Seán Fleming (Laois, Fianna Fail)
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26. To ask the Minister for Health how Ireland’s expenditure on medicines compares to other European Union member states when considered as a share of overall health expenditure. [20976/16]

David Cullinane (Waterford, Sinn Fein)
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43. To ask the Minister for Health why, according to 2013 figures from the OECD, Ireland had the highest per capita spend on medicines in the European Union; the areas in which the €775 million in savings in the drugs bill have been made including a breakdown of this; and if he will make a statement on the matter. [20935/16]

Simon Harris (Wicklow, Fine Gael)
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I propose to take Questions Nos. 26 and 43 together.

OECD statistics serve as a useful metric to compare expenditure in medicines and other areas. However, per capita figures represent one of a number of metrics that can be used to develop a view of drugs spending in Ireland. For example, aggregate spending on the GMS, Drugs Payment Scheme, and Long Term Illness scheme has reduced since 2009, despite an increase in numbers with eligibility and the introduction of more expensive new medicines, such as new oral anticoagulants.

According to OECD data for 2014, the last year for which full figures are available, expenditure on prescription and over-the-counter medicines accounted for just over 14 percent of overall health expenditure in Ireland. Although this was higher than several other EU countries, including Denmark, Finland, and Belgium, it was lower than Germany, France, Italy, and Spain, and significantly lower than Greece or Hungary.

OECD data on pharmaceutical prices is based on list prices of products. Such data does not consider the actual commercially confidential discounted prices in place, and therefore has limitations. In addition, expenditure on medicines in hospitals is excluded in the OECD statistics. Many expensive speciality medicines are provided in primary care settings in Ireland, meaning that Ireland's spend per capita is over-stated relative to EU countries in which these medicines are supplied mainly through hospitals.

The prices of medicines vary between countries for a number of reasons, including different prices set by manufacturers, different wholesale and pharmacy mark-ups, different dispensing fees and different rates of VAT. The size of the market can also be a factor in the prices set by manufacturers.

We will continue to build on a number of measures implemented in recent years to reduce the cost of medicines; these measures include the establishment of the HSE's Medicines Management Programme, which has a particular focus on cost-effective prescribing, and the continued implementation of generic substitution and reference pricing.

My Department has recently created a new Community Pharmacy, Dental, Optical and Aural Policy unit to bring a renewed focus to the development of policy in relation to community pharmacy and the issues associated with achieving maximum benefit to patients.

Negotiations and agreements with industry represent just one element of the Government’s strategy to reduce expenditure on medicines; other initiatives will continue to be pursued in the coming months and years to ensure that we achieve affordable prices for medicines for both patients and the State.

A negotiating team representing the State recently reached agreement in principle with the Irish Pharmaceutical Healthcare Association on a new drug pricing and supply agreement. Until the agreement is finalised, I cannot comment on any anticipated savings.