Pharmaceutical industry signals it won’t extend drugs agreement

Four-year-old accord on supply and pricing of medicines is set to expire at end of July

The pharmaceutical industry has signalled it will not agree to an extension of an existing deal on medicine costs with the Government that has generated hundreds of millions of euro in savings unless it lifts an embargo on the Health Service Executive HSE reimbursing new drugs, which have additional costs.

The current framework agreement on the supply and pricing of medicines was put in place in 2016 and is due to expire at the end of July.

The agreement between the Government and the Irish Pharmaceutical Healthcare Association (IPHA) has resulted in savings of about €600 million.

However, the pharmaceutical industry is unhappy with the block introduced last year by the Department of Public Expenditure on newly available drugs and medicines being reimbursed by the HSE if they generated additional costs.


Clinical worthiness

The industry believes that about a dozen new drugs which have gone through a process with the HSE on their clinical worthiness and on price have been held up.

It is understood a small number of drugs related to dealing with the Covid-19 pandemic – such as medicines that can lead to the avoidance of hospitalisation of patients – have been authorised in recent months.

New drugs which are budget-neutral or which result in savings being made are being authorised for reimbursement by the HSE.

In the absence of an extension to the current pharmaceutical industry agreement, rebates of about €5 million per month which go to the HSE could be at risk.

IPHA said on Thursday that discussions on a possible extension of the current agreement were “ progressing well”. However it said that “for an extension to be viable, it is vital that we see movement on the reimbursement of new medicines which have satisfied HSE clinical effectiveness and value-for-money tests”.

“There are more than a dozen of these new medicines. They are all widely available in the EU but not for patients here. The key reason they are not available here is that there is no new exchequer funding for new medicines this year despite the HSE’s request for new funding.

“We understand that the medicines budget should be managed to achieve efficiency but it is not sustainable to require the HSE to fund all new medicines into the future from its existing resources.”

Co-funding model

“We look forward to continued constructive engagement with the health authorities over the coming weeks on an extension and on a new agreement. We have suggested that a new agreement takes the form of a co-funding model between industry and the State to cover the cost of new medicines.

“New and existing medicines can be funded with a combination of industry savings, ongoing HSE efficiencies and some new exchequer funding. It needs all three.

“The IPHA will certainly play its part. Without a change in policy, however, patients and their doctors will be left waiting for the new treatments that are already, and continually become, available in many European countries.”

The Irish Times reported in February that the then government rejected a last-minute plea by the HSE board for up to €20 million in special funds for newly available drugs and medicines this year.

The Department of Health told the HSE board that no additional money was available and the costs involved would have to be met from savings.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent