HSE expected to save over €750 million from new deal with pharma companies

Irish pharma reform group slams four-year drugs agreement as “big promise but bad deal”

A new government agreement with the Irish Pharmaceutical Healthcare Association (IPHA) is expected to save the HSE over €750 million on drugs over the next four years.

The deal will reduce the price paid for medicines from August 1st, bringing costs more into line with other European countries.

Minister for Health Simon Harris TD said the framework will provide better access to new and existing drugs.

“The HSE will be in a much stronger position to meet the increasing demand for existing medicines and also to invest in new medicines over the next four years,” he said.

The arrangement has been criticised by some of Ireland's biggest drug suppliers, however, with one lobby group branding it a "bad deal".

As part of the agreement, Irish prices will be set annually as an average of 14 countries, with Sweden, Portugal, Luxembourg, Greece and Italy joining the current nine being used as benchmarks.

The inclusion of a number of lower-priced reference countries is likely to lead to significantly lower costs for the HSE.

Mr Harris said a higher rebate of 5.25% from June 2016 will further reduce overall expenditure over the coming years.

The cost of existing patent-expired medicines will also be cut to 50% of the original price, he added. 

The IPHA said the deal, which has signed by 38 international pharmaceutical companies, will see total savings of €785 million for the state. 

Dr Leisha Daly, its president, said: “It is essential that patients have early access to life-saving and lifeenhancing new medicines. 

"This agreement is the best way to make that happen. It offers a clear process and sustainable pricing so that new medicines can be made available quickly to patients in Ireland."

'Bad deal'

However, an Irish pharma reform group described the agreement as a “big promise but a bad deal”.

The Healthcare Enterprise Alliance (HEA), which includes some of Ireland's biggest medicine suppliers, said the arrangement will block competition and prevent new, better value drugs from entering the Irish market.

Its president, Sandra Gannon, said: "Competition and innovation are the biggest drivers in delivering better value medicines to patients.

“We have seen in recent years what can be achieved by bringing a reforming ethos to medicine prescription, dispensation and pricing. This agreement halts that momentum.

“The inclusion of an artificial pricing clause that blocks better value biosimilar medicines entering the market is profoundly disappointing.

"It leaves Ireland alone in Europe and indeed one of the only countries in the world preventing competition in this part of the medicines market.”

'Penalises pharmacists'

The representative body for community pharmacists has also expressed concern about the agreement’s short lead-in time.

Eoghan Hanly, chair of the Irish Pharmacy Union (IPU)’s contractors’ committee, said the timeframe for its introduction will result in financial losses for pharmacists with existing stocks.

“Medicines, which pharmacists stock on their shelves for patients on behalf of the HSE, will now be paid for by the HSE at the new lower rates, despite having been purchased by pharmacists at the higher prices which were previously agreed between the HSE and the drug companies,” he said.

“This is an intolerable situation, which further penalises pharmacists, who have already suffered successive rounds of pay reductions under the FEMPI legislation.”

The agreement can be read in full here