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
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.
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.”