A new agreement has been reached between the State and the pharmaceutical industry, which should save taxpayers up to €300 million over the next four years, it was announced yesterday.
The agreement between the Health Service Executive (HSE) and the Irish Pharmaceutical Healthcare Association (IPHA) is in respect of the prices it pays for drugs for medical card holders and hospitals between now and 2010.
Essentially the pharmaceutical industry has agreed to reduce the price of drugs by 35 per cent once they come off patent where a substitute is available, and it has, among other things, also agreed to take back from hospitals drugs with a short shelf life if they are unused.
In addition, when new drugs come on the market the price the State pays for them will be set against prices in nine other EU countries rather than against prices in just five EU states, as has been the case up to now.
To date prices have been set against those in the UK, France, Denmark, Holland and Germany, which are regarded as higher-price countries, but in future prices in Spain, Austria, Finland and Belgium will also be used for comparative purposes, and this should bring down prices. In Spain and Austria in particular drug prices are lower.
Minister for Health Mary Harney welcomed the agreement and said she expected it would have a knock-on effect on the price of drugs for all consumers, pushing down prices.
Furthermore, she said the HSE would now enter negotiations with drugs wholesalers, domestic manufacturers and community pharmacists, with a view to making even more savings to the State's drugs bill.
Money saved would go on new services for patients, she said, but she ruled out using the savings to hand out more medical cards.
She added that there was nothing in the agreement that precludes the vigorous promotion of generic prescribing. "And we will be pursuing this in the future," she said.
The State's drugs bill has increased rapidly over the past decade and is currently estimated at €1.8 billion a year. The HSE said drugs expenditure is currently increasing by 14.6 per cent per year. It estimates the new deal will reduce annual drug price increases to approximately 6 per cent.
IPHA president Conn Clissmann said the agreement was "good news for Irish patients".