A new price agreement between the State and drugs manufacturers is on course to achieve savings of €140 million in its first year, according to the industry.
The prices of almost 1,000 commonly-used medicines have dropped since last August following the deal between the HSE and the Irish Pharmaceutical Healthcare Association (IPHA).
This will result in annual savings to the State of €78.4 million, an analysis of the individual price cuts by the association indicates.
It says the reductions are due to price realignments and the fact that off-patent products are now facing greater competition.
A further €65 million in rebates is due from IPHA members to the HSE, this bringing total savings to over €140 million in the first 12 months of the agreement.
The association says it welcomes indications that the HSE intends to apply similar price cuts and rebates to non-IPHA companies from November 1st, thereby leading to further savings.
“It has also been established practice that manufacturers of certain generic products would also face price cuts after an IPHA agreement and IPHA looks forward to confirmation of this,” it said.
At the time the deal was reached last July, the Department of Health said the four-year agreement would result in savings of about €600 million from IPHA companies, and €150 million from others.
Under the agreement, Irish drug prices are set to an average of 14 European countries, with Greece, Italy, Sweden, Portugal and Luxembourg added to the existing nine countries used for comparisons.
"The central purpose of the agreement is to ensure medicines are supplied at reasonable prices for Ireland and that savings are generated enabling new, innovative medicines to be made available to Irish patients," said Oliver O'Connor, chief executive of IPHA.
“The policy goal of providing new medicines to patients is as important as savings, and IPHA will monitor this carefully. Patients and their doctors rightly expect that savings would be applied to providing new medicines to them as quickly as possible,” he said.
