Written answers

Thursday, 13 March 2014

Department of Health

Generic Drugs Substitution

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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276. To ask the Minister for Health the enforcement mechanisms that are in place to ensure that consumers and the Health Service Executive actually benefit from generic substitution and reference pricing; if his attention has been drawn to the fact that in some cases, pharmacists are marking generic drugs up and branded drugs down in order to maintain profit levels; if he will review the working of the new legislation to ensure that the maximum benefit is derived from it by all consumers; and if he will make a statement on the matter. [12716/14]

Photo of Alex WhiteAlex White (Dublin South, Labour)
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Under an agreement reached in October 2012 with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic drugs industry, the maximum price the HSE pays for generic products is 50% of the initial price of an originator medicine. Recent negotiations with the APMI have resulted in additional price reductions being agreed. From 1 April 2014, the maximum price the HSE will pay for generic products will be 40% of the initial price of an originator medicine. This will result in the price differential between off-patent drugs and most generic equivalents increasing from 5% currently to approximately 20%.

The Health (Pricing and Supply of Medical Goods) Act 2013 introduced a system of generic substitution and reference pricing. 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.

In the case of drugs and medicines which are paid for by the HSE, prices are set in accordance with the provisions of the Health (Pricing and Supply of Medical Goods) Act 2013 or the terms of the framework agreements between the Department of Health and the HSE and the representative bodies for pharmaceutical manufacturers in Ireland. However, neither the Minister for Health nor the HSE has any power to set the prices of drugs and medicines purchased by private patients. However, I would be disappointed if all pharmacists were not passing on the benefits of lower prices to patients.

The HSE advises the public that if they are being charged prices which exceed the reimbursement price listed on the HSE website (), plus a dispensing fee of between €3.50 and €5, then they should discuss the differential with their pharmacist to ensure they get the best possible price for the medicine concerned.

Finally, my Department has asked the Pharmaceutical Society of Ireland (the pharmacy regulator) to consider how to provide greater price transparency in retail pharmacies. This examination is ongoing.

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