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Thursday 2 October 2014

EU loophole for drug firms costs taxpayer €54m in extra fees

Eilish O'Regan Health Correspondent

Published 04/03/2013 | 05:00

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A European Union loophole is costing Irish taxpayers millions of euro in additional fees for medicines.

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The Irish Independent has learnt that five drug companies have been allowed to extend the patent of branded medicines for an extra six months here, reaping a top price for the medicines.

Once the patent of a branded drug runs out, the financial returns to the manufacturer dramatically drop because it has lost exclusive rights to its sale and other companies can make cheaper versions.

The six-month extension was granted to encourage companies to spend more on researching paediatric medicines because treatments for children are suffering from serious under-investment.

However, it means the taxpayer, through the Health Service Executive (HSE), is paying over the odds for these medicines for another six months and cannot purchase cheaper generic versions during that time.

The concession has cost at least €54m in 2011, according to the most up-to-date figures.

The figures are based on the costs of the drugs to the HSE under various state schemes including the medical card, drug payment and long-term illness schemes.

Several of the drug companies contacted by the Irish Independent could provide no examples of progress they had made in developing more medicines for children in return for the rise in their profits due to the EU perk.

They also refused to divulge how much income was generated, saying it was commercially sensitive information.

The companies which were allowed the six-month extension are Bristol Myers Squibb, AstraZeneca, Pfizer, Merck Sharp & Dohme and Novartis.

The drugs granted the extension included the anti-cholesterol drug Lipitor; Singulair, which is used to prevent asthma attacks; and Diovan which treats high blood pressure.

Others include Xalatan, which treats the eye disease glaucoma, and Arimidex, which is given to women with breast cancer after surgery.

The so-called Paediatric Regulation came into force in the EU in 2007.

The purpose is to facilitate the "development of medicines to treat infants and children in order to ensure that new medicines are researched and authorised for children under 17 years of age".

A spokesman for the Department of Health was unable to quantify the benefit of the extension but pointed to a report carried out over a year ago by the European Medicines Agency.

It found there is evidence of increased and better research on paediatric medicines and importantly "increased availability of paediatric medicines and age-appropriate information regarding these medicines".

The extension has been particularly lucrative for companies supplying Ireland because of our traditionally higher drugs prices.

Irish Independent

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