Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

175. To ask the Minister for Health the measures introduced to promote the increased use of generic medicines; the practical implication of same; the amount saved to date; the estimated savings which would be realised by extending this scheme to the next ten most common medicines; and if he will make a statement on the matter. [30459/14]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

180. To ask the Minister for Health if he will quantify the full-year savings that would be realised from the immediate introduction of generic substitution for the 60 most commonly used off-patent medications, excluding AEDs; and if he will provide detail of same based on reference pricing at 70% below branded equivalent, by cost and by volume. [30464/14]

Alex White (Dublin South, Labour)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 175 and 180 together.

Under the EU/IMF Programme of Financial Support, Ireland committed to increasing the share of generic drug usage in the medium-term. My Department set a target of achieving 70% generic penetration of the off-patent market by volume by 2016. In Quarter 1 2014 generic products accounted for almost 63% of the total off-patent market by volume.

A number of enabling measures are being implemented to achieve this target, in particular, the introduction of generic substitution and reference pricing under the Health (Pricing and Supply of Medical Goods) Act 2013. In addition, it is intended to amend the relevant regulations to provide for the mandatory inclusion of the International Non-Proprietary Name (INN) on all prescriptions. Under the legislation, the Health Products Regulatory Authority (HPRA) has statutory responsibility for establishing and maintaining a list of interchangeable medical products. In doing so, the HPRA is required to have regard to a comprehensive set of qualifying conditions, all of which must be complied with before a decision is taken to make a medicinal product interchangeable. A key objective of the Act is to enable patients to opt for lower cost interchangeable generic medicines. Previously, when a specific brand of medicine was prescribed for a patient, a pharmacist could only supply that particular brand, even when less expensive generic versions of the same medicine were available. The Act now permits pharmacists to substitute medicines prescribed, provided that they have been designated as safely interchangeable by the HPRA.

Generic substitution coupled with reference pricing provides patients with an incentive to opt for the cheapest available product, but does not impose any unavoidable additional costs on patients. In general terms, when a pharmacist is presented with a prescription for an interchangeable medicine, which is not the subject of a clinical exemption, the pharmacist is obliged to offer the patient the opportunity to agree to substituting the prescribed product with an interchangeable medicine which is in stock in the pharmacy and is of lower cost to the patient or the HSE, as the case may be. The patient may either accept the interchangeable medicine offered by the pharmacist or opt to receive the branded interchangeable medicine where prescribed. Alternatively, the patient may opt to go to a different pharmacy to receive a less expensive interchangeable medicine.

Generic substitution is being introduced incrementally with the HPRA prioritising those medicines which will achieve the greatest savings for patients and the State. The Authority is in the process of reviewing an initial 40 active substances in accordance with the processes and timescales set out in the legislation. To date the HPRA has completed the assessment of 25 active substances and has updated the List of Interchangeable Medicinal Products accordingly. It is expected that assessment for interchangeability of the first 40 priority active substances (representing 80% of the off-patent market by value) will be completed by end 2014. This process will continue until all medicinal products on the List of Reimbursable Items have been assessed. Full details and information concerning the designation of products as interchangeable is available on the HPRA website through the following link:

The Act also allows the HSE to set a reference price for groups of interchangeable medicines. 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 HSE sets reference prices for each group of interchangeable products in accordance with the criteria set out in section 24(3) of the legislation as follows:

(a) the ability of suppliers of the relevant listed items to meet patient demand for the relevant listed items;

(b) the value for money afforded by the relevant listed items;

(c) the equivalent relevant prices (if practicably available) of the relevant listed items in all other Member States where one or more than one of the relevant listed items is marketed;

(d) the relevant prices of therapeutically similar listed items;

(e) the resource available to the Executive; and

(f) the terms of any agreements in place (whether entered into before, on or after the commencement of this section) between the Executive and any representative body of the suppliers of drugs, medicines, or medical or surgical appliances where the agreement relates, whether directly or indirectly, to the price of one or more of those items.

The HSE will continue the process of setting reference prices for the remaining groups of interchangeable medicinal products published by the HPRA in accordance with the processes and timescales 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 Quarter 1 2015 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. Full details and information concerning the implementation of reference pricing is available on the HSE website through the following link:

It is expected that referencing pricing will save approximately €50 million in 2014. However, it is not possible at this stage to provide accurate figures regarding the potential savings to be generated from extending reference pricing beyond the initial 40 priority active substances, as this depends on various factors including prevailing prices, number of competitors, availability of substitute products, and market dynamics. However, it is the HSE's policy to set reference prices that maximise the savings for the State and patients consistent with protecting continuity of supply for essential medicines in the Irish market. Consequently reference prices will not be set so low as to jeopardise the supply of the relevant medicines.