James Reilly (Dublin North, Fine Gael)
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Question 235: To ask the Minister for Health and Children if she will provide an overview of savings made in the drugs budget during 2009 and 2010; and if she will make a statement on the matter. [31420/10]

Mary Harney (Dublin Mid West, Independent)
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A wide range of measures have been implemented to reduce the cost of supplying medicines to patients under the GMS and community drugs schemes. These include off-patent price reductions, an increase in the rebate paid by manufacturers, the introduction of lower wholesale and retail mark-ups and price reviews of medicines accepted for reimbursement since September 2006.

As provided for under the current agreements between the HSE and pharmaceutical manufacturers, price reductions of 35% are applied on a phased basis for all patent expired proprietary medicines with an available generic equivalent. The National Centre for Pharmacoeconomics estimated that savings of €175 million would be achieved between January 2009 and August 2010 as a result of these price cuts.

In February this year further price reductions of 40% were agreed for a large number of medicines supplied by Irish Pharmaceutical Healthcare Association member companies. In addition, the rebate paid to the HSE in respect of drugs supplied under the GMS scheme has been 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.

In 2009 I made a number of regulations under the Financial Emergency Measures in the Public Interest Act 2009 to reduce the fees and allowances payable to health professionals. In the case of pharmacists, this included reductions in the wholesale and retail mark-ups paid on medicines supplied under the GMS and community drugs schemes. It is expected that savings in the region of €120 million will be achieved in 2010 from the reductions in payments to pharmacy contractors.

The current agreements between the HSE and pharmaceutical manufacturers also provide for a price review in September 2010 of all products accepted for reimbursement between September 2006 and September 2009. The prices of these products will be realigned to the currency-adjusted average price in the nine reference countries. Discussions are also underway with manufacturers of generic medicines and lower prices for generics are expected to be introduced in September this year.