785m euro savings on state's annual drugs bills after Government deal with firms

Big pharmaceutical firms have done a deal with the Government which will save 785 million euro on the state’s annual drugs bills.
The four-year agreement with 38 companies will set prices at an average of 14 European countries saving about 200 million euro a year.


Last year the state spent about 1.7 billion euro on high value drugs and medicines from big pharma.
Dr Leisha Daly, president of the Irish Pharmaceutical Healthcare Association (IPHA) who was involved in the negotiations, said the deal was the largest single savings package for drugs the state has ever secured.
“It is essential that patients have early access to life-saving and life-enhancing new medicines. This agreement is the best way to make that happen,” she said.
“It offers a clear process and sustainable pricing so that new medicines can be made available quickly to patients in Ireland.
“With this agreement in place, patients and their doctors can rightly expect that priority will be given to funding innovative, new medicines in the health services.”
The deal involves 38 pharmaceutical firms.
Prices of medicines will be based on the average cost of the same drugs in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the UK.
“It will also bring the cost of medicines in Ireland more into line with other European countries,” he said.
The new pricing arrangements come into force on August 1.
“The Government wants to ensure that Irish patients continue to have access to new and innovative medicines and that Ireland remains at the forefront of its European peers in terms of early access to medicines in an affordable manner and within available resources,” Mr Harris said.
As part of the deal, drugs’ prices in the 14 countries will be checked every year and reduce in line with other states.
The state spends about 2.4 billion euro a year on drugs.
The deal is not expected to have any bearing on the price consumers pay in pharmacies and over the counter for medicines.
As part of the four year package, prices for drugs on which a patent has expired will drop to half the original price at the factory gate, and the price for biologics will fall by 80% when they come off patent.
A new hospital rebate has been added, initially 5.25% and increasing to 5.5% from August 1 2018, along with a rebate for community drug reimbursement schemes also to be increased to the same level.
Manufacturers will be obliged to contact the state’s health chiefs if they foresee shortages in supplies and give 12 months notice if they plan to discontinue making a medicine.
They have also been asked to ensure drugs have a shelf life of at least 12 months.