Government seeking to save €50 million from new reductions in drug costs

Private patients purchasing the State’s most commonly prescribed drug, atorvastatin – used to treat high cholesterol – could make savings of up to €280 a year on foot of the Government’s medication costs initiative.

The new system of reference pricing and generic substitution – which aims to generate savings for both the Health Service Executive and individual private patients – starts with atorvastatin products. However, it will subsequently be rolled out to include commonly prescribed drugs for other conditions.

The new system will allow pharmacists substitute the cheapest equivalent drug available for the one prescribed. If a patient opts for the most expensive product he or she will have to pay the difference in cost.

Savings
The clinical head of the medicine management programme at the HSE, Dr Michael Barry, said private patients who are prescribed the 10mg version of atorvastatin would see potential annual savings of €180, while those on 20mg doses could save €280.

The Government is seeking to generate savings of about €50 million next year on foot of the introduction of health service initiatives such as reference pricing and generic substitution. At present the HSE spends about €2 billion on drugs and medicines annually.

An agreement reached with the pharmaceutical industry last year resulted in two reductions in the price of branded drugs, with further savings coming into effect yesterday. The pharmaceutical industry estimated that these measures saved the State nearly €70 million in the first six months of this year.

Generic drugs
However, the Government was also anxious to address the cost of generic drugs – products made by other manufacturers that are similar to and containing the same active substances as branded medicines that have come off patent. These generic drugs had cost up to 90 per cent of the branded product price and concerns were raised that the prices were multiples of those in the UK.

Minister of State at the Department of Health Alex White said the introduction of reference prices would " ensure that generic medicine prices in Ireland will fall towards European norms".

The system of reference prices is being introduced on a phased basis but will start with the groups of drugs on which most money is spent. Another group of drugs – esomeprazole products, used for treating stomach conditions – will come under the reference pricing scheme in the near future.

Minister for Health James Reilly said the new reference prices for atorvastatin products meant the HSE was paying 70 per cent less for them than it was last May.