Government reaches deal with pharma firms on drug prices

But opponents say agreement will block biosimilar drugs from entering Irish market

A new agreement has been reached between the Government and the Irish Pharmaceutical Healthcare Association (IPHA) on the supply of medicines that will reduce the costs paid by the HSE.

The Department of Health said it would result in savings of around €600 million from IPHA companies, and €150 million from others.

However, opponents of the agreement claim it is a “big promise but a bad deal” and say it will block access to biosimilar medicines.

The four-year deal between the IPHA and the Government is intended to facilitate access to new medicines. Prices will be set to an average of 14 European countries, with Greece, Italy, Sweden, Portugal and Luxembourg added to the existing nine countries used for comparisons, and and will be reduced on a yearly basis.


The agreement was welcomed by Minister for Health Simon Harris, who said the pricing provisions were a “significant improvement” on previous agreements.

“The Government wants to ensure that Irish patients continue to have access to new and innovative medicines and that Ireland remains at the forefront of its European peers in terms of early access to medicines in an affordable manner and within available resources,” he said. “As a result of this agreement with IPHA, the HSE will be in a much stronger position to meet the increasing demand for existing medicines and also to invest in new medicines over the next four years.”

Under the deal, the price of existing patent-expired medicines will be reduced to half of the original ex-factory price, removing the phased reduction to 50 per cent that the 2012 agreement had. A new hospital rebate has been added, with a 5.25 per cent rebate applying to hospital products from june 1st, and increasing to 5.5 per cent from August 1st 2018. The rebate to the PCRS community schemes will rise to 5.25 per cent from the existing 4 per cent rate from June 1st, and to 5.5 per cent from August 1st 2018.

When a biosimilar product enters the market, existing biologic medicines will be discounted by 20 per cent and the rebate will be icnreased to 12.5 per cent.

Dr Leisha Daly, president of IPHA, said the deal would provide access to new medicines for patients here, and the four-year period of the agreement would ensure stability in the supply of medicines to patients.

“It is essential that patients have early access to life- saving and life-enhancing new medicines,” she said. “This agreement is the best way to make that happen.”

The IPHA deal is with its members, which include around 50 companies here, such as Pfizer, Allergan and Biogen Idec.

The Healthcare Enterprise Alliance, which represents the generics and biosimilars sector, criticised criticised the decision to negotiate with one group, describing it as a missed opportunity.

"The logic of negotiating with some, not all, shows a clear lack of understanding of the dynamics involved in healthcare advancements," said HEA president Sandra Gannon.

The group said the agreement blocks competition, preventing new, better value drugs entering the market due to what it described as and artificial pricing clause in the agreement. Biosimilars can be up to 30 per cent cheaper, and other European countries are making to moves to speed up the use of such medicines.

“Competition and innovation are the biggest drivers in delivering better value medicines to patients,” she said. “We have seen in recent years what can be achieved by bringing a reforming ethos to medicine prescription, dispensation and pricing. This agreement halts that momentum.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist