Biopharma Industry’s Latest Price Drops Save €15m on Government’s Medicines Bill, says IPHA
- Agreement with Government delivers more savings than forecast – but approvals process for medicines remains slow and inefficient
- Price reductions take effect for 750 packs of innovative medicines
- 61% of products now under €20 per pack, with just 11% priced over €100 per pack
- Industry urges partnership with Government to improve access pathways for innovative medicines
Ireland’s research-based pharmaceutical industry is set to save the Government €15 million on medicines by introducing price reductions today [Sunday] for more than 750 packs of innovative medicines.
Under the Framework Agreement on the Supply and Pricing of Medicines, agreed between the Government and the Irish Pharmaceutical Healthcare Association (IPHA) in 2016, prices are reduced annually to ensure they are in line with 14 EU reference countries*. These price drops, known as ‘realignments’, are in addition to significant cash rebates and price reductions prompted by the expiration of medicines’ patent protections. The cash rebates to the Health Service Executive (HSE) from suppliers are increasing from 5.25% to 5.5%. By the end of 2020 when the Agreement expires, €785 million in overall savings are expected to have been delivered.
As the new price reductions take effect, an analysis of all products on the HSE’s Primary Care Reimbursement Service (PCRS) shows that medicines prices are already low. Over 4,000 products, or 61%, are under €20 per pack. Just 698 products, or 11%, are priced over €100 per pack.
“These latest figures show that the biopharma industry is delivering significant savings on innovative medicines for the Government,” said Oliver O’Connor, Chief Executive of IPHA. “Securing timely access to medicines for patients at reasonable prices, in particular innovative medicines offering enhanced health outcomes, should be a key priority for Ireland. It is vital that we free up resources for continued investment in new and innovative medicines for patients. This will ensure Ireland remains at the forefront of our European peers in terms of early access to these new medicines. This is a goal shared by both industry and Government. But, our slow and inefficient medicines approvals process means that we are among the slowest in western Europe when it comes to the availability of new medicines. Working in partnership with Government to improve the approvals process is among IPHA’s key priorities,” he added.
According to the Government, Ireland’s medicines bill has been “relatively stable” at around €1.7 billion annually for the past five years. This is despite ageing demographics and the arrival of innovative new medicines. A review of the PCRS spend on medicines from 2006 to 2015 shows a compounded annual growth rate of just 1.39%. In the same period, the volume of medicines jumped by 32% – from 55 million items to more than 72 million items. That means more Irish patients were treated with improved medicines, with spending staying relatively flat while volumes increased.
“With prices limited to the average of 14 European countries under the Agreement, patients in Ireland should not have to wait longer than patients in comparable European countries for new medicines. IPHA members are delivering the promised savings under the Agreement. But only a shift in Government policy can place Ireland at the forefront of European peers in terms of early access to innovative medicines.
“Improved processes, collaborative engagement with industry, and reasonable, sustained increases in Exchequer funding will deliver better outcomes for patients. These should be goals shared by both Government and industry. The Minister for Health, Simon Harris, and the Taoiseach, Leo Varadkar, have acknowledged that access pathways for new medicines need to be improved. The Government has promised dialogue to improve the approvals system and the industry looks forward to engaging constructively as quickly as possible,” said Mr O’Connor
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