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Minister Reilly announces 'landmark' €400 million drug deal

The Health Minister congratulated all parties involved in the intense negotiations.

Image: Graham Hughes/The Canadian Press/Press Association Images

HEALTH MINISTER JAMES Reilly has described the new deal reached with drug providers as a landmark agreement.

Intensive negotiations have been ongoing for months between the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health with the Government hoping to shave a considerable amount off its €2 billion-a-year drugs bill.

Reilly claims the new deal will save the State more than €400 million over the next three years, representing “an important step in reducing the cost base of the health system”.

It is understood that €16 million in savings will be achieved this year and it is hoped a reduction of €100 million will be seen in 2013.

About half the financial value is related to reductions in the cost of patent and off-patent medicines. The other 50 per cent relates to the State securing the provision of new and innovative drugs for the duration of the agreement.

The price of medicines marketed by IPHA companies, including Bayer, GSK, MSD and Pfizer, and which come off patent before 1 November 2012 will be reduced to 50 per cent of their original price by 1 November 2013.

The price of up to 400 patent-protected products which have been available on the HSE Community Drugs Scheme since before 2006 will also be subject to price reviews with expectations of 16 per cent average savings.

Reilly said “given the scale of the financial challenges in health over the next few years, this agreement is vital progress after much hard work”.

IPHA said the deal provides assuarance to Irish patients that they will be able to get new medicines when they become available.

Outgoing president David Gallagher said the level of savings delivered since 2006 (€600 million) has impacted on the Irish operations of pharmaceutical companies, adding that the reductions agreed today “will undoubtedly have further impact”.

Commercial affairs director Orlaith Brennan added, “We understand the enormous fiscal challenges facing the country, but it is important to ensure that patient needs and expectations can continue to be met.”

The deal comes as the Oireachtas works on legislation on generic drugs which will introduce a system of reference pricing and generic substitution. That Bill is expected by the end of December. Discussions are ongoing with the Association of Pharmaceutical Manufacturers in Ireland, which represents the generic drugs industry.

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