State's drug bill could fall by up to €400m under new deal
THE DEPARTMENT of Health and drug manufacturers are close to a deal that could cut the State’s drugs bill by up to €400 million.
Although some details remain to be ironed out, an agreement cutting the annual cost of drugs for the next three or four years is expected to be struck next week.
Any deal that yields significant savings will come as a godsend to Minister for Health James Reilly, who has been heavily criticised recently over health spending overruns.
The deal with the Irish Pharmaceutical Healthcare Association is expected to yield savings of €30 million to €40 million for the remaining months of this year, less than the projected €60 million to €70 million forecast by the Minister, according to sources close to the talks.
However, with the troika exerting heavy pressure on the Government to rein in health spending, any substantial injection of immediate cash will be welcomed by the department.
Crucially, the deal takes in new drugs being developed by the pharmaceutical firms. These include expensive treatments for cancer and hepatitis C, as well as a new blood-thinning agent.
The deal could also see agreement on reimbursement for Kalydeco, a promising but expensive new treatment for some forms of cystic fibrosis. Ireland has the highest incidence of the condition in the world.
The association represents the makers of branded drugs, although the firms involved also manufacture some off-patent medicines. Talks with the group representing generic drug-makers, the Association of Pharmaceutical Manufacturers in Ireland, have yet to get under way.
Drug prices are to be cut across the board, with a bigger cut applying to off-patent medicines. Sources said that in both cases the reduction would be less than the 7-8 per cent originally suggested.
Although the deal will save the HSE significant sums of money, its impact for consumers will be limited. This is because the prices of most generic drugs, which can range up to 94 per cent of those of their branded equivalents, are not affected.
The mark-up charged by pharmacists to private patients also remains unaffected. The prices Irish consumers pay for their medicines are among the highest in the world.
Talks between the department and drug companies collapsed last February after the industry walked out over disagreements about the inclusion of approved new drugs on the reimbursement list.
The cost of medicines in the health service was €1.9 billion in 2010 – almost 13 per cent of the total budget of €14.8 billion.