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HSE to cut what it pays drug companies after talks fail

The state entered into negotiations to reduce the price of medicines to the Irish taxpayer.

Image: Shutterstock/Marian Weyo

THE HEALTH SERVICE Executive are moving to cut the amount it pays out on drugs after lengthy negotiations with pharmaceutical companies failed to make adequate savings.

The price of medicines in Ireland has come under scrutiny over the last number of years, with a number of groups such as the ESRI, Fiscal Council, European Commission and the Joint Committee on Health and Children all raising concerns about the escalating costs.

A Department of Health spokesman said the state entered into negotiations in March in an attempt to reduce the price of medicines to the Irish taxpayer.

It wanted to bring the cost in line with a more affordable level, which would put the HSE in a position to invest in new and innovative medicines over the next four years.

However, the newly Minister for Health Simon Harris and the Minister for Public Expenditure and Reform, Paschal Donohoe, told their Cabinet colleagues today that an agreement could not be reached.

It is now expected that the HSE will determine the reimbursement prices paid for medicines, using its powers under the Health (Pricing and Supply of Medical Goods) Act 2013.

The Act gives the HSE the power to set reimbursement prices for drugs where negotiations with the sector don’t result in adequate savings for the Irish taxpayer.

“While progress has been made in reducing the cost of medicines in recent years, the price paid for medicines in Ireland remain at the high end of the European spectrum,” said the department’s spokesman.

Sources state that drug prices are set to rise by around €100 million per year and that it is the responsibility of the HSE to try to contain prices.

Medicine accounts for a huge part of the health budget, with approximately €1.7 billion being spent by the government on drugs in 2015.

Another source said it was hoped the initiative could lead to further negotiations with the drug companies with the aim of striking a deal on lower prices.

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