Bernard Durkan (Kildare North, Fine Gael)
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696. To ask the Minister for Health the extent to which central procurement and generic prescribing have been each identified and assessed for potential to reduce health service costs without in any way affecting the quality and efficacy of the service; and if he will make a statement on the matter. [23012/13]

Alex White (Dublin South, Labour)
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The Health (Pricing and Supply of Medical Goods) Bill 2012 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 medicines resulting in savings for taxpayers and patients. The Bill passed Report Stage on the 9th of May and will return to the Seanad on the 22nd of May. It is hoped that the Bill will complete its passage through both Houses of the Oireachtas 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.

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.

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.

Furthermore, the European Commission has completed its eighth review of the EU-IMF financial assistance programme for Ireland and has published the technical report by the Directorate General for Economic and Financial Affairs (ECFIN) which assesses programme implementation by the Irish authorities. The report published on 28th January 2013 identifies areas where the joint EC-ECB-IMF mission considers that further efficiencies could be achieved in the health system. This includes compulsory prescription by active ingredient rather than by brand name with exceptions only for 'non-substitutability' cases. The implications of this recommendation are being examined by my Department at present.