Agreement on the Supply of Medicines to the Health Services

The supply of medicines to the health services (hospitals & Community drug schemes) by pharmaceutical companies has been governed by a series of agreements between the State and the IPHA, on behalf of the international research-based pharmaceutical industry.

These agreements through a number of innovative arrangements ensure that patients continue to have access to the most up to date and highest quality medicines when they need them.

€300 million in savings in the period 2006 - 2010

The latest agreement was implemented on the 1st September 2006 and contains elements which the HSE has estimated will result in savings of €300 million in the period through to September 2010. As well as providing this significant additional value for the Irish taxpayer, it also ensures that Irish patients continue to have access to new innovative treatments in a timely manner.

Under the Agreement, the price of new medicines coming onto the Irish market is set by reference to prices in nine other markets across Europe (Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Spain and the UK). These prices are reviewed every two years and adjusted to take account of pricing developments in these markets (the first such review took place in September 2008). The HSE has estimated that the price of new medicines will, as a result, be 10% less than would otherwise be the case.

In relation to many leading,long established, post patent medicines, the Agreement provides for price cuts of up to 35% over a 22 month period.

At a time of significant retrenchment for the pharmaceutical industry internationally and rising costs in Ireland, the industry accepted that it had to play its role in ensuring that value was provided and resources freed up so that the State could invest in the most advanced, innovative, cost effective medicines, ultimately helping Irish people live longer, healthier and more active lives.

€94 million extra savings in 2010 alone

In 2010, understanding the difficult state of the public finances as a result of the downturn in the economy and following a request from the Minister for Health and Children for immediate savings, the industry put in place further arrangements – a price cut of 40% on post patent medicines with a generic equivalent on the market – which will yield savings to the State of approximately €94 million in a full year. This saving is in addition to the savings of over €105 million to be generated, from the 2006 Agreement, in 2010. More information is available on www.checkthelist.ie. 

IPHA/HSE Agreement on the Supply of Medicines to the Health Services (0.11 MB, Adobe PDF)