Government to review method of buying medicines

Drug payment reform: The Government is considering major reforms to the way it pays for drugs and medicines, including proposals to reimburse only the cost of generic products where these are available.

It is also examining proposals that would allow it to seek an independent pharmo-economic assessment of any drug coming on the market before it is eligible for reimbursement under the medical card or the drug payment schemes. Such an assessment would involve an analysis of whether the drug did what the manufacturer claimed and whether it offered value for money.

Sources said this week that the Government believed that the amount being paid out on drugs and medicines under the general medical service schemes - around €1.1 billion this year - was unsustainable in the long term and that initiatives to control costs would have to be introduced.

According to sources, the Department of Health would seek to introduce reforms to tackle the increasing drugs bill as part of forthcoming negotiations with three key health service sectors - GPs, pharmacists and the pharmaceutical industry.

Top of the Government's list of priorities is securing an increase in the level of prescribing of cheaper generic equivalents to proprietary products that have gone off patent.

A final strategy had not yet been agreed on for the negotiations but moves were being considered that would see the State paying only for generic products, where available, under the medical card scheme and the drug payment scheme.

Such proposals were first put forward in the Brennan Commission report on the health services in 2003.

It is understood that doctors would still have the right to insist on a particular brand-name drug for patients if they so wished. However, sources said that doctors would be accountable for their actions and would have to give reasonable reasons.

Patients would be able to pay the difference themselves if they sought a proprietary drug rather than a generic.

Government sources said that the aim of the plan was not about saving money in itself but rather providing the resources to finance the cost of new cutting edge drugs and medication coming on-stream.

A move towards generic prescribing would be controversial but the Government will argue that generic products were pharmacologically identical to proprietary drugs.

Another option would be to reduce significantly the price paid for drugs once they came off patent - a mechanism used by other European countries.

The Government is also to press for reforms in its agreement with the pharmaceutical industry which is up for re-negotiation later in the year.

At present this agreement stipulates that all products with a licence in Ireland are eligible for reimbursement under the State drug schemes.

However, the Government could press for a clause in a new agreement which would set out a distinction between what was allowed to be used and what was paid for by the State.

Sources said that among the issues under consideration by the Department of Health for the talks with the pharmaceutical industry was the right to insist on a pharmo-economic assessment of new products.

It is understood that the Government would not seek to introduce a mandatory assessment of every product but just the right to seek such an analysis on a case-by-case basis.