Drugmakers say deals delivered ¤800m in savings
Successive price agreements between the State and manufacturers of branded drugs have delivered more than ¤800 million in savings over the past five years, the industry has said.
However, much of these savings have been “cannibalised” by increased demand for medicines as the number of people with medical cards soars, according to the Irish Pharmaceutical Healthcare Association (Ipha).
Working from new figures from the HSE, the association estimates that cuts in the price of drugs since 2007 have saved ¤355 million from the General Medical Services scheme (medical cards); ¤363 million from the Drugs Payment Scheme; and ¤100 million from the Long-Term Illness Scheme. The estimate is arrived at by applying 2006 prices to the volumes of drugs sold since then.
Ipha commercial affairs director Orlaith Brennan said the savings were greater than the industry had previously predicted because of increased sales volumes and the Government’s decision to increase the threshold applying to the Drugs Payment Scheme.
The amount of money saved had been increasing in recent years, she said, and this trend would continue as a result of the latest price agreement between the Department of Health and the industry last year. This stipulated that both on- and off-patent products are priced lower than the average for the basket of countries used to determine Irish prices.
The industry has strenuously contested the public perception that Irish drug prices are high by international standards, pointing to nine sets of price reductions for patented drugs since March 2007. However, Ms Brennan said the ingredient cost of medicines was the only part of the pricing structure over which Ipha members had control.
“There are also wholesaler and pharmacy fees and margins, and VAT, all of which also vary across the EU. Thus, when a person gets a prescription in another EU country the difference in price is due to a mix of these costs – the product itself and the distribution and professional charges.”
Price drops have had an impact on members, most of whom have had to reduce their sales and headquarter staff, Ms Brennan said.
The attention of policymakers is increasingly turning to the price of generic drugs, which a recent survey showed could be up to 24 times more expensive in Ireland compared to Britain.
The association represents some of the biggest names in the patented drug sector – Pfizer, Roche, Eli Lilly, AstraZeneca and Novartis – though these companies also sell drugs that have gone off patent.
Ms Brennan said the price of both off-patent and on-patent medicines had dropped significantly while still facilitating access for Irish patients to the best medicines available.