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Generics substitution: Ireland’s plan for reference pricing Posted 21/09/2012

A bill that will be debated this autumn seeks to introduce generics substitution and reference pricing for medicines and medical and surgical appliances in Ireland.

Painful medicine for the health service
Ireland is one of the EU ‘bail-out’ countries and is trying to slash government spending in every possible way. This has concentrated attention on aspects of health care. Ireland’s Department of Health, which accounts for almost a third of all government spending, needed to cut Euros 500 million this year, but a European Commission report found that, to date, only 22% of that had been achieved. Ireland introduced a new bill – Health (Pricing and Supply of Medical Goods) Bill 2012 – on 16 September 2012 to address this issue. On 17 September 2012, Health Minister Dr James Reilly insisted that 30% pay cuts for new consultant doctors will go ahead, despite objections from the Irish Medical Organisation.

The Irish Government thinks this legislation will promote competition between suppliers of interchangeable medicines and will achieve greater reductions in the medicines bill for the state. The introduction of generics substitution and reference pricing has been debated for a couple of years, but the current economic situation means they are likely to be imposed whatever the opposition.

Essential elements of the new system
The bill will end the current system in which a chemist can only dispense the exact drugs named on a prescription written by a doctor and presented by a patient. Under the new system, a pharmacist will be allowed to dispense a cheaper generic alternative to the drug at the patient’s request, as long as the Irish Medicines Board has identified the alternative as having an equal effect and as meeting safety guidelines. Patients who want to continue with medicines that cost more than the reference price will have to pay the difference.

The duties of prescribers will also be altered to facilitate the operation of the reference pricing system. The bill provides for the regular review of the reference price for a group of interchangeable medicines by the Health Service Executive.

The debate continues
A government report noted in 2010 that, in Ireland, generics accounted for only 18% of drugs dispensed under the medical card scheme and 11% of those supplied to private patients, compared to 83% in the UK. It is time to change.

However, the bill is not yet law. Projected demographic trends, the possibility of shortages and patient confusion will be some of the factors cited to try to affect the final shape of the legislation.

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Source: DOHC, HSE, Matheson Ormsby Prentice, Mondaq, The Telegraph

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