Good story in Indo on costs of drugs in Ireland

Posted in Blog by saraburke on July 12, 2009

See estimated over spend on drugs due to Irish government’s failure to negotiate lower prices on drugs. The HSE since 2005 have responsibility for negotiating this deal. The HSE claim they brought down costs with the 2006/7 deal by 35% on off patent drugs. However, critics including the IPU say that they failed to bring sufficient savings to the Irish public purse. Close links between big pharmaceutical companies and government must be a factor… 

Here’s the story which is lead in the Irish Independent on 14 July:

HSE blows millions on overpriced medicines

THE health service has been accused of squandering hundreds of millions of euro over the past decade by paying massively inflated prices for prescription drugs.

New industry figures seen by the Irish Independent reveal how manufacturers are being paid up to 18 times more for some generic drugs in Ireland than for the same products in the UK.

The figures indicate that up to €98m a year of taxpayers’ money could be saved on the medical card scheme alone if UK generic prices for some of the most popular medicines were being paid here.

The inflated costs — which stem from agreements between the HSE and the pharmaceutical industry — have been blamed on a number of factors.

These include the relatively small size of the Irish market and fears that drug companies could stop supplying certain vital products if forced to accept lower prices.

Industry figures show that the top 20 medicines prescribed under the medical card scheme cost the State almost €360m each year.

Nine of these brands have generic versions which are widely sold at a fraction of the original brand’s cost in the UK — despite being of equal quality.

However, in Ireland the same generics are only slightly cheaper than the branded versions.

Were these prices slashed to UK levels, between €89m and €98m could be saved on the medical card scheme each year, according to estimates.

Fine Gael health spokesman James Reilly, who obtained the figures, said urgent action was needed to close the price gap between Ireland and Britain for generic medicines.

“The question that has to be asked is how much money has been squandered paying inflated prices over the past decade? It is not millions, it is potentially billions,” he said.

“It is because of this waste that children’s operations are being cancelled in Crumlin, that we are failing to provide young girls with a vaccine for cervical cancer, and that we haven’t yet built a cystic fibrosis unit, cutting sufferers’ life expectancy by 10 years.”

The industry figures reveal how manufacturers in the UK charge the equivalent of just €1.11 for the generic ulcer drug Omeprazole. But the cost charged in Ireland is €20.

A similar generic prescription drug, Lansoprazole, is sold by manufacturers in the UK for €2.44, but costs €21 for the same quantity here.

Generic angina drug Amlodipine costs 49 cents from manufacturers in Britain, but is €8 here.


The Irish Pharmaceutical Healthcare Association (IPHA), which represents multinational pharmaceutical companies in Ireland, admitted there was a huge disparity in costs.

It claimed the small size of the Irish generic drugs market was a major factor as economies of scale made it easier to supply drugs more cheaply in large markets such as Britain.

Just 12pc of the Irish market is made up of generic drugs compared with 60pc in the UK.

The IPHA also said some companies would not find it commercially viable to operate here if the market was mainly made up of generic drugs.

An IPHA spokesman said: “Historically versus the UK, Ireland has always had higher prices. Some companies would consider withdrawing products if they were offered a lower price.

“In order to maintain the supply of a product, you have to pay a fair price.”

The spokesman added that Ireland had historically been “more pro-innovation” than other countries, leading to more of a reliance on patented drugs, which are more expensive.

Health Minister Mary Harney last month moved to reduce State expenditure on medicines by cutting payments to pharmacists, which will result in savings of €55m by the end of the year.

However, no significant move has yet been made to cut the amounts paid by pharmacists to manufacturers of generic drugs and later reimbursed by the HSE. Formal negotiations have yet to begin on new pricing levels to replace current agreements, which end in September next year.


However, a spokeswoman for Ms Harney said the Department of Health and the HSE were examining all options for containing pharmaceutical expenditure, including the introduction of a system of generic “reference pricing”, similar to what operates in the UK and Germany. Reference pricing is where a health service examines a list of drugs which have roughly the same health benefits and only agrees to pay for the least expensive option.

Patients who prefer to use more expensive brand-name drugs have to make up the difference themselves between the cost of the least expensive option and the brand they want.

The HSE would not say last night when negotiations with manufacturers would begin.

It said the current agreement had been reviewed by the National Centre of Pharmacoeconomics and the HSE was considering its strategy.

– Shane Phelan, Investigative Correspondent

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One Response

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  1. Rebecca said, on July 22, 2009 at 3:44 pm

    With regards to the comments made by IPHA it would be helpful if said lobby group would explain how multinational drug companies can afford to supply drugs to Denmark. Roughly the population size of Ireland, Denmark has a much, much higher generic penetration and very low prices as a result.

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