Cost of medicines - Still waiting for a deal on drug costs

As anyone struggling to maintain private health insurance will know, medical inflation outstrips general inflation by spectacular multiples.

As anyone dependent on State services to provide their health needs knows, a new reality exists and expectations and service levels have been modified — and, despite reforms, not always for the better. Because the HSE pays for drugs for more than two million people the cost of medicines has a profound bearing on what can be achieved with reduced health budgets and what the State needs to set aside to sustain these schemes.

This loaves-and-fishes challenge is exacerbated by the fact that the HSE was, in some cases, paying up to 24 times more than Britain’s National Health Service (NHS) for generic medicines. This situation, as was seen recently, is made even more challenging when new and very expensive drugs become available for specific conditions — cystic fibrosis in the latest instance — as there is an expectation that the State will provide them irrespective of cost or equally pressing demands on a stretched health budget.

Not only are there international price discrepancies but there are regional variations in drug prices as well. The inconsistencies do not end there, however, as prices paid by the HSE for drugs and the prices paid by private individuals can differ spectacularly.

This last variation is especially important, as a consumer report published yesterday shows that some pharmacies can charge up to three times what some of their competitors charge for prescription drugs.

The National Consumer Agency found average prices for drugs across the country differed by 56%. In Dublin the average price differential was 34%, in Galway it was 30%, in Cork and Limerick it was 29%, and in Waterford it was 27%.

At a moment when we are facing national and private budget challenges we never anticipated these variations could have a significant impact on an individual’s or a family’s solvency.

Last August, responding to a Sunday Business Post (SBP) survey of generic drug prices, Health Minister Dr James Reilly promised to intervene and bridge the gap between what Irish people pay and what people in Britain pay for generic medicines. That survey found the HSE was paying up to 12 times more than Britain’s NHS for a bundle of generic medicines. No one will be really surprised but rather saddened that an SBP survey in recent weeks found that price differentials between the Ireland and Britain have increased since Dr Reilly made his no-more declaration in August.

It has to be accepted that this is a complex issue with many layers and obligations, but it does seem that drug providers, retailers or manufacturers, have grown used to unsustainable arrangements. Despite the barely concealed threats by some drug companies to move operations from Ireland if pricing issues were addressed to benefit the State or individuals, Dr Reilly and his cabinet colleagues must do much more to swing the balance in favour of taxpayers and consumers on this issue. That it has not raises all sorts of doubts and undermines yet again the hope that this Government has the capacity to deliver on the promises that got it elected.