Supply and Reimbursement
The Irish Pharmaceutical Healthcare Association (IPHA) has worked for a long number of years with the State to ensure that in Ireland we have a single tier system of access to medicines, whereby all patients, regardless of income have access to the medicine which their doctor believes is best suited to their needs.
How medicines get to the patient
The medicine supply chain has 3 elements:
• The manufacturers, principally members of IPHA, who develop, manufacture and bring innovative medicines to the Irish market.
• The wholesalers who store and transport these medicines to hospitals and community pharmacies across the country.
• The community pharmacists who dispense the medicine to the patient.
How medicines are payed for
In Ireland, the State pays for approx. 80% of all medicines. The ultimate cost to the State of medicines dispensed in the community depends on which community medicine scheme the patient uses to access the medicines. There are 4 principal schemes which determine whether people get free or subsidized medicines:
• General Medical Services Scheme (GMS - medical cards): the patient receives their medicines after paying a €2.50 per item prescription charge (up to a maximum charge of €25.00 per family per month) and the pharmacist a dispensing fee but no mark up.
• Drug Payment Scheme (DPS): the patient pays a maximum of €144/month for medicines, the pharmacist receives both a mark-up and a dispensing fee.
• Long Term Illness Scheme (LTI): the patient receives medicines for specific conditions (e.g. diabetes, epilepsy) free of charge. As with the DPS the pharmacist receives a mark-up and a dispensing fee.
• Hi-Tech Scheme: the cost of these medicines is comprised of the ex-factory price, in line with the IPHA/HSE Agreement framework, a wholesale mark up of approx. 10% and a patient care fee paid of €62.03 paid to the pharmacist in the month when an item dispensed and €30.26 paid in months where no item is dispensed. Where the patient has a medical card or the medicine is for a specific condition covered by the LTI they do not pay anything, otherwise they pay the first €144 a month of the cost in accordance with the rules of the DPS.
The role of the pharmaceutical industry
The supply of medicines to the health services 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.
For many years, a structured and transparent process has overseen the supply of innovative medicines in Ireland. This has served the State and patients well.
The pharmaceutical industry has recognized that the State faces particularly tough challenges in funding healthcare and has agreed robust, cost effective arrangement for the supply of medicines to the health services. These arrangements have resulted in savings of €800 million in the State medicines bill since 2007, providing the State with monies to fund new therapies which offer hope to patients of longer, healthier and more active lives.
In October 2012, IPHA reached a new 3 year agreement with the Department of Health on the supply of medicines which will yield in excess of €400 million in savings to the State. This is extremely good news for the State, patients and taxpayers, as the price of hundreds of medicines will fall significantly. As well as offering substantial price reductions, the industry agreed a process to ensure that Irish patients will have timely access to new products over the period of the Agreement and will not be disadvantaged by current fiscal difficulties.
The main elements of the Agreement are:
• The Agreement will run for 3 years and will ensure that Irish patients have timely access to new products over this period and are not disadvantaged due to the current fiscal difficulties.
• On patent expiry, the price to the wholesaler of a medicine will be reduced to 70% of the original price. 12 months following this price reduction, the price to the wholesaler will be reduced to 50% of the original price.
• For existing patent expired medicines, the price to the wholesaler will be reduced to 60% of the original price on 1st Nov. 2012. This will be followed by a further reduction to 50% of the original price to the wholesaler 12 months later.
• A once off downward price realignment will apply to the currency-adjusted average price to the wholesaler in the nominated EU member states on patent medicines and off patent unique medicines.