The cost of drugs - HSE drugs bill hike not sustainable

THE huge increase in the HSE’s drug bill — jumping from €332 million in 1997 to €1.6 billion last year — is staggering and unsustainable.

It is therefore refreshing to hear Professor Brendan Drumm, the HSE chief executive, announce that new drugs will have to be cost effective before they are prescribed.

He also announced yesterday that the HSE is to greatly reduce the amount it pays to drug wholesalers after years paying over the odds for medicines.

Under a deal to take effect from January, the 17.66% mark-up paid to wholesalers will be cut to 8% with a further reduction to 7% a year later. This will save the organisation €100m in 2008 alone.

At 17.66%, the mark-up is more than twice the European Union average.

The main beneficiaries have been the three wholesalers who control 90% of the market — United Drug, Cahill May Roberts and Uniphar.

That the wholesalers should so milk the system is indicative of an attitude far too widespread in Ireland ... it’s Government money so let’s get as much as we can. The wholesalers may not enjoy the criticism but they can take comfort in the fact that they are not alone.

Inevitably the Irish Pharmaceutical Union, which represents 1,600 pharmacists, reacted with “outrage and anger” and claimed the deal could lead to many of its members going out of business.

If they depend on a mark-up of more than twice the EU average they need to look at other elements of their businesses before criticising Prof Drumm for looking for value for money for the taxpayer.

If Prof Drumm is to be congratulated on two fronts — getting a better deal on drugs and assessing the cost effectiveness of drugs before prescribing — he is to be supported on another.

Those who would try to undermine him because he got a bonus of €80,000 last year should wake up and join the real world. If he was working for a private company and realised savings of €100m in a year he could realistically expect a bonus nearer €8m.