Enda Kenny (Mayo, Fine Gael)
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Question 83: To ask the Minister for Health and Children the position regarding her plans to introduce reference pricing; the amount that will be saved from the introduction of reference pricing; her views on whether some categories of medicines are not suitable for substitution; and if she will make a statement on the matter. [25816/10]

Seán Sherlock (Cork East, Labour)
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Question 118: To ask the Minister for Health and Children the discussions she has held on the substitution of generic medicines for branded products; if these proposals will be implemented in 2010; the amount of money expected to be saved by this measure; and if she will make a statement on the matter. [25919/10]

Mary Harney (Dublin Mid West, Independent)
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I propose to take Questions Nos. 83 and 118 together.

The Government has decided to introduce a system of reference pricing combined with generic substitution of medicines. This will promote price competition and deliver ongoing savings for both the State and for patients. Last week, I launched a report, prepared by a joint working group made up of officials and healthcare professionals from my Department and the HSE, which sets out a proposed model for the operation of generic substitution and reference pricing in Ireland. As part of its work the group met with a wide range of stakeholders and received a number of written submissions. Further consultation will take place as part of the regulatory impact analysis. I expect to see significant progress on the implementation of this initiative, including the identification of legislative and administrative changes required to give it effect in 2011.

Reference pricing will deliver direct savings by limiting reimbursement to a common reference price for groups of interchangeable medicines. Indirect savings will also occur as a result of increased price competition. The level of savings will depend upon a range of factors. These include the number and type of products included in reference groups, the relative and absolute prices of products within reference groups and the market response for each reference group. It is anticipated that reference pricing will be initially targeted at high volume products that have the potential to achieve significant savings. It is also of strategic importance that this model is in place as a significant number of drugs are due to come off patent in the coming years.

There are some categories of medicines that are not suitable for substitution. With a system of generic substitution, it is important that all decisions about the interchangeability of medicines are evidence-based and take into account best practice elsewhere. It is envisaged that an expert group will provide guidance on this matter.