Cantillon: State still seeking the right medicine to cure overweight drugs’ budget

Ongoing efforts to deliver meaningful savings from the State's drugs bill are delivering results – though there is some way yet to go.

A report out this morning says that market share of generic drugs has expanded rapidly – doubling between 2010 and 2012 to a point where generics now account for 50 per cent of all prescribed drugs on the GMS scheme, the main avenue of State funding for prescription medicines.

This might be better news but for the fact that the price of generic drugs in Ireland remains higher than in other EU member states.

The report was carried out at the behest of the troika. It was concerned about figures showing that pharmaceutical prices in Ireland were too high, that the use of generics was too low, and that prescribing practices could be improved.

Prescribers, doctors, still tend to select the most expensive pharmaceutical product in situations where they have a choice for treatments in the same therapeutic subgroup – at least in the three areas examined by the report. This is at odds with the experience in the UK where the tendency is to go for the least expensive option.

And it also suggests that more could be done to increase transparency – both in how drugs are deemed to be value for money in the first place and also in encouraging dispensing pharmacists to post price lists so that customers can be better informed of the options.

On the plus side, drugs which have come off patent and now face generic competition are less costly in Ireland than in other EU jurisdictions.

For all the progress the most telling point is that, on the subject of policy recommendations, the authors of the report, published by by the ESRI, state that preparing a detailed “to do” list is “superfluous”. They point instead to 23 recommendations in a separate report published last year which, they say, “are just as relevant today as they were 17 months ago”.

The message is clear. A Government still looking for cost savings can extract considerably more out of the pharmaceuticals sector, without being notably out of line with European practice.