Who’s making the most from the drug deals?

Ireland has the highest prices for nine out of 13 commonly used generic medicines compared to other European countries

Mon, Jul 8, 2013, 07:56

Can someone really fly to Barcelona, stay in a four-star hotel for three nights and buy a year’s supply of a commonly prescribed drug off La Rambla for less than the cost of the prescription in the Republic? Yes, mad as that may sound, they absolutely can.

The chemical used to relieve the symptoms of reflux is called omeprazole and one of the most popular brands of it in the Republic is Losec, which costs about €35 for a month’s supply. That is €420 annually, to which a patient will have to add the cost of two GP visits, taking the price of this fairly basic treatment to €540.

In Spain, omeprazole sells as Pensa, and a month’s supply costs €3.50, or a year’s supply €42 – €500 blow the cost of the treatment here.

Further afield you can make equally impressive savings. If you need to take blood-thinning low-dose aspirin in the Republic you will pay about a fiver a month, plus €120 a year on two visits to the GP to get your script renewed. That’s €180 a year. You can find 500 identical low-dose aspirin, or 18 months’ supply, selling in the US for under €10. A thousand pain-killing Ibuprofen will cost you €10 in New York.

And you don’t have to travel so far to make big savings on everyday drugs. People living in Dundalk are routinely asked to pay over 300 per cent more for medicines than people living 10 miles away in Newry. Earlier this year this newspaper reported that one regular customer of a pharmacy in the North was able to save himself about €1,300 a year on the cost of four generic drugs by travelling to Newry from Munster. And another reader contacted us recently to say he was saving more than €500 a year by getting drugs for high blood pressure and reflux in Newry, not Dublin, despite the fact the drugs are made in Cork.

Why is this happening? Who is to blame for this crazy state of affairs? The State which has done deals on pricing with the drug-makers? The regulator who decides what drugs need a prescription – and a GP visit every six months as a result – and what ones can be bought over the counter? Those GPS who give us scripts for the most expensive drugs? The pharma companies who invent the drugs? Or the companies who piggyback on those inventions once they go off patent?

Or maybe the finger should be pointed at those on the frontline – the pharmacists who are allowed mark-ups of up to 50 per cent, as well as dispensing fees that seem out of line with the actual work involved?

Benefitting from consumer confusion
The answer is probably all of the above. The way prices of prescription and over-the-counter drugs are arrived at is hideously complicated and it is easy to get confused.

Those who benefit most from consumer confusion are the manufacturers and the sellers of the drugs who can make us pay dearly for our befuddlement.

When it comes to some pricing, however, the fog of confusion lifts and all that is left is a sense that the sick in the Republic are being taken for a ride.

Last week we got a mail from a reader which illustrates how wrong things can be. Not long ago this reader was in Northern Ireland and was able to buy a pack of generic paracetamol for 39p (46 cent). A packet of 12 paracetamol in the Republic, meanwhile, is €1.79. To make the scale of the price difference clearer, it might help to look at the per tablet price. In Northern Ireland it is just 3 cent, while south of the Border it is 15 cent.

The scale of the pricing problem was revealed last month in an extensive piece of research published by the Economic and Social Research Institute (ESRI). It found that some of the most popular generic drugs on sale here cost up to 25 times more than in New Zealand.

It also found that Ireland had the highest prices for nine out of 13 commonly used generic medicines compared to other European countries, and that for drugs still under patent, Ireland was among the three most expensive places in Europe.

When it comes to medication, consumers frequently don’t have a choice – they have to buy the drugs – and while there may be generic equivalents to the branded drugs they have been prescribed, often there is not.

Recent changes will allow pharmacists to swap cheaper generic drugs for branded ones that pharmacists may prescribe, but the savings there may not be all that great.

What baffles many people is why generic drugs cost so much here, relative to the branded equivalents. In other countries it is not like this.

When a new drug comes to market, the company behind it has a window of between 15 and 20 years when only they can sell it. Because the cost of developing drugs is so high, the price is inflated so they can maximise profits in that period. Once it goes off patent, any pharma company can sell knock-offs and can do so without any of the development costs, so they should be much cheaper. But that does not seem to be happening.

High-priced generics
The use of generics has increased dramatically in the Republic in the last two years and their market has doubled since 2010. But even so, the prices are routinely just 10 or 15 per cent less than the original branded drug so the savings to be found elsewhere are not being delivered here. One of the reasons the ESRI identified was a tardiness in realigning prices downwards. Generic prices are initially benchmarked against the (high) branded price but once a deal is done it can stay in place for over five years.

Legislation on drug pricing is on the way, which may address the issue. But the ESRI says a “lack of clarity and precision as to how prices will be set under the Health [Pricing and Medical Goods] Act means that it is not possible to predict with any certainty that pharmaceutical prices in Ireland will fall vis-à-vis comparable member states.”

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