Drug companies lobbied Kenny

The Government was subjected to an intense lobbying campaign by the pharmaceutical industry earlier this year over a HSE decision not to approve for payment new drugs and medicine.

Taoiseach Enda Kenny was warned the decision could have implications for 25,000 jobs and future investment.

Early this year, the HSE decided not to reimburse new drugs that had passed all regulatory stages and were becoming available for use in patients. They included drugs for treating skin cancer and cost up to €85,000.

In correspondence with Mr Kenny, up to 20 multinational drug firms claimed that the HSE move was portraying Ireland negatively and could have "unintended consequences" for Ireland.

The details have emerged against a backdrop of continuing controversy over the price of medicines and Government efforts to curb costs, including the cost of drugs. A recent survey found that the cost of some medicines here is among the highest in the world.

Price referencing

It has also emerged that the price paid for drugs in Ireland is of critical importance for pharmaceutical companies as it influences the price in many other countries, both within and outside the EU, as part of an international price-referencing effect.

Earlier this year the HSE argued that no specific budget had been provided to it to pay for the cost of new drugs and medicines coming on the market after approval.

However, the multinational drug companies argued that a ban on reimbursing new drugs by the HSE represented a breach of a supply agreement with the State.

In June Minister for Health James Reilly reached an interim deal with the pharmaceutical industry that involved reductions in the price of certain off-patent medicines. He claimed 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".

In effect, this meant that the HSE could not refuse to pay for drugs for financial reasons.

In October the Government secured a full agreement with the pharmaceutical industry which it said could generate €400 million in savings over three years. In return for making price concessions, the pharmaceutical companies reinforced the principle that new medicines will be approved under the HSE's drug schemes once they have been proven to be cost effective.

Strong representations

However, new documents released by the Government show that Mr Kenny received strong representations on the cuts by leading pharmaceutical companies. The letters had been written in February and March and many struck a similar tone.

In one, the president of Eli Lilly, John C Lechleiter, was concerned that "your Government's recent decision not to reimburse new medicines puts at risk this aspiration and portrays Ireland negatively to inward investors such as Lilly".

Mr Lechleiter pointed out that Lilly employed more than 700 people in Ireland in two manufacturing sites. "I believe further price cuts and a blanket ban on reimbursement of new medicines could have a number of unintended consequences for the wider Irish economy."

The chairman of Johnson and Johnson, William C Weldon, told Mr Kenny in a letter: "When new medicines are scientifically and independently judged to be of value and improve health outcomes, it is imperative that they are made available to Irish patients."