Terence Flanagan (Dublin North East, Independent)
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238. To ask the Minister for Health his views on the price differential for generic drugs (details supplied); his plans to cut the cost of generic drugs; and if he will make a statement on the matter. [3412/14]

Alex White (Dublin South, Labour)
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The State has introduced a series of reforms in recent years to reduce pharmaceutical prices and expenditure. These have resulted in reductions in the price of thousands of medicines. Price reductions of the order of 30% per item reimbursed have been achieved between 2009 and 2013; the average cost per items reimbursed is now running at 2001/2002 levels.

In relation to the specific product Montelukast, the originator product Singulair came off patent in March 2013. Under the terms of the 2012 Agreement with the Irish Pharmaceutical Healthcare Association (IPHA), the HSE reduced the price of Singulair to 70% of its initial price in Quarter 2 2013 and will reduce it to 50% of the initial price in Quarter 2 2014. Under the terms of the 2012 Agreement with the Association of Pharmaceutical Manufacturers in Ireland (APMI), generic versions of Montelukast are currently priced at 50% of the originator initial price. In Quarter 2 of 2014, the price will be reduced to 47.5% of the initial originator price.

The Health (Pricing and Supply of Medical Goods) Act 2013 provides that from June 2013 the maximum price of all new medicinal products reimbursed under the community drug schemes will be set in accordance with the criteria set out in the Act. The Act also provides that the HSE must review all items currently reimbursable under the GMS and other community drug schemes (including prices) within three years to determine if they should remain on the reimbursement list and, if so, what price should apply. In addition, the Act introduces a system of generic substitution and reference pricing. This legislation will promote price competition among suppliers and ensure that lower prices are paid for these medicines resulting in further savings for both taxpayers and patients. It is estimated that reference pricing will yield €50 million in savings in 2014.

Under the Act, the Irish Medicines Board (IMB) is responsible for the assessment for interchangeability of medicinal products. Generic substitution will be introduced incrementally with the IMB prioritising those medicines which will achieve the greatest savings for patients and the State. The Board is in the process of reviewing an initial 20 groups of medicinal products, which equates to approximately 1,500 individual medicines. They include statins, proton pump inhibitors, angiotensin-converting-enzyme (ACE) inhibitors and angiotensin II receptor blockers.

The first List of Interchangeable Medicinal Products, containing groups of atorvastatin products, was published by the IMB on the 7th August 2013. The List has been updated since then by the addition of 11 more priority groups of medicinal products. The IMB is updating the List of Interchangeable Medicinal Products on an ongoing basis and it expects to complete the assessment of the first top 20 priority groups of medicinal products by end Quarter 1 2014. A second list of 20 priority groups of medicinal products has now been identified and this list includes montelukast products. It is expected the IMB will have completed assessment of these 20 groups of products in Quarter 4 2014. Details on when each group of medicinal products will be assessed for interchangeability will be published on the IMB website in due course (www.imb.ie).

Reference pricing involves the setting of a common reimbursement price, or reference price, for a group of interchangeable medicines. It means that one reference price is set for each group or list of interchangeable medicines, and this is the maximum price that the HSE will reimburse to pharmacies for all medicines in the group, regardless of the individual medicine’s prices. The first reference price for atorvastatin products was implemented on 1 November 2013 resulting in a 70% reduction in the price paid by the HSE for these products compared to May 2013. The second reference price for esomeprazole 20mg products was implemented on 1 January 2014 and the HSE expect to implement reference prices for esomeprazole 40mg on 1 February 2014 resulting in a 56% reduction in the price of these products compared to May 2013. The HSE also expect to implement reference prices for rosuvastatin products with effect from 1 February 2014 resulting in a 40% reduction compared to the prices paid in May 2013.

In addition, the consultation process is also underway in relation to three more groups of medicines which have been designated as interchangeable by the IMB – Omeprazole, Lansoprazole, and Pravastatin. It is expected that reference prices will be implemented for these groups of medicines with effect from 1 March 2014. The HSE will continue the process of setting reference prices for the remaining groups of interchangeable medicinal products published by the IMB in accordance with the processes and timelines set down in the legislation. It is expected that 80% by value of the off-patent market for prescribed medicines will be subject to reference pricing by end 2014 resulting in further significant reductions in the price of generic medicines. Reference prices will ensure that generic prices in Ireland will fall towards European norms.