New pricing structure for medication

The health service is to cut the cost of some drugs by as much as 70% as part of a radical plan being imposed on the pharmaceutical industry.

The move, which begins this weekend and which has been long called for by Health Minister James Reilly and his predecessor Mary Harney, as well as patient groups, has been implemented after pressure from the troika.

Under the initiative, the HSE will reimburse drug companies the same amount for branded medications as they do for their generic equivalents. The approach is possible due to a newly imposed reference pricing process, which will enforce an across-the-board price for interchangeable medicines.

While the Department of Health said the move will save the State and private patients substantial sums, it is also likely to damage pharmaceutical company finances.

The first medication to be affected is Atorvastatin, a cholesterol drug which will now be purchased at 70% less than previously.

The new price system will be overseen by the Irish Medicines Board. The policy change was announced as senior troika officials told Government TDs Ireland cannot continue to justify the amount of money the health service spends on drugs.

As reported by the Irish Examiner yesterday, Istvan Szekely, European Commission director of economic and financial affairs, told coalition members on Thursday that the situation is not sustainable.

In 2011, the HSE spent €1.9bn on drugs — 13% of the system’s expenditure that year.


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