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Health (Pricing and Supply of Medical Goods) Bill 2012 [Seanad]: Second Stage (Resumed) (Continued)

Monday, 17 December 2012

Dáil Éireann Debate
Vol. 787 No. 2

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(Speaker Continuing)

[Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath] That company employs 4,000 people in this sector, a massive economic contribution to the State. I consider myself to be on the left but I agree with colleagues that the 12.5% corporation is the sensible approach. The Government, however, must be sure to get all of the 12.5% because there are all sorts of legal loopholes emerging and we must maximise the amount we get from these companies.

Mr. Gallagher, the managing director of Pfizer Ireland, said that the company is not a charity and that it invests where it believes it will get a return; it is as simple as that and there is no point pretending otherwise. That is straight talk from a man who has invested in Ireland to make money, and that is the bottom line. He has a good quality, highly trained and educated workforce with many graduates from Irish universities. When he says the company is not a charity, he is representing his vested interest. Our job as politicians, however, is broader; we must represent the broad, communal view. Our view must be different and must put patients and taxpayers first.

There is a conflict of interest but there is no reason we cannot deal with this issue. When Mr. Gallagher says Pfizer Ireland is not a charity, that is fair enough but we have a different philosophy. Mr. Gallagher was president of the Irish Pharmaceutical Healthcare Association until recently and he was strongly in favour of the pharmaceutical companies' lobbying of the Taoiseach earlier this year over a HSE decision not approve the new drug payment scheme. Many people were concerned the big companies had more access to Ministers and the Taoiseach than the weaker and smaller groups in Irish society.

These groups must be around the table, I accept that, they provide jobs to Irish people and pay corporation tax, but I worry we might be losing the balance in the debate about the respite care grant. We all jumped up and down about the grant in the past week but the €26 million cut was made to the respite grant anyway. The Minister and many people on the backbenches are privately very unhappy about this but they must face the reality. Are the carers less effective than multinational companies? They did not get a fair crack of the whip, which was the Labour Party's role in Government. That is not a rant, it is a reality. Even at this stage, in the next 24 hours, I ask the Government to revisit the respite care grant. If we are talking about equality, people with disabilities and carers, and building a new, inclusive republic, we should have the courage to say we got the respite care grant issue wrong and should change it. It is never too late and there is nothing about which to be ashamed. I want to represent those with a disability and the carers, and I will keep pushing that issue.

The figures for expenditure on medicines and non-drug items are huge. In 2011, the HSE expenditure on medicines and non-drug items such as dressings supplied to patients in the community was approximately €1.9 billion, including mark-ups and dispensing fees paid to pharmacists and wholesalers. In addition, hospital expenditure was €300 million. The HSE expenditure on medicines and non-drug items supplied to patients in the community has decreased in recent years from €2.01 billion in 2009 to €1.91 billion in 2010. In 2011, the figure had fallen to €1.9 billion. This is in contrast to an increase of 185% between 2000 and 2010. The number of items paid for by the HSE under community schemes increased by approximately €30 million in 2000 to €70 million in 2010. Those are the figures about which we are talking.

Savings have been achieved through the ongoing off-patent price cuts agreed with the pharmaceutical manufacturers and we welcome that. The Department and the HSE continue to engage with the Irish Pharmaceutical Healthcare Association and the Association of Pharmaceutical Manufacturers in Ireland to secure reductions in the price of drugs. In July 2012, an agreement was reached with the IPHA on the interim drug price reductions, which will deliver further savings of €20 million in the price of off-patent medicines. These price cuts were accepted by the Minister for Health in advance of further discussions with the IPHA, which are expected to deliver more significant savings. Negotiations are ongoing between officials of the Department and the HSE and the IPHA since in the interim agreement was reached. I expect these discussions to conclude shortly. I welcome that €20 million reduction because it is close to the €26 million that is being cut from the respite care grant. There have been savings and reductions but we must also ensure the reductions and savings are sensible.

In July 2009, the wholesale mark-up paid on medicines was reduced from 17.66% to 10%, a sliding dispensing fee was introduced and the retail mark-up paid under the drug payment scheme. The long-term illness scheme was reduced from 50% to 20%. These changes result in annual savings of €120 million. That is sensible and we can up our game here when it comes to efficiency.

In June 2011, regulations were made to reduce certain payments by the HSE to the community pharmacy contractors, which included a reduction from 10% to 8% in the wholesale price mark-up of drugs items. There was a reduction from 17.66% to 8% in the wholesale mark-up of controlled drugs and a reduction from 17.66% to 12% in the wholesale mark-up on items. Also, there was a reduction from €62.03 to €31.02 in the high tech non-dispensing fee which led to savings in the region of €34 million. I use those figures because when the negotiations took place with the IPHA, there were reductions of €30 million and €34 million in two sections. Once again, I remind the House the respite care grant cut was €26 million. There are options on the table.

The reaction of the IMO to this legislation is important. It has stated it welcomes the proposals for reference pricing but would not include the maximum potential saving on its own. It stated it does not believe pharmaceutical substitution is the most effective mechanism to support reference pricing and generic consumption. Policies are required to encourage all parties, including patients, doctors and carers, and not just pharmacists to promote the use of generics. There is a potential risk to patients because receiving different medication each time they are given a prescription by pharmacists could lead to non-compliance.


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