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Tuesday 30 September 2014

Pharmacies fail to reduce prices after change in law

Consumer chief hits out as our new survey finds little difference in the cost of generics since HSE initiative

BRIAN BYRNE and CLODAGH SHEEHY

Published 16/02/2014 | 02:30

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Pharmacies fail to reduce prices after change in law
Consumer chief hits out as our new survey finds little difference in the cost of generics since HSE initiative

THE consumer watchdog has called for an investigation into the price of prescription medicines after pharmacists have failed to cut the price of generic drugs.

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The Consumers' Association of Ireland (CAI) hit out after a price survey by the Sunday Independent revealed that, despite new laws introduced last August, the cost of branded and generic drugs have remained the same or have been reduced only slightly.

Our nationwide survey also reveals that a low-cost pharmacy in Dublin, which had been hailed as a "game-changer" in a bid to dramatically reduce the high price of generic drugs charged here, has failed to push other pharmacies to significantly drop their prices.

These remain up to 76 per cent higher than those charged by the Healthwave pharmacy in Dundrum, when comparisons including both branded and generic drugs are made.

CAI chief executive Dermott Jewell told the Sunday Independent: "The fact that the prices have not come down would give concern that

perhaps it merits investigation or consideration by the Competition Authority as to why there has been no movement whatsoever."

The introduction of reference pricing by the Health Service Executive (HSE) last August has brought down the prices of just a handful of generic drugs.

Reference pricing sets a specific low price that the HSE will pay for a generic drug on its list, which in turn brings down the price for both medical card holders and private customers. However, there are currently only a few drugs on this list.

In the meantime, consumers are being asked to pay an average of 57 per cent more on a range of branded and generic drugs to treat conditions from diabetes to cholesterol and depression.

Our survey found a difference of €25.09 for a 28-day prescription of a well-known anti-depressant, which cost €31.56 in a Galway pharmacy compared to the €7.95 charged by Healthwave's low cost subscription service.

Patients who register with Healthwave in Dundrum pay a €25 annual fee and can avail of a whole range of medicines at cheaper prices.

Jewell had predicted that the launch of the Healthwave Pharmacy in Dundrum would force pharmacies nationwide to drop their prices. He expressed dismay that they have failed to do so.

"It's a terrible shame. It really is a concern as to why nobody has broken ranks. It comes across as highly unusual in a market that has been so seriously challenged," he added,

Our survey looked at the average prices of the 10 most prescribed medicines in Ireland – both brand name and generic alternatives – at pharmacies across the country. We also compared these with the prices of Healthwave's Healthpass service.

The pharmacy prices were for private customers and included a dispensing fee, which is set by each individual pharmacy and can range from €3.50 up to €7 per item.

The Competition Authority said it would not investigate pharmacies for failing to lower their prices. But a spokesman added: "We're watching this with interest to see how the industry responds. It may well spark off further initiatives by other pharmacies, which is a good thing."

The Healthwave initiative is not the first time an attempt had been made to shake up the pharmaceutical industry.

In 2012, Boots introduced what was considered a revolutionary pricing structure when it replaced the old percentage mark-up system with a flat €7 dispensing fee per item, a move which forced some other pharmacies to follow suit.

The Irish Pharmacy Union (IPU) said that it would not discuss "prices set by individual members".

A spokesperson defended the overall cost of drugs in Ireland, saying: "Fees and margins are not pure profit; they cover the cost of providing a personal and professional pharmacy service in every community in the country – a service recognised by Government as competitive and cost-effective."

The spokesperson added: "Medicine prices have been falling consistently for several years and this trend will continue for the foreseeable future.

"Both private patients and the State have benefitted from these reductions."

Meanwhile, Healthwave director Shane O'Sullivan said between 2,000 and 3,000 people had signed up to the Healthpass initiative since the launch of the subscription service last month.

And the 27-year-old pharmacist said a further 50-100 new customers are coming on board everyday.

"It's been going great. We've had a fantastic response from customers. People are queueing most days since we announced Healthpass," he said.

WHY GENERIC DRUGS HERE ARE NOT MUCH CHEAPER SEE BUSINESS, PAGE 9

O'Sullivan said that his low prices are based on sales volume, and the fact that he does not charge a dispensing fee. He said that while the majority of the prescribed medicines he sells are generic, he does offer some brand name medicines where generic versions are not available.

He added that he does not buy his stock in bulk, but receives a twice daily delivery from one of the country's biggest drug suppliers.

And he revealed he is now looking to expand the business into a number of new locations across the country, including Cork and Galway.

"I'm sure other pharmacies are waiting to see how it plays out for us and whether it's a model that can work for them as well. I'm sure people will copy it and follow it as the months go on, no doubt," he said.

Sunday Independent

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