Health (Pricing and Supply of Medical Goods) Bill 2012

I also welcome the opportunity to speak on this legislation. It could hardly be more crucial and discussion on it could not be more timely as we approach a budget with a health bill that takes up 27% of all Government expenditure, costing a massive €13 billion, with medicines now comprising almost €2 billion. It must be a major element of any cost-containment exercise. It is vital that we contain costs because we need to maintain access to vital medicines.

I very much welcome the conclusion this week of an agreement with the Irish Pharmaceutical Healthcare Association. While it took considerable effort the savings for next year are projected to be €116 million. I seek more information on the deal. Is it a once-off three-year arrangement? Will our medicines continue to be priced by reference to a basket of European medicines as we did in the past or is a new formula being found? I take the opportunity to congratulate the Minister of State and wish him well in his difficult job.

I am sure he is already finding out how arcane the system and procedure for setting the prices of medicines is, given that it is influenced by so many factors and interests. These include factors as diverse as wholesaler stocks at any time of the year and significantly – something mentioned by others – the presence in Ireland of so many drug manufacturers’ research and development, and manufacturing facilities.
There has been a perception that there is a tension between the State’s role in incentivising inward investment and high-end employment in pharmaceuticals, and the State’s role as a purchaser of medicines from those companies. However, given the proportion of the market that Ireland represents, I believe that is a bit of a red herring. I cannot see how the price we pay would influence their decision to invest in Ireland. They invest in Ireland for a variety of reasons but I do not believe any of them relate to the size of the market here.

Whatever the reason, the general perception of the international price-referencing system is that we seem to do very badly out of it. There is anecdotal evidence and I listened to a report on the radio yesterday. Regardless of where one goes in Europe, it always seems we are charged more than those abroad. We need considerably more transparency in how prices are decided. I heard the spokesperson for the Irish Pharmaceutical Healthcare Association state that some are dearer and some are cheaper, but that does not reflect our experience.
In the past ten years the drugs bill has quadrupled from €570 million to €2 billion now and average prices have doubled. The most interesting and inexplicable figure is the growth in the volume of prescriptions which seems to have more than doubled in the past ten years from 20 million items per annum to 44 million items per annum. Some of it relates to population, which increased but it did not double. While the population is getting older, it is not that much older and we have a relatively young population. I would like to see some analysis of this apparently inexorable trend. It cannot be that we are sicker than we used to be. It is possible that we think we are sicker or that we think there is a pill for everything. Coming from either patients or the drug companies’ sales representatives there seems to be pressure on doctors to prescribe. Whatever the reason is, we need to identify the underlying factor.

Last year, the Government introduced a 50 cent charge on each GMS prescription item dispensed, up to a maximum of €10 in any one year. What has been the impact of that charge? Has it resulted in a reduction in the number of medicines dispensed? Is there a need to look at this again? People who obtain medicine free will not be conscious of cost containment whereas people who are paying for medicine will not buy anything that is not essential. I do not believe the €10 maximum in any one year will be a constraint. Perhaps we need to look at how this charge is applied. One could buy 20 medicines over a year for €10, which is not that much. People with minor illnesses would buy at least 20 medicinal items a year. Perhaps we should provide that the charge comes into play after the first 20 items purchased. Issues such as what is motivating the increase in prescriptions need to be examined and could be addressed by the task force which is being established under this legislation.

I read in a newspaper during the week that the Medical Council has clarified the ethics code for doctors’ interaction with drug companies around the acceptance of trips abroad to medical conferences and so on. One of the issues on which clarification was provided was the acceptability of doctors charging a fee to drug sales representatives for a visit to their surgery, which knocked me back a little. I mention this only because it highlights the complexity of the relationships and the potential for undue influence that exists between all of the players, be it drug manufacturers, distributors, doctors, wholesalers, hospitals, the Irish Medicines Board and the pharmacists. I include the Irish Medicines Board because it is the gate keeper for medicines. It is the body which decides what is made available to us and how we get it.

A point often heard anecdotally is that one has to visit one’s doctor here in order to get a prescription for many of the medicines available over the counter in other countries, although in pharmacies rather than supermarkets. This turns the doctor into the gate keeper, which must push up the cost of medicines in Ireland relative to other countries. While obviously people who have medical cards do not have to pay the doctor, this costs the State more. I understand that the main task of the Irish Medicines Board is to ensure safety of medicines. However, some type of balance must be struck. In this regard, there must be reference to what is happening in other countries. Also, pharmacists attend school and college for as long as doctors. We must have more faith in our pharmacists and give them the same responsibilities as given to pharmacists in other countries. If pharmacists do not know as much about medicine as doctors, what do they know? This issue also needs to be addressed.

The complex supply chain relationship needs to be analysed in terms of negotiation, monitoring and determination of the cost of medicines. It is a total minefield, one which is constantly changing. It is a little like politics in that one never knows where the mines will be. The Minister of the day will need to be ever vigilant of the factors influencing prices, practices and procedures. We have in recent times seen many changes in the mark-ups available to wholesalers and retailer-pharmacists, which are to be welcomed. Last week, agreement was reached with the Irish Pharmaceutical Health Care Association on new on-patent drugs. Today, we are debating the introduction of generic substitution and reference pricing. This step is a major departure in this country, which I welcome. One or other, or both, are in use in other developed countries.

Provided we put in safeguards this new arrangement has enormous potential to save the consumer and the State a lot of money. This arrangement will, however, need to be carefully monitored. My concern around price referencing is that a floor price will be introduced. One needs to be careful when attempting to control prices. Every manufacturer will want to be producing the drug of choice. While manufacturers should be competing, they will only compete to the floor price. As such, the Minister of the day will have to be vigilant to ensure that floor does not act as a barrier to prices falling.The danger of this happening will be there at all times.

Putting the reimbursement list on a statutory basis is new. I want to comment specifically on new medicines getting on the list, which is a major challenge. While we all want access to the latest medicine a balance must be struck, by reference to clear criteria, between efficiency and cost. Choices have to be made in any country, in good and in bad times. This is what must happen all the time as new medicines become available. The decision in terms of medicines is a life and death one, one which I would not like to have to make. It is an important decision which must be made by the Irish Medicines Board.

While there is in place a mechanism of appeal by the professionals, from the manufacturer to the dispenser, in respect of all decisions made by the Irish Medicines Board or Health Service Executive, there is no mechanism in place for the patient. I do not believe that access to medicines should be decided by virtue of access to the media. There is a need to put in place a system that works quickly for patients. Patients who, in terms of their condition, believe a particular medicine is for them at least deserve to have their concerns dealt with in a prompt manner and through an established mechanism rather than the media.

Also on the reimbursement price list, currently a price is put on every product on the list that will be reimbursed by the HSE. This could also be a minefield. There is nothing in the legislation to suggest that the reimbursement must or will be the same as that charged by the pharmacist. As such, it could be the case that this legislation will not only permit but facilitate an entirely new system whereby patients could end up paying the difference between the real price and the reimbursement price. This is inherent in the new reference price system for interchangeable medicines, in respect of which the patient at least has a choice in terms of use. I am flagging that this legislation could be used – I am not suggesting it will be used now – in the future to usher in a regime whereby only partial payment is made by the State for medicines. It may be that that is what will have to be done. However, I would like to think this will not happen by stealth and that it is something that would be openly flagged. Everybody, be it a medical card patient or a person dependant on the drug refund scheme, needs some element of certainty around the cost of medicines and health generally.

I would welcome if the Minister of State, Deputy White, could respond to some of my questions and concerns. I welcome this legislation, which has huge potential to save money for all of us and to ensure that people continue to have access to vital medicines.