menu ☰
menu ˟

€47 million in savings now made by reference pricing

31 Aug 2015

Reference pricing generated more than €47 million in savings in 2014, and is expected to deliver a further €25 million in 2015, the Minister for Health has said. Reference pricing “will ensure that generic drug prices in Ireland continue to fall towards European norms”, said Dr Leo Varadkar.

The Government has introduced a series of reforms in recent years to reduce the prices of drugs and medicines which are paid for by the HSE. This has resulted in reductions in the price of thousands of medicines. Price reductions to the order of 30 per cent per item reimbursed were achieved between 2009 and 2013 and the average cost per items reimbursed is now running at 2001/2002 levels.

The State’s current drug pricing agreement with the Irish Pharmaceutical Healthcare Association (IPHA), which commenced in October 2012, “continues to deliver a number of important benefits, including significant reductions for patients in the cost of drugs, a lowering of the drugs bill to the State, timely access for patients to new cutting-edge drugs for certain conditions, and reducing the cost base of the health system into the future,” Minister Varadkar said in the Dáil.

The gross savings arising from this deal will be in excess of €400 million over three years with over half of the savings to be delivered — €210 million — to be reinvested by the State into the provision of new and innovative drugs.

Consideration is now being given to a range of options available to the State in seeking to deliver further savings on the cost of drugs. Such options include entering into a new agreement with IPHA, as well as the possibility of using the legislative powers afforded to the HSE under the Health (Pricing and Supply of Medical Goods) Act 2013 to review and alter prices.

Officials in the Department of Health are currently working with the HSE and the Department of Public Expenditure and Reform “to ensure that the State achieves the best possible deal in terms of future price reductions on the cost of medicines”, said Dr Varadkar.

“I am confident that a new arrangement will be put in place which will ensure that further price reductions are achieved for the benefits of patients and the taxpayer.”

Gary Culliton

Click here to view the full article which appeared in Irish Medical Times