The Minister for Health, Stephen Donnelly TD has today announced two new Framework Agreements on Pricing and Supply of Medicines 2021-2025.
The multiannual agreements with the Irish Pharmaceutical Healthcare Association (IPHA) and Medicines for Ireland (MFI) represent an important step in reducing the cost of medicines and improving access to innovative new medicines for patients.
The new deals will deliver:
- Improved access for patients to new and innovative medicines
- Reductions in the cost of existing medicines
- An easing of financial pressure on the health services into the future
It is estimated that this will result in the state paying between €600 million and €700 million less for medicines than it would otherwise.
Minister Donnelly said: “The Government wants to ensure that patients in Ireland continue to have access to new and innovative medicines that will serve the greatest need and have a meaningful impact on health outcomes for patients in Ireland. As a result of these Agreements with the IPHA and the MFI, the HSE will be in a much stronger position to meet the increasing demand for existing medicines and also to invest in new medicines over the next four years. “The Government is committed to providing timely access to new and innovative medicines to all patients. The €50m provided for new medicines in 2021 has already had a significant impact on the ability of the HSE to reimburse essential drugs for patients. Over forty new medicines have been approved to date this year, helping people with conditions such as Cancer, Parkinson’s Disease, Spinal Muscular Atrophy and Cystic Fibrosis.
“The €30m allocated in Budget 2022 will have a further significant impact on the availability of new and innovative medicines, including for the treatment of rare diseases. “These new deals also provide greater certainty for industry over the next four years.”
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Notes to Editor
The State has entered into agreements with the pharmaceutical industry since the 1970s, bringing certainty and stability to the supply and pricing of medicines.
The previous Agreement with the IPHA, on behalf of the originator biopharmaceutical industry in Ireland, came into effect on 1 August 2016 and, after two periods of extension, expired on 30th September 2021.
The Agreement with the IPHA is in relation to pricing and supply of on-patent and originator medicines. This agreement, for a four-year period, 1 October 2021 to 30 September 2025, builds on the 2016 Agreement, with all provisions of that Agreement being carried forward, but substantially enhanced in a number of key respects, and providing significant additional value for the State. The new measures in the Agreement include increased rebate contributions from on-patent medicines, closing loopholes in relation to hybrid medicines, changing the reference date for price cuts, and increased savings from off-patent medicines.
The rebate to the HSE on all sales is increased from 5.5% under the current Agreement to 7.75% in 2022, 8.25% in 2023, 8.5% in 2024 and 9% in 2025. A parallel agreement has also been secured with MFI on behalf of the generic and biosimilar industry in Ireland. This four-year Agreement runs from 1st December 2021 to 30th November 2025 and like the IPHA Agreement provides for enhanced price cuts in the case of generic and biosimilar medicines. The provisions of this Agreement will complement the State’s overall efforts in managing the drugs budget, including supporting a competitive market in the off-patent space.
These agreements represents one element of the suite of measures available to curb the growth in the medicines bill and will not preclude the HSE from applying other saving measures under the relevant legislation, including reference pricing and interchangeability, or from pursuing value improvement measures such as best-value-biologic initiatives and increasing biosimilar usage.