Paying a high price


By reimbursing all new drugs, HSE managers warn that the savings made from the pharmaceutical deal could be wiped out, writes MARTIN WALL

THE DEPARTMENT of Health has said the HSE can impose restrictions on the reimbursement of new expensive oral anticoagulant drugs used to reduce blood clotting.

The HSE had sought clarification of the position of reimbursing drugs such as the new anticoagulant agents – which it estimates could cost €10 million next year – following an interim deal on drug prices reached by the Minister for Health with the pharmaceutical industry last month.

Dr Reilly said the deal with the Irish Pharmaceutical Healthcare Association (IPHA) would see reductions in the price of certain off-patent medicines. He said this could save up to €20 million in a full year.

As a condition of the agreement the HSE was obliged to add to its list of items for reimbursement “drugs which in the normal course of events would have been approved under its schemes”.

However, senior HSE managers warned that a requirement to reimburse all new drugs approved by regulators could effectively wipe out the savings in the interim deal with the industry. The HSE asked the Department of Health whether it had authority to put controls or limits on individual drugs or whether this would constitute “a deal breaker”.

Earlier this month the Department of Health said it would continue to support the HSE in decisions to impose restrictions on reimbursement on oral anticoagulants within appropriate clinical guidelines.

In a confidential letter to the secretary general of the Department of Health, senior HSE managers also expressed concern that the interim agreement effectively tied their hands in parallel talks with individual pharmaceutical companies on drug prices which were under way at the time.

In the letter on June 25th, the HSE’s drugs committee said the organisation had had little or no prior notice of the deal and no forewarning that the department would accept conditions set by the pharmaceutical industry.

The chairwoman of the drugs committee, Dr Susan O’Reilly, who is also the head of the national cancer control programme, said she had been asked by the HSE chief executive, Cathal Magee, to seek direction on a number of issues.

She said the HSE estimated the cost of reimbursing new drugs which fell within the terms of the conditions attached to the interim agreement would be to the order of €13 million in a full year. She said the HSE had also recently put in place arrangements to reimburse two Hepatitis C drugs and another drug called Ipilimumab for the treatment of melanoma which could cost €15 million annually between them.

“The HSE has previously estimated that if all new drugs of which it currently is aware [ie those which have applied for reimbursement, are about to apply for reimbursement or are expected to apply for reimbursement in the next six months] were to be funded that it would require to the order of €300 million in the five years between 2013 and 2017.”

Dr Reilly said that while wider negotiations had been under way at industry level, the HSE had been engaged in parallel talks with a number of companies in a bid to “progress reimbursement of their individual drugs”.

“Some progress had been made in relation to individual drugs and possible options had been explored which involved improved commercial offers [budget caps, rebates, etc].”

She said since the Minister’s announcement, a number of companies had indicated they would continue to honour offers that had been made. However, the HSE no longer had any leverage in relation to other individual talks where it had been hoped that an improved offer might be forthcoming.

Dr Reilly said new oral anticoagulant drugs could have a substantial impact on the HSE budget.

“In recognition of the funding challenge, the HSE drugs committee had initially suggested prioritising these agents for funding only for those patients who couldn’t be adequately managed on existing therapies. The HSE had sought and received an offer [prior to the press release] from one of the companies which provided some assurance in relation to the maximum budget impact especially in 2012 and 2013 for their agent.

“However, the agreement removes the leverage which would have enabled the HSE to reach a similar agreement with the other existing market authorisation holder. A third product is expected to market in late 2012.”

Following the announcement regarding the interim IPHA agreement, the HSE sought clarification from the Department of Health on a number of specific details so that it could proceed and could give effect to the interim agreement. The HSE received clarification on the policy direction sought and then proceeded immediately to put in place arrangements to make the drugs available to patients.

The new drugs, which had completed the full evaluation process and have been recommended for reimbursement, have been available to patients since early July.

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