Sunday 4 December 2016

Big Pharma says new drugs deal will save country '€12m a month'

But pharmacies now fear medicine shortages in wake of deal, write Sarah McCabe and Dearbhail McDonald

Sarah McCabe and Dearbhail McDonald

Published 24/07/2016 | 02:30

The IPHA, whose members include international companies such as Pfizer, GSK, AstraZeneca and Sanofi Aventis, conducted an impact assessment of the deal which predicts savings of €12m a month, with additional effects as the market evolves (Stock picture)
The IPHA, whose members include international companies such as Pfizer, GSK, AstraZeneca and Sanofi Aventis, conducted an impact assessment of the deal which predicts savings of €12m a month, with additional effects as the market evolves (Stock picture)

A new, four-year framework agreement on medicine prices could generate savings of €12m a month in the first year of its operation, it has been claimed.

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The Irish Pharmaceutical Healthcare Association (IPHA) said the new deal will free up resources to the State for investment in new and innovative medicines not yet brought to market, as well as reducing drugs bills for private patients.

"This is good news for patients who are waiting for access to life-changing medicines," said Dr Leisha Daly, IPHA president and country director for Janssen, the pharmaceutical subsidiary of Johnson & Johnson.

The IPHA, whose members include international companies such as Pfizer, GSK, AstraZeneca and Sanofi Aventis, conducted an impact assessment of the deal which predicts savings of €12m a month, with additional effects as the market evolves.

Under the Framework Agreement on the Supply and Pricing of Medicines, drug prices will be subject to an annual review, with a critical clause that holds that the cost to the HSE can only fall - not rise.

Drug prices will be compared against a larger basket of countries in Europe and there will be a 50pc cut in price of one-off patent drugs once a generic alternative is available in Ireland.

Although the comparative basket has expanded to include 'low-cost' countries such as Greece, Italy and Portugal, critics say that the reliance on list prices in those countries fails to take into account mixed pricing arrangements and 'confidential discounts' on medicines negotiated between pharmaceutical companies and individual governments.

Manufacturers of generic drugs have also complained that a 30pc cut in price on biologic drugs when biosimilar drugs enter the market will delay those products coming to the market. However, this has been dismissed as "a red herring" by the IPHA.

"There has been a perception that medicines in Ireland are more expensive than in other countries," said Dr Leisha Daly.

"Patent medicines in Ireland are on average with other countries. Generic medicines are priced higher in Ireland than other countries."

Several pharmacies have warned that the new deal could lead to medicine shortages and financial losses.

The value of discounts agreed between pharmacies and wholesalers will shrink as the price of medicines falls, said Patrick McCormack, chief executive of Sam McAuleys, the Irish-owned chain of 28 pharmacies.

While accepting that the agreement was a good deal for taxpayers, he estimated that it could cost pharmacies around €250m over its four-year term and place particular pressure on independent operators.

That figure is excluding costs incurred on existing stock which pharmacies have said they don't have time to clear before the new prices kick in, McCormack added.

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