Drug cuts will save money

A government report for Health Minister Mary Harney due next month will outline price cuts in generic medicines to a level 20 to 30 per cent below proprietary drug prices and the cuts are likely to take effect from next September.
When proprietary medicines come off-patent, there is normally a 35 per cent price reduction and a cut of the same order is warranted in relation to oral nutritional supplements (ONS), the report will also find. ONS are now likely to be treated in the same way as pharmaceuticals.

Yearly savings of more than €20 million are projected to result from lower generic prices under the new drugs plan, with the price cuts in ONS set to yield further savings of €10.5 million annually, according to a blueprint from the Implementation Group, set up in the wake of Dr Michael Barry’s Government commissioned drugs prescribing report. The blueprint is due to go to the Minister in three weeks’ time.
The generics plan is likely to herald savings far greater than the initial €20 million yearly projection, in Dr Barry’s view. This is because planned new measures will also boost the rate at which generics will be prescribed in future. The planned process would not only produce savings, it would also encourage doctors to prescribe generics — as they would be satisfied that savings will be going to the State, Dr Barry believes. The rate of pure generic (open) prescribing in Ireland is very low, at 2.6 per cent by volume. Branded prescribing accounts for another 16 per cent.
Ireland spends €30 million per year on ONS, the second most expensive products on the community drug schemes. This country pays a price premium compared to the UK. Overall, Dr Barry believes that drugs schemes savings of €100 million are achievable. Other savings will come from altered prescribing practices. New Quality Prescribing Indicators (QPIs) could save in excess of €15m per year.
With a new IPHA deal with drug manufacturers due to be negotiated in September, Dr Barry wishes to see price reductions ‘up front’.
And if the Implementation Group’s recommendations are approved, Dr Barry would like to see all the savings implemented within a 12- to 24-month period.
The aim is to ‘make savings without impacting on patient care,’ and Dr Barry maintains that decisions will be made based on clinical evidence.