IPHA Statement on the report on a Proposed Model for Reference Pricing and Generic Substitution

The Irish Pharmaceutical Healthcare Association (IPHA) notes the publication of the report on a proposed model for Reference Pricing and Generic Substitution and looks forward to further discussions with the Department of Health and Children (DoHC) on the matter.

Commenting on the report Mr Brian Murphy, IPHA Director of Commercial Affairs, stated: “Ireland currently has a fair and equitable single tier system, whereby all patients, regardless of income, have access to a secure supply of the medicines which their doctors believe are most suitable for them. This has been achieved through the delivery of successive supply agreements between the IPHA, the DoHC and the HSE which have provided significant value for the taxpayer, as well as ensuring continuity of supply. This current system is providing, and can continue to do so in future, real and meaningful savings as acknowledged in the report, far and above those which might accrue from the introduction of a reference pricing system.”

The report recommends that the HSE should set the reference price at that offered by the lowest potential supplier. This could give rise to patients being dependent on one supplier, perhaps with very limited infrastructure or commitment to the Irish market for the delivery of their medicines 365 days a year. Security of supply of the full range of therapies to patients is absolutely vital and such a policy of going for the lowest price supplier rather than an average of a number of prices could seriously endanger this vital continuity of supply to patients.

The proposed resetting of reference prices up to four times a year could see patients being regularly switched from one medicine, which they are doing well on, to another product. This could result in an increase in the already high level of non-compliance by patients with their medication, leading to poorer health outcomes.

The report contends that the system it is proposing would result in savings which would “vastly exceed” the upfront and ongoing costs of the implementation of a system of interchangeable medicines and reference pricing. It provides no evidence to back up this contention but rather it outlines the very many costs involved in its development, including:

  • The establishment of a Committee on Interchangeable Medicines with a secretariat of 5 whole time equivalents;
  • ICT developments at an undefined cost at a HSE level and also at GP and pharmacy level;
  • A communications campaign at an estimated cost of €500,000.

“It would appear that what is being proposed is a great deal of additional cost for the taxpayer without any guarantee of savings. Rather than going down this path the State could build on the current system for off-patent medicines and garner additional savings by addressing the currently bizarre situation whereby generic medicines are up to 50% more expensive than their off-patent equivalents” added Mr Murphy.

The proposed introduction of generic substitution as outlined in the report would remove the distinction between prescribing and dispensing which has served doctors, pharmacists and patients well. Currently doctors are free to exercise their own professional judgement as to what is the appropriate treatment for their individual patients. Generic substitution would fundamentally undermine this important freedom, thereby altering the doctor-patient relationship and possibly, also reducing the quality of life of Irish patients. The financial benefits for the State of such a step are also questionable and there would be significant downsides in terms of the potential reduction in patient adherence to their medication. The position in Austria and Belgium, where substitution is prohibited, demonstrates that there is no need for a reference pricing system to be accompanied by substitution.

Notes to the Editor


The IPHA represents the international research-based pharmaceutical industry in Ireland. Its members include both manufacturers of prescription medicines and non-prescription or consumer healthcare medicines. Today people in Ireland live longer, healthier and more active lives, in part, due to medical progress and pharmaceutical research and development. Not only is the pharmaceutical industry critical to the health of the nation, it plays a critical and substantial role in the Irish economy. Ireland’s pharmaceutical sector currently generates over 50 percent of the country’s exports which contributes to making Ireland the second largest net exporter of medicines in the world. The industry makes an annual taxation payment to the State of some €3 billion and directly employs over 24,500 people, over half of which are third level graduates. Over €7 billion has been invested by the pharmaceutical sector in Ireland over the last ten years and according to IDA Ireland the replacement value of the investment by the pharmaceutical sector in the Irish economy is over €40 billion.

For more information contact

Ronan Collins
Communications Manager
(087) 99 19 107
(01) 66 309 36


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