Health (Pricing and Supply of Medical Goods) Bill 2012


Dáil Éireann 17th October 2012

Thank you for the opportunity to speak on this Bill

Value for money is the key term when it comes to the task facing the current Government and given the huge challenge ahead of us in terms of stabilising the country’s finances and rectifying the fault lines in the economy, every single item of expenditure has to be assessed in terms of value for money.

I wish to commend Minister Reilly and his officials on the hard work behind the scenes that went into the Bill before the house today. It is staggering to think that until recently there was no statutory basis for pricing medical goods in Ireland, although well-established administrative procedures were in place, including agreements between the state and pharmaceutical manufacturers on the price of medicines.

Generic substitution is a key provision in this Bill. It will allow pharmacists to substitute a cheaper medicine which has been deemed interchangeable with the one prescribed, but only on the agreement of the patients. However, this Bill does make it mandatory for pharmacists to suggest this substitution to patients. Thus, every patient presenting at a pharmacy across the state has the opportunity to save the state much-needed money if they feel confident that the generic substitute is equally as good as that prescribed.
Two further safeguards are in place in that the pharmacist retains discretion to dispense the original if they believe that the generic substitute would be prejudicial to the health of the patient and the doctor or prescriber also has the option to specify that the substitution should not take place. I note that the Irish Epilepsy Association has raised concerns that substituting branded epilepsy medications with generic equivalents or switching of drugs, could could lead to recurrent seizures in some people and while the Bill does not exclude certain medicines, the provision that a prescriber may indicate that a particular prescription may not be substituted could apply in this case.

The Irish Medicines Board will be responsible for the designation of interchangeable medicine and the medicine provided must have the same active substances, be in the same pharmaceutical form and have the same route of administration.

The setting of a reference price is another key provision in this bill and if patients opt for a product that costs more than the reference price, they will have to pay the additional cost themselves. The promotion of price competition between suppliers will be a key factor in the success of this Bill and perhaps the model used here for pharmaceutical supplies could routinely be used elsewhere.

I believe that one implication of this Bill is that it will heighten awareness at every step of the dispensing process in relation to the eventual bill which will have to be picked up by the state. When one considers that between 2000 and 2009, per capita spending on pharmaceuticals grew by 8.7%, the need for cost containment becomes very apparent.
It must be remembered that the OECD average growth rate in spending per capita in that time period was 3.5%. However, while costs mush be kept as low as possible, this must also be balanced with the need to ensure that Irish people can benefit from the huge advances in medicines seen in recent years and that the very best in terms of pharmaceutical options continues to be available to patients.

Much of the increase in costs has arisen from the medical card scheme. The economic crash of recent years resulted in increased unemployment, which in turn resulted in increased eligibility for medical cards and increased expenditure. However, volume increase is only one element of the overall picture, price increase and a changing product mix have also had repercussions in recent years. In 1997 the average cost per dispensed item on the medical card was €11.20, ten years later it was €23.27.

As medical knowledge increases and medical interventions are improved, medicine will become more specialised and in all probability, pharmaceutical supplies will be increasingly targeted to an individual and this may result in increased costs. Thus, while welcoming any and all savings which will accrue from this Bill and the cost-saving drive it represents, this Government must never take our eye off the ball in terms of disease prevention and the promotion of good health.

A percentage of the saving accruing from this Bill should be ring-fenced for health promotion, for initiatives to decrease smoking levels among young people, an increased anti-smoking advertising campaign, for initiatives to get entire communities moving, and to encourage people of all ages to become more active.
Of course, this Government’s continued efforts to get people back to work and to create the economic environment where businesses, both big and small, can start re-hiring people, will eventually pay dividends in terms of reduced numbers of people on very low incomes and thus reduced numbers eligible for medical cards.

Anyone responsible for a household budget in the current straitened economic circumstances will agree that every item of expenditure has to be examined, alternatives explored and new ways of doing business identified. Similarly, with the state spending €1.4 billion on drugs through the various schemes, it is only right and proper that every avenue is explored in terms of achieving savings.

Real savings will be achieved from this Bill, savings which will, I believe, be used to shield front-line health services from on-going cuts, while at the same time providing a safeguard for patients, ensuring that they continue to get a top quality service from both their doctor and pharmacist.