Tom Fleming (Kerry South, Independent)
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164. To ask the Minister for Health the progress in the reference pricing method of the drug cost control measure; the approximate savings since its introduction in November 2013; and if he will make a statement on the matter. [7275/15]

Kathleen Lynch (Cork North Central, Labour)
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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 introduces 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. 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 Health Products Regulatory Authority maintains the list of interchangeable medicines and is responsible for determining which medicines should be deemed interchangeable.

The first reference prices were set for atorvastatin in November 2013, since then the HSE has set reference prices for a further 35 medicines and this process is ongoing. Reference pricing is expected to generate approximately €50 million in savings in 2014 and a further €25 million in 2015.

As part of our wider Troika commitments a target for generic penetration of the off-patent market by volume was set at 70% by end 2016. This was to be phased as follows: 60% by end 2014; 65% by end 2015; and 70% by end 2016. By Quarter 3 2014 generics accounted for approximately 67% of the total off-patent market, thus already ahead of target.

The continued implementation of generic substitution and reference pricing remains a top priority. Reference prices will ensure that generic prices in Ireland will fall towards European norms.