Under the proposed Health (Pricing and Supply of Medical Goods) Bill 2012, pharmacists will soon be able to substitute drugs themselves, while the introduction of reference pricing – which is already common in other countries – will mean that if medical card patients want to receive a familiar brand that costs more than the reference price, then they will have to pay the additional cost.
It has been suggested that this could lead to savings of up to €100 million a year.
So far so good you might say, although there is likely to be some opposition to the legislation.
According to a spokesman for the Irish Pharmaceutical Healthcare Association (IPHA), which represents the makers of branded drugs, pharmaceutical companies would like to see more clarification on the Bill and are hoping to get some amendments as it goes through the process of being enacted.
Some in the industry argue that allowing pharmacists to substitute prescriptions takes away the clinical decision-making authority of doctors.
More problematic however, is the fact that even if branded drugs are replaced with their generic equivalent, it won’t necessarily lead to any great savings.
This is because the current agreement between the Health Service Executive (HSE) and the Association of Pharmaceutical Manufacturers in Ireland (APMI) provides that generic medicines can be priced at up to 98 per cent of the originator product.
So in some cases, even if the generic alternative is offered, the Government can expect to make savings of just 2 per cent.
Indeed a recent report suggested that the HSE pays about 12 times more than the NHS in Britain for generic drugs.