State can slash millions off €1bn subsidised drugs bill

THE State could slash almost €10 million a year off the cost of subsidised prescription drugs by making simple changes in how it prices the medicines, research has revealed.

The Department of Health is currently tied to an agreement with the pharmaceutical manufacturers whereby the price of drugs used under the medical card scheme, the drugs payment scheme and the long-term illness scheme, is based on the average price of drugs in five EU countries.

However, research carried out by the Centre for Pharmacoeconomics at St James' Hospital in Dublin found that these countries Denmark, France, Germany, Holland and Britain with the exception of France, pay some of the highest prices in Europe for drugs, which is helping push the country's drugs bill towards a record high of e1 billion this year.

Clinical Director of the Centre for Pharmacoeconomics Dr Michael Barry said the price of medicines in Britain is the highest in Europe, which results in the prices in Ireland being above average.

The current agreement is due to expire on July 31, and Dr Barry is urging the Government to use the opportunity to renegotiate the terms of the contract with the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers of Ireland so the cost of drugs is based on an overall EU average.

The researchers calculated that if the new agreement linked the price of drugs to the average European price instead of just five countries, Ireland could potentially save over €9.4m a year on the medical card scheme (GMS) alone.

The average European price is set by assessing the cost of medicines in 13 countries: Belgium, Finland, France, the Netherlands, Ireland, Iceland, Italy, Liechtenstein, Norway, Britain, Sweden, Germany and Austria.

"Expenditure under the GMS drugs payment scheme and the long-term illness scheme was an estimated €830 million in 2002 and €950 million last year, and could increase to more than €1 billion in 2004," Dr Barry said in an article in Medicine Weekly.

Health Minister Micheál Martin indicated last month that value for money would be high on the agenda of any further negotiations on drug budgets.

"It is increasingly difficult to ensure a safe and reliable journey for medicines, from factory to the patient, at a reasonable and sustainable expense. The costs must be examined very closely to ensure that health spending returns real and tangible value for our citizens," Mr Martin said.

Talks between the Department of Health and the IPHA and the APMI are due to begin shortly.