HSE may force drug cost cut in absence of pharma deal

The Health Service Executive may impose drug price cuts in the absence of a deal with pharmaceutical companies.

The HSE is considering its options, including invoking its legislative powers, after the State and the Irish Pharmaceutical Healthcare Association (IPHA) failed to reach an agreement on price reductions.

“It did not prove possible in the negotiations to reach an agreement that would deliver on the State’s objectives,” a Department of Health spokesman said.

He said the IPHA’s final offer following talks that began in March was below that needed to cut the price of medicines significantly and allow the HSE to invest in new, innovative medicines over the next four years.

The HSE must now consider alternative options including invoking its powers under the Health (Pricing and Supply of Medical Goods) Act 2013.

The IPHA reacted with surprise and is seeking meetings with Mr Harris and Public Expenditure Minister Paschal Donoghue, to discuss “realistic proposals” for a new supply agreement.

“We have not ended these negotiations. We are surprised by correspondence and government briefings today,” said IPHA boss Oliver O’Connor yesterday.

The Department of Health spokesman said while progress had been made in recent years, the price paid for drugs in Ireland remained at the high end of the European spectrum. One government source said it would be irresponsible for the HSE not to try to contain prices.

However, the new administration hopes the threat of using legislation to force reimbursements will bring the industry back to talks.

The source added: “There are new drugs coming down the tracks, such as Orkambi [for cystic fibrosis] and so on, that patients will rightly be seeking. When you take wages and staff costs out, drugs are a huge part of the health budget. About €1.7bn was spent by the Government in 2015.”