Varadkar blames high drug prices on greed

Minister claims drug companies are ‘picking off’ small countries with higher prices

Minister for Health Leo Varadkar has criticised international drug companies that charge Ireland and other small countries "unbelievably high prices" for life-saving new drugs.

Mr Varadkar accused the companies of “greed incorporate” over pricing policies that put health budgets under severe strain.

Speaking at the publication of the 2016 HSE service plan, the Minister claimed drug companies were “picking off” small countries by getting them to set high prices that were “way above” the cost of manufacturing and innovating, and then going to bigger countries and discounting these same drugs.

There is no extra provision in the HSE plan for extra spending on high-tech drugs in 2016, despite the fact the spending on this scheme doubled in the previous five years.


If returned as minister for health after the election, Mr Varadkar said he intended to have the issue addressed on a Europe-wide basis.

"If Europe is worth anything," he said, "we should be coming together and using the European Medicines Agency to negotiate on behalf of Europe and not allow a situation where patients are used as pawns and small countries are picked off by companies that turn enormous profits and pay huge salaries to their executives."

He admitted that Ireland had approved drugs despite official concerns over price or efficacy, but said this was in relation to orphan drugs where no other treatment was available. It wasn’t sustainable to refuse patients these treatments, particularly if they were available in other countries.

Earlier this year, the Government bowed to patient pressure by approving Soliris, used to treat two rare blood diseases, at an annual cost of €430,000 per patient, even though the HSE described its costs as “astronomical”.

Orkambi, a newly available cystic fibrosis drug, is expected to cost the health service €92 million a year if approved.

The service plan carries a “substantial financial risk” arising from a €100 million shortfall in funding, HSE director general Tony O’Brien said.

He said the HSE preferred to “manage” this financial challenge rather than seek to reduce services, as this was not in the interests of patients and would damage staff morale.

An additional €100 million is available for new developments this year, which will allow “some targeted improvements” to take place, Mr O’Brien said.

“The next year will be about striking a balance between the financial challenges we face while providing an increased focus on quality, safety, access and reform,” he said.

The plan, as published yesterday, has been amended to provide for a projected reduction of 50,000 medical cards next year, rather than the 125,000 originally envisaged.

This change was ordered by Cabinet when approving the plan because of fears among Ministers that it would create an election storm about medical card cuts.

Mr O’Brien stressed that there were no plans to change the eligibility rules for medical cards in any way.

The switch to the forecast of 50,000 fewer cards would be funded by diverting €32 million allocated to the State Claims Agency that would not be needed because of the introduction of period payments of medical negligence settlements next year.

The 50,000 figure was “not a target, simply an assumption,” he said.

The extra money available next year will be spent on mental health (€35 million), acute hospitals (€13 million), cancer services (€10 million) and disability (€7.25 million).

The extension of free GP care to under-12s will cost a projected €13.5 million, though this is subject to a deal being struck with the Irish Medical Organisation.

Among previously unreported initiatives in the plan are the development of new clinical programmes for ADHD and dual diagnosis of mental illness and substance abuse; funding for stroke telemedicine and cochlear ear implants; a doubling of paediatric scoliosis operations; and training for 100 paramedics to ensure more ambulance staff work on the front line.

Additional funding of €2.5 million is being provided to add rotavirus and meningococcal B vaccines to the immunisation programme given to all schoolchildren, subject to the outcome of price negotiations with the manufacturers.”

Paul Cullen

Paul Cullen

Paul Cullen is Health Editor of The Irish Times