Billy Kelleher (Cork North Central, Fianna Fail)
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1067. To ask the Minister for Health the net savings that will be made in 2013 from the reduction in the cost of drugs and other prescribed items; and if he will make a statement on the matter. [45991/13]

Alex White (Dublin South, Labour)
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A major new deal on the cost of drugs in the State was concluded with the Irish Pharmaceutical Healthcare Association (IPHA) in October 2012. 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 IPHA agreement provides that prices are referenced to the currency adjusted average price to wholesaler in the nine EU member states. The prices of a range of medicines were reduced on 1 January 2013 in accordance with the agreement. The gross savings arising from this deal will be in excess of €400 million over 3 years. €210 million from the gross savings will be available to fund new drugs. A new agreement has also been reached with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic drugs industry. From 1 November 2012, the HSE will only reimburse generic products which are priced at 50% or less of the initial price of an originator medicine. This represents a significant structural change in generic drug pricing and should lead to an increase in the generic prescribing rate. It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013.