Generics may save E23m per year

The Minister for Health has ruled out nationalising the wholesale distribution of drugs and medicines supplied under the GMS and community drugs schemes as a means of saving money for the Exchequer.

Responding to a series of parliamentary questions last week (October 20) from Sinn FĂ©in TD Arthur Morgan, Minister Mary Harney said her Department and the HSE had been reviewing the pharmaceutical supply chain, from manufacturers and wholesalers through to community pharmacists, with a view to seeking value for money in the State’s drugs bill.

However, she had ‘no plans’ to nationalise the wholesale distribution of drugs.

Earlier in the summer, Minister Harney reduced the wholesale mark-up paid on drugs from 17.66 per cent to 10 per cent, a common sliding dispensing fee across all schemes and a reduction in the retail mark-up paid on a number of schemes – such as the Drug Payment Scheme (DPS) and Long Term Illness (LTI) Scheme – from 50 per cent to 20 per cent. These changes are expected to save E55 million this year and E133 million in 2010.

“My Department and the HSE are continuing to examine all aspects of pharmaceutical expenditure with a view to containing costs, including options for the introduction of a system of reference pricing coupled with generic substitution,” stated Minister Harney.

In 2008, just 18 per cent of prescription items under the GMS scheme and 11 per cent of items under the DPS and LTI Scheme were dispensed generically.

Last year, expenditure on proprietary drugs where there was an equivalent generic available under the GMS, DPS and LTI Scheme was E227 million.

The HSE estimates that there is a price differential of approximately 10 per cent between off-patent proprietary drugs and their generic equivalents.

This suggests that approximately E23 million in savings per annum could be made if there were full generic substitution of products supplied under the State schemes. – Irish Medical Times