Michael Lowry (Tipperary North, Independent)
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264. To ask the Minister for Health the progress that has been made to date in cutting the drugs spend in the State; the steps that will be taken to encourage health care professionals to prescribe generic drugs; and if he will make a statement on the matter. [20823/13]

James Reilly (Dublin North, Fine Gael)
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Following intensive negotiations involving the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health, a major new deal on the cost of drugs in the State was concluded in October last. It will deliver a number of important benefits, including

- significant reductions for patients in the cost of drugs,

- a lowering of the drugs bill to the State,

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

- reducing the cost base of the health system into the future.

The gross savings arising from this deal will be in excess of €400m over 3 years. €210 million from the gross savings will make available new drugs to patients over 3 years. Thus, the deal will result in a net reduction in the HSE expenditure on drugs of about €190m. The Department of Health and the HSE have also successfully finalised discussions with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic industry, on a new agreement to deliver further savings in the cost of generic drugs. It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013.

The Health (Pricing and Supply of Medical Goods) Bill 2012, which is currently before the House, provides for the introduction of a system of generic substitution and reference pricing. These reforms will promote price competition among suppliers and ensure that lower prices are paid for these medicines resulting in further savings for taxpayers and patients. The Bill passed Committee Stage in the House on the 19th of March. Report Stage was initiated on the 24th of April and is scheduled to resume on the 9th of May. I hope that the Bill will complete its passage through both Houses shortly thereafter.

It is not possible, at this juncture, to provide accurate figures regarding potential savings resulting from the introduction of generic substitution and reference pricing, as these depend on various factors including prevailing prices, number of competitors, availability of substitute products, and market dynamics.

In addition, the recently established HSE Medicines Management Programme has identified ‘preferred drugs’ for prescribers when prescribing Proton Pump Inhibitors (PPIs) or statin medication for patients. This is the first time that the State has introduced a preferred drug initiative. PPIs are prescribed for patients with peptic ulcer disease and/or reflux and statin medication is for high cholesterol. The preferred PPI is Lansoprazole and the preferred statin is Simvastatin. The HSE is asking doctors to prescribe these preferred drugs in order to save money, both for patients who pay for their medication and to deliver savings of an estimated €15million for the taxpayer.

The Department is also committed to establishing high-level annual targets by the end of September for the share of generic penetration over the medium-term. These targets will be informed by the findings of a report currently being completed by the ESRI which is examining the usage of generics in Ireland and comparable EU jurisdictions.