Bill ‘will improve DPS efficiency’

A 20 per cent retail mark-up applies to the Community Drugs Schemes, which includes the DPS, and is paid to community pharmacy contractors

The Government says it is making moves to ‘improve the efficiency and cost-effectiveness of the Drug Payments Scheme’.  Gary Culliton reports.

Draft Heads of a Bill are currently being prepared to facilitate the introduction of reference pricing and greater use of generic drugs, which will “improve the efficiency and cost effectiveness of the Drug Payments Scheme (DPS),” the Government has said.

Non-pay expenditure associated with the DPS has decreased significantly since 2008, from €353.7 million to €284.3 million for 2011. The figures include retail mark-ups and dispensing fees paid to pharmacists for dispensing the prescribed items. The reduction in the total cost of the scheme in recent years is due to a number of factors, including agreements with manufacturers to decrease the reimbursement prices of medicines supplied under the Scheme.

There were increases in the monthly expenditure threshold and changes in the eligibility status of patients (for example, DPS card holders becoming medical card holders).

Under the DPS, an individual or family has to pay €132 each month for approved prescribed drugs, medicines and certain appliances. The monthly expenditure threshold was €90 in 2008, and was €100 after 2009 but now stands at €132. The scheme covered 3,814,934 claims and 14,455,916 items in 2008. It covered 3,836,264 claims and 11,355,342 items in 2011.

The introduction of reference pricing will require patients to pay the additional cost of items priced above the reference price set by the HSE. While this will not raise revenue for the HSE, the intention is that it will “make patients more price sensitive and increase the use of more cost-effective medicines”, the Department of Health said.

A 20 per cent retail mark-up applies to the Community Drugs Schemes, which includes the DPS, and is paid to community pharmacy contractors. This mark-up does not apply to the GMS. Non-pay expenditure associated with the Long Term Illness (LTI) scheme has decreased significantly (from €145.7 million to €124.5 million) since 2008, when there were 556,873 claims and 2,565,944 items. In 2011, there were 978,111 claims and 3,178,861 items. The figures include retail mark-ups and dispensing fees paid to pharmacists for dispensing the prescribed items.

Ageing population
The output of the LTI scheme is such that approximately 2.95 million prescribed items are supplied to patients. The number of items dispensed has continued to increase. Factors causing this are thought to include an ageing population and increased numbers of people with qualifying illnesses, in particular, diabetes.

Notwithstanding the governance measures being undertaken by the HSE and more global measures regarding drug prices and margins paid to community pharmacy contractors, it is likely that the LTI scheme will continue to grow in numbers of claims and items and the overall trend in cost increase will continue in the short-to-medium term, the Department of Health said.

According to the 2012 HSE Service Plan, a net additional €49 million is being provided for community demand-led schemes which, together with savings measures of €124 million mainly from further reductions in drug prices, is designed to fund the cost of additional medical cards and the extension of GP visit cards to claimants under the LTI scheme.