Billy Kelleher (Cork North Central, Fianna Fail)
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631. To ask the Minister for Health further to the OECD publication Health at a Glance 2016 published on 23 November 2016 and in view of the methodological notes and the discussion on comparability on page 120, if Ireland’s public expenditure per capita on pharmaceuticals is validly and definitively characterised as the second highest in the OECD; if not, the reason therefor; and if he will make a statement on the matter. [37746/16]

Simon Harris (Wicklow, Fine Gael)
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OECD statistics are useful for comparing expenditure in medicines and other areas. However, per capita figures are only one of a number of measures that can give a view of drugs spending in Ireland.

The OECD report cited by the Deputy uses data from 2014, the last year for which full figures are available. In 2014, 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 expenditure includes expenditure on both prescription and over the counter medicines but excludes expenditure on Pharmaceuticals consumed in hospitals and other health care settings as part of an inpatient or day case treatment. As acknowledged by the OECD "comparability issues exist with regards to the administration and dispensing of pharmaceuticals for outpatients in hospitals."

Looking at expenditure in Ireland alone, the report noted the significant reversal in the growth of pharmaceutical spending in Ireland between 2009 and 2014. There has also been a number of significant developments since 2014 that will further reduce the cost of medicines in Ireland. The Framework Agreement on the Pricing and Supply of Medicines will reduce the price of medicines to the average of 14 other countries and provides for an annual downward only price realignment. This will ensure that Irish medicine prices continue to reduce in line with price reductions across reference countries. This Agreement is expected to deliver savings of up to €750 million over the next four years.

Other initiatives will continue to be pursued, to ensure that we achieve affordable prices for medicines for both patients and the State.

These include 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.

The implementation of generic substitution and reference pricing has also contributed to significant price reductions. The prices of referenced products are generally 70-80% lower than the prices paid when medicines were on patent. Generic substitution and reference pricing delivered savings of €47 million in 2014 and €94 million in 2015, and ensures that generic drug prices in Ireland will continue to fall towards European norms.

As a result of these measures, the average price of an item dispensed on the General Medical Services Scheme has reduced to below the price paid in 2001 and the average Drug Payment Scheme price is below the price paid in 2000.