Intensive negotiations have been ongoing for months between the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health with the Government hoping to shave a considerable amount off its €2 billion-a-year drugs bill.
Reilly claims the new deal will save the State more than €400 million over the next three years, representing “an important step in reducing the cost base of the health system”.
It is understood that €16 million in savings will be achieved this year and it is hoped a reduction of €100 million will be seen in 2013.
About half the financial value is related to reductions in the cost of patent and off-patent medicines. The other 50 per cent relates to the State securing the provision of new and innovative drugs for the duration of the agreement.
The price of medicines marketed by IPHA companies, including Bayer, GSK, MSD and Pfizer, and which come off patent before 1 November 2012 will be reduced to 50 per cent of their original price by 1 November 2013.
The price of up to 400 patent-protected products which have been available on the HSE Community Drugs Scheme since before 2006 will also be subject to price reviews with expectations of 16 per cent average savings.
Reilly said “given the scale of the financial challenges in health over the next few years, this agreement is vital progress after much hard work”.that they will be able to get new medicines when they become available.