Medicines pricing agreement extended for six months

Government and pharma companies agree space for discussions on longer-term pricing

Pharma companies have agreed with the Government a six-month extension to the current deal on the price and supply of medicines. Minister for Health Stephen Donnelly said the Government wanted “innovative solutions to funding new medicines” in the future.

On Friday the extension was agreed between the Government and the Irish Pharmaceutical Healthcare Association, which represents the research driven biopharmaceutical industry in Ireland.

The existing deal with drug companies, which has generated savings of about €600 million for the public health service over the past four years, expired at the end of July.

The industry group said the extension to the current agreement would generate for the State further savings through price cuts and a cash rebate. “However, new exchequer funding for new medicines will require policy change. That’s a political call we hope to see in Budget 2021.”

Work on a longer-term overall new agreement for the pharmaceutical sector was postponed due to the Covid-19 pandemic.

The Minister said he was acutely aware of the significant growth in the State’s medicine budget in recent years.

“With the anticipated pressures on public finances, I look forward to working with the pharmaceutical industry in the months and years ahead in seeking innovative solutions to funding new medicines.”

Reimbursement
The Irish Pharmaceutical Healthcare Association said the extension would see the Government sanction reimbursement of new drugs that had been approved but had additional costs for the HSE later this year.

This has been a key issue for the industry.

Last year a block was introduced by the Department of Public Expenditure on sanctioning the use of any newly available medicines by the HSE if they generated additional costs.

The association said a new overall successor agreement, to be negotiated later in the year, “should be based on the principle of joint funding, with industry and the State agreeing between them to cover the cost of new medicines”. It said that was “the fairest way to ensure patients get timely access to the best new treatments”.

It said the new extension to the current deal committed the industry and the State “to engage in shared horizon scanning to make it easier to preview new medicines in the pipeline and predict how much they will cost”.

“In Budget 2021, we are asking the Government to provide adequate new funding for new medicines. The amount required is subject to discussions between industry and the State.”

The extension to the agreement was welcomed on Friday by Mr Donnelly. He said the move would “preserve, for the next six months, the financial benefits to the State from existing pricing and rebate arrangements, as well as provide a further downward realignment of prices later this year”.

“As part of the deal struck with industry, the HSE has agreed to use some of those savings to reimburse additional new drugs this year.”

No disruption

A spokesman for the association said: “The extension provides for the application of savings generated by the industry through price cuts to fund some new medicines that have met State clinical effectiveness and value-for-money tests. That means reimbursement will be restarted this year.”

Medicines for Ireland, the trade association representing the generic drug sector, said it supported the extension and looked forward to participating in talks on an overall new agreement for the whole industry in the months ahead.

Mr Donnelly said the extension of the current deal was important as it meant there would be no disruption to the supply and price of medicines at a time of great upheaval and uncertainty in the health service.

The Minister said he was acutely aware of the significant growth in the State’s medicine budget in recent years.

“With the anticipated pressures on public finances, I look forward to working with the pharmaceutical industry in the months and years ahead in seeking innovative solutions to funding new medicines.”

Pharma companies have agreed with the Government a six-month extension to the current deal on the price and supply of medicines. Minister for Health Stephen Donnelly said the Government wanted “innovative solutions to funding new medicines” in the future.

On Friday the extension was agreed between the Government and the Irish Pharmaceutical Healthcare Association, which represents the research driven biopharmaceutical industry in Ireland.

The existing deal with drug companies, which has generated savings of about €600 million for the public health service over the past four years, expired at the end of July.

The industry group said the extension to the current agreement would generate for the State further savings through price cuts and a cash rebate. “However, new exchequer funding for new medicines will require policy change. That’s a political call we hope to see in Budget 2021.”

Work on a longer-term overall new agreement for the pharmaceutical sector was postponed due to the Covid-19 pandemic.

The Minister said he was acutely aware of the significant growth in the State’s medicine budget in recent years.

“With the anticipated pressures on public finances, I look forward to working with the pharmaceutical industry in the months and years ahead in seeking innovative solutions to funding new medicines.”

 

Reimbursement

The Irish Pharmaceutical Healthcare Association said the extension would see the Government sanction reimbursement of new drugs that had been approved but had additional costs for the HSE later this year.

This has been a key issue for the industry.

Last year a block was introduced by the Department of Public Expenditure on sanctioning the use of any newly available medicines by the HSE if they generated additional costs.

The association said an new overall successor agreement, to be negotiated later in the year, “should be based on the principle of joint funding, with industry and the State agreeing between them to cover the cost of new medicines”. It said that was “the fairest way to ensure patients get timely access to the best new treatments”.

It said the new extension to the current deal committed the industry and the State “to engage in shared horizon scanning to make it easier to preview new medicines in the pipeline and predict how much they will cost”.

“In Budget 2021, we are asking the Government to provide adequate new funding for new medicines. The amount required is subject to discussions between industry and the State.”

The extension to the agreement was welcomed on Friday by Mr Donnelly. He said the move would “preserve, for the next six months, the financial benefits to the State from existing pricing and rebate arrangements, as well as provide a further downward realignment of prices later this year”.

“As part of the deal struck with industry, the HSE has agreed to use some of those savings to reimburse additional new drugs this year.”

No disruption

A spokesman for the association said: “The extension provides for the application of savings generated by the industry through price cuts to fund some new medicines that have met State clinical effectiveness and value-for-money tests. That means reimbursement will be restarted this year.”

Medicines for Ireland, the trade association representing the generic drug sector, said it supported the extension and looked forward to participating in talks on an overall new agreement for the whole industry in the months ahead.

Mr Donnelly said the extension of the current deal was important as it meant there would be no disruption to the supply and price of medicines at a time of great upheaval and uncertainty in the health service.

The Minister said he was acutely aware of the significant growth in the State’s medicine budget in recent years.

“With the anticipated pressures on public finances, I look forward to working with the pharmaceutical industry in the months and years ahead in seeking innovative solutions to funding new medicines.”