Gerry Adams (Louth, Sinn Fein)
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To ask the Minister for Health the progress he has made in attempting to reduce the health services pay bill for medicines; the amount of the planned €124 million savings in this area will actually be realised. [44120/12]

James Reilly (Dublin North, Fine Gael)
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The HSE and the Department of Health have reached a successful conclusion with a major new deal on the cost of drugs in the State. The deal is an important step in reducing the cost base of the health system. It has a value in excess of €400 million over the next three years and will mean

- significant reductions for patients in the cost of drugs,

- a lowering of the drugs bill to the State,

- greater access to new cutting-edge drugs for certain conditions, and

- an easing of financial pressure on the health services into the future.

This deal, combined with the IPHA agreement reached earlier this year, means that €16 million in drug savings will be made this year with much greater savings to be achieved in 2013/14/15. It is estimated that the deal will generate savings of up to €116m gross in 2013.

It should be noted that the €124m cost saving target for the community drug schemes in 2012 took account of a number of measures in addition to drug price reductions. These included the increase in the Drug Payment Scheme threshold effective from 1st January 2012; the full- year effect of generic drug price reductions made in August 2011; and FEMPI reductions made in 2011.

This landmark deal with IPHA comes as legislation aimed at reducing the cost of generic drugs makes its way through the Oireachtas. The Health (Pricing and Supply of Medical Goods) Bill 2012, which will introduce a system of reference pricing and generic substitution, is a priority for this Government. It is expected that this Bill will be enacted before the end of the year and will deliver further savings in the costs of medicines for the health service and private patient.

The Department and the HSE will shortly finalise discussions with the Association of Pharmaceutical Manufacturers in Ireland, which represents the generic drugs industry, to deliver further savings in the cost of generic drugs.