SIGNIFICANT COST-SAVINGS for the State could be achieved by the introduction of procedures for calculating the price of medicines, according to a report.
The study recommends widespread changes to the procurement of patented drugs and a greater use of generic products.
According to the Delivery of Pharmaceuticals in Ireland report by the Economic and Social Research Institute, which was commissioned by the Health Service Executive, pharmaceutical costs rose dramatically during the 2000s and now account for 17.5 per cent of public health expenditure, compared with 14 per cent in 2000.
Ireland spent more on pharmaceuticals per capita than any other OECD country bar the US, Canada and Greece in 2009. In 2010, the State spent about €1.9 billion on pharmaceutical products.
The report says significant progress has been made in reducing the cost of delivery of pharmaceuticals, both to the HSE and the cash-paying patient, with wholesale margins cut and pharmacy mark-ups falling. However, it says more needs to be done.
The report says savings of up to 25 per cent could be achieved by selecting the lowest price, as opposed to the average, for patented drugs, which is usually based on external price referencing in nine other EU member states.
It claims the benefits of reduced prices would also be realised quicker by having twice-yearly pricing reassessments, as compared with between one-year and three-year reviews as at present. The report calls for tenders to establish prices for generic drugs with the HSE paying the lowest price only.
Under an agreement between the Irish Pharmaceutical Healthcare Association and the HSE, prices paid for brand-name products fell by 35 per cent over a 22-month period once a patent had ended and generic versions of a drug have become available.
The ESRI estimates that for the 20 most frequently prescribed pharmaceuticals with a generic equivalent, savings of at least 10 per cent could be achieved by prescribing non-brand alternatives.
A list of recommended generic alternatives for medical professionals, should be compiled, the study adds. It also calls for pharmacists to be given the right to dispense non-brand products rather than having to give out the actual brand written on a prescription.
Pharmacists should also be able to offer and advertise they will pay some or all of patients’ prescription charges and additional information such as price discounts and rebates in order to promote better competition and attract more consumers.
Tesco, which recently announced its first Irish in-store pharmacies in Naas, Co Kildare, and Balbriggan, Co Dublin, has pledged to implement only the HSE-recommended mark-up of 20 per cent on pharmaceutical products as well as an inbuilt dispensing fee of €3.50.
Tesco’s move has been welcomed by the National Consumer Agency but criticised by the Irish Pharmacy Union, which has warned of job losses in the sector.
In its report, the ESRI criticises the lack of clarity surrounding costs for patients. It says consumers should be informed of a pharmacist’s dispensing fees, pharmacy services and mark-ups through in-store displays using a standard template so they know exactly what they are paying for.
