Update: Prescription Costs, 5th August 2015

QUESTION NO:  240

DÁIL QUESTION  addressed to the Minister of State at the Department of Health (Kathleen Lynch)
by Deputy Bernard J. Durkan
for WRITTEN ANSWER  on 09/07/2015    

 
  *  To ask the Minister for Health the extent to which prescription costs have fallen or have stabilised; and if he will make a statement on the matter.

                                                                                         Bernard J. Durkan T.D.

 
REPLY.
Between 2009 and 2014, the HSE’s expenditure on reimbursed medicines has remained stable at under €2 billion.

Aggregate spending on the General Medical Services (GMS) Scheme, the Drugs Payment Scheme (DPS) and the Long Term Illness (LTI) Scheme has reduced since 2009, despite an increase in numbers eligible for the scheme and the introduction of more expensive new medicines. The average price of an item dispensed on the GMS scheme has reduced to below the price paid in 2002, while the average item price dispensed under the DPS and LTI schemes is now below the price paid in 2000.

However, expenditure on high tech medicines increased from €315 million to €485 million between 2009 and 2014.  This increase is due to the introduction of highly expensive new medicines and the increased use of existing medicines.

The reductions achieved to date are due to a sustained and ongoing programme of price reductions which includes the implementation of price reduction Agreements with the Irish Pharmaceutical Healthcare Association and the Association of Pharmaceutical Manufacturers in Ireland.  Cumulative savings and cost avoidance generated from these Agreements between 2006 and 2014 amount to approximately €1.5 billion.

The introduction of generic substitution and reference pricing, as provided for by the Health (Pricing and Supply of Medical Goods) Act 2013, has also contributed to the reductions in the cost of medicines.  The prices of reference priced products are generally of the order of 70-80% lower than the prices paid when medicines were on patent.  On the date of introduction of the 2013 Act, the HSE was reimbursing in excess of €22 million per month on medicines reference priced in 2014.  By December 2014, this had reduced to €10.3 million due to the combination of reference pricing, increases in generic utilisation and generic price reductions prior to reference prices.  Reference pricing has delivered savings of over €47 million in 2014 and is expected to generate a further €25 million in savings in 2015.