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Progress looms on driving down drugs prices but prescription fees are unacceptable

Posted in Blog by saraburke on June 21, 2010

On 16 June, when Fine Gael were battling out their leadership,  Minister Mary Harney announced new legislation which will deliver savings for individuals and the public purse on drugs prices. The plan is that from early next year (2011), legislation will be passed which allows for greater generic substitution and reference pricing – it’s not as complicated as it sounds. Plus Harney confirmed the introduction of her misinformed prescription charges.

Ireland has a very poor track record on generic prescribing – less than 20%  of all drugs prescribed here are generic where as in the UK, its 80% – so what’s going to change from this announcement? Currently, Irish pharmacists must dispense the drug named on the prescription which is usually a branded drug as Irish doctors tend to prescribe branded drugs. From next year pharmacists will be able to substitute a generic drug which should be cheaper for the patient and the State.

And reference pricing means that government will negotiate a price with manufacturers at the lowest price for drugs that are interchangeable and will only pay that lowest price – so its better value for money. So the net effect should be cheaper drugs for citizens and for the State from next year.

Everyone will have choice and if you want the branded or more expensive drug then you can pay the difference. Also in some instances eg epilepsy its important that the exact drugs are taken so these won’t be included. A government appointed group will assess and recommend which drugs are interchangeable and which generics to use.

They estimate €78 million will be saved annually –but that’s just from the medical cards and drug reimbursement scheme and does not count private out-of-pocket payments that the majority pay – so there should be significant savings evident to people next year.

So why are drugs so expensive in Ireland compared to most other countries? The simple answer is that we have not had a competitive market for drugs in Ireland. But in the last 18 months, government has introduced a range of measures which makes the market more competitive – this was evident last year in the stand off with pharmacies where substantial savings were made in terms of fees paid to pharmacies for dispensing drugs, also the government negotiated with pharmaceutical companies and manufacturers in 2006 and again earlier this year for reduced prices of off patent drugs by 35%: between these measures – €250 million will be saved this year.

Up to last year, there was no ‘competitive market’ in any aspect of the drugs market in Ireland so drug companies, manufacturers, wholesalers and distributors could charge what they liked. Pharmacists had a very good deal in terms of dispensing and doctors could prescribe what they want. And what we have seen in the last year and half is a series of measures which make each of these aspects more competitive – last weeks announcement was another piece of the jigsaw, which in time should drive prices down.

So why is it only happening now? I asked the minister this and she said ‘we are doing it now and that’s what’s important’ but gave no real explanation even when pushed to on this. However I think it is a combination of factors – the most important factor is that there are more expensive drugs and more drugs in each prescription

My analysis on this is that up to now there has been a pretty cosy relationship between government and big pharma and between doctors and pharmaceutical companies and its only now that when budgets are more constrained that action is being taken in the interest of the public and the public purse. But the question remains why on earth were we not making the €100s of millions in savings over the last ten years?

Finally, the Minister announced at the same press conference that the legislation on prescription charges would go to government this week. The introduction of 50 cent prescription charge for medical card holders and those on long term illness scheme was first announced in the last budget. The evidence is conclusive against such charges and shows that even small charges put people (who need them most) off taking medicines especially those on low income, those with chronic diseases, older people.

Minister Harney disagrees with the WHO, the EU, BMJ and Cochrane Collaboration and said  that the evidence is not unanimous and said she thinks ‘a small prescription charge is appropriate’, ‘there will be some exemptions’ (but would not tell me what the exemptions are), ‘that 50 cent is not a barrier’, ‘that other countries like New Zealand have such a charge’, and that government are behind the measure.

Interestingly even in New Zealand, there are significant exemptions which include under 6, and those on low income… so it’ll be interesting to see who is exempt for these new charges… More on this anon.

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