Deal between State and pharmaceutical industry to bring drug prices ‘to Europe levels’

A new drug price deal between the State and the pharmaceutical industry will bring medicine costs in Ireland more into line with other European countries, Health Minister Simon Harris said yesterday.

The agreement reached between the Irish Pharmaceutical Healthcare Association (IPHA) and the Government will result in the HSE paying less for medicines from next month.

Mr Harris said an improved pricing mechanism would keep drug prices in Ireland on a “downward trajectory” that would save the taxpayer €600m over the next four years to 2020.

He said an estimated additional €150m in savings would come from pharmaceutical companies outside of the IPHA process.

Drug prices in Ireland are compared with other European countries and the number has been expanded from nine to 14.

The IPHA said prices would be reduced annually, starting on August 1 and on July 1 each year afterwards.

“Consumers who pay the full cost of medicines can also expect to benefit from price reductions,” the association said yesterday.

It said the agreement would see total savings of €785m from IPHA member companies, an average of nearly €200m a year. The State spent €1.7bn on medicines last year.

Simon Harris
Simon Harris

The IPHA president, Dr Leisha Daly, who led the IPHA delegation during negotiations, said it was essential that patients had early access to life-saving and life-enhancing new medicines.

“The agreement is the best way to make that happen. It offers a clear process and sustainable pricing so that new medicines can be made available quickly to patients in Ireland,” said Dr Daly.

There are 38 international pharmaceutical companies in the IPHA, which are part of the agreement, but it may apply to non-IPHA companies if they want to.

Dr Daly said the Government negotiation team had set a demanding challenge for them.

Prices in Ireland will be set to be an average of those in 14 countries, with Sweden, Portugal, Luxembourg, Greece, and Italy added to the list. Already included are Austria, Germany, Belgium, Denmark, Finland, France, Spain, Britain, and the Netherlands.

The Department of Health said the inclusion of lower-priced countries would result in lower prices in Ireland over time.

“By including some lower cost countries in the basket is a significant win for the Irish taxpayer because it brings us much closer to the European average in terms of drug pricing,” said Mr Harris.

Under the new deal, some new, high-cost drugs will be referred to Cabinet for a funding decision for the first time. Mr Harris said he still did not think Cabinet should be making decisions on drugs. However, it would only be a matter for Cabinet after the HSE considered nine different criteria and decided that the drug would be beneficial but additional resources were needed.

Mr Harris said the new deal provided for a “horizon scan” every year so new drugs coming onstream could be considered as part of the budgetary process.

Talks on a new agreement began in March and continued until May when the State threatened to set the reimbursement price if negotiations failed to reach a satisfactory outcome. The previous agreement that ran for three years from 2012 aimed to deliver €400m in savings.

Mr Harris said: “I am delighted that we haven’t had to go ahead and use that compulsory reimbursement tool in relation to IPHA companies. I made a decision to support the HSE’s use of that piece of legislation within weeks of coming into office. I think we have seen the benefits of that — we now have achieved additional savings.”

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