Generic drug plan to save state €78m

PHARMACISTS will be allowed to substitute cheaper, generic drugs for prescribed branded medicines under laws to be introduced next year.

Health Minister Mary Harney said the new pricing system will cut the price of medical bills for patients and save the state almost €78 million a year.

The Consumers’ Association of Ireland said it was a long-awaited step forward.

Currently, pharmacists can only supply the brand of medicine prescribed by a doctor for a patient, even when a similar, less expensive medicine is available.

The Health Service Executive has already identified 100 potentially interchangeable medicines on which the state could specify the price it will pay for them.

Ms Harney said she expected to implement a new drugs payment system early next year.

In 2008, the HSE paid more than €1.9 billion for 65 million prescription items. By 2021, the number is expected to increase to 105m at a cost of €2.4bn.

It has been estimated €77.7m would have been saved that if the lowest cost generic drug was dispensed under the state’s drug payment schemes last year. Around €98m could have been saved from a 40% reduction in the price of off-patent products last year.

Ms Harney said there would be a tendering process with the lowest priced picked on the basis that the company could supply the product volume required. “That will be the reference price we will pay and we won’t pay any more.”

Currently, only 18% of generic drugs are dispensed under the General Medical Scheme and 11% under the Drugs Payment Scheme. This compares with 83% in Britain.

Ms Harney said this was part of a set of key actions being taken to achieve greater value for money in pharmaceutical spending.

“Off-patent price cuts have been introduced, wholesale and retail mark-ups have been reduced and further price cuts were achieved in February this year. These actions alone can be expected to save nearly a quarter of a billion euro for the taxpayer this year, from what would otherwise have been the cost.”

Mark Moran, who chaired the working group on reference pricing and generic substitution, said it was only now that measures were being taken to create a competitive drugs market.

The Irish Pharmacy Union, which represents 1,600 pharmacists, welcomed the move but urged the minister to take a cautious approach because it could lead to medicine shortages, as had happened with a cancer treatment and anti-depressant drug in Britain. The Irish Pharmaceutical Healthcare Association said security of supply of the full range of therapies was vital and a policy of going for the lowest price supplier rather than an average price could endanger continuity of supply to patients.