HSE faces €70m deficit over drugs scheme overrun

Reimbursement: The Health Service Executive (HSE) is facing a projected financial deficit of around €70 million this year on its demand-led drug schemes.

The projected deficit is generally a result of overruns forecast in the drug payment scheme and the high-tech drug scheme.

Sources said the cost of demand-led drug schemes was difficult to estimate.

The schemes involve the State reimbursing the patient in full or in part for the cost of drugs and medicines under general eligibility rules set down by the Government.

Health service sources said it was difficult to give exact estimates in advance as to how many people will avail of the schemes each year.

Under the drug payment scheme, patients can reclaim expenditure on drugs and medicines in excess of €85 per month.

Under the high-tech medicine scheme, the State contributes to the cost of expensive drugs for certain conditions, generally prescribed initially by hospital consultants.

The HSE is in discussions with the Department of Health on the projected overrun in the demand-led drug schemes this year.

HSE sources also maintained that similar projected deficits had been forecast within the organisation last year but that ultimately it had managed to deal with the cost pressures.

The HSE board was told by management in a report in April that expenditure on demand-led schemes in 2005 was €72 million in excess of the available budget.

"In the past, such expenditure was funded by the Exchequer in the form of supplementary estimates.

"However, in recent years the system has been required to meet such costs from within its own resources. The 2005 costs were funded from savings within the primary, community and continuing care service and through the timing of other developments," the report states.

The management report says that this year the Exchequer provided an additional €50 million for the demand-led schemes - giving a total budget of €669 million.

However, it says this is not enough to cover the growth in demand experienced from 2005.

"As a consequence, demand-led schemes will be a significant cost pressure this year.

"Already at January and February run-rates, the schemes will be €55 million over budget," the report stated.

HSE management financial reports are generally based on figures a number of months in arrears.

It is understood that since the report was compiled that the latest projections estimate a deficit in the demand-led schemes of around €70 million.

The Irish Times reported last month that in January and February this year the National Hospitals Office of the HSE recorded a financial deficit of €51 million while the primary, community and continuing care section overran its budget by around €31 million.