Róisín Shortall (Dublin North West, Social Democrats)
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299. To ask the Minister for Health the savings that will accrue to his Department in 2019 arising from the agreement with an association (details supplied); and the way in which this is accounted for in the fiscal space calculations for 2019. [38477/18]

Simon Harris (Wicklow, Fine Gael)
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The 2016 Framework Agreement on the Supply and Pricing of Medicines (available at ), between the State and the Irish Pharmaceutical Healthcare Association (IPHA), is expected to deliver approximately €600 million in savings from IPHA companies over the four year lifetime of the Agreement and €150 million in savings from non-IPHA companies.

The 2016 Agreement represents clear additional value to the State over previous agreements. For example, the reference basket of countries, used to set drug prices in Ireland, has been expanded from 9 to 14 countries, including lower cost countries. Also, the Agreement now provides for an annual price realignment, so that Irish medicine prices can be reduced in line with price reductions across the reference countries. This will ensure the State achieves better value for money on medicines as prices in other basket countries are adjusted downwards over time. In addition, the Agreement provides for a 30% reduction in the price of biologic medicines when a biosimilar medicine enters the market.

A key focus of this agreement is to achieve lower prices in the face of both demographic pressures on expenditure and the continued development of new medicines, many of which pose affordability challenges to the Irish health service and internationally.

The estimated saving for 2019 from the Agreement is €203 m.