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Ireland forges drug pricing pact with pharma

Could cut drug bill by €400m

Ireland has forged a major new pricing agreement with the pharmaceutical sector which could slash the country's €2bn annual drugs bill by €400m over three years.

The deal between Ireland's Department of Health and Health Service Executive (HSE) and the Irish Pharmaceutical Healthcare Association (IPHA) representing drugmakers will see the price of hundreds of medicines cut by an average of 10 per cent.

Minister for Health James Reilly said the deal was vital, "given the scale of the financial challenges in Health over the next few years", and aside from cutting the costs of medicines for the state and patients would improve access to "new cutting-edge drugs".

Around 50 per cent of the financial value of the deal will come from cuts in the price of patented and generic drugs, while the other half relates to state provision of new and innovative drugs, he said.

Under the terms of the agreement, up to 400 patent protected products which have been available on the HSE Community Drug Schemes prior to 2006 will be subject to a price review.

Meanwhile, the wholesale price of a medicine would be reduced to 70 per cent of the original price one year after patent expiry, and then to 50 per cent of the original price a year later. Drugs already out of patent will see their prices cut to 60 per cent of the original wholesale price from next month, and then to 50 per cent in November 2013, according to the HSE.

The agreement comes as legislation aimed at reducing the cost of generic drugs makes its way through Ireland's national legislature. The Health (Pricing and Supply of Medical Goods) Bill 2012 will introduce a system of reference pricing and generic substitution in Ireland.

22nd October 2012

From: Sales, Healthcare

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