containing pharmaceutical expenditure and reducing the prices of medicines for both the State and patients. In this regard, the Government has approved my proposal to introduce a system of reference pricing combined with generic substitution under the GMS and community drugs schemes. This 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.