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Health Minister James Reilly has today  announced that intensive negotiations involving the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health have reached a successful conclusion with a major new deal on the cost of drugs in the State. The deal is an important step in reducing the cost base of the health system.   

The new deal, with a value in excess of €400 million over the next three years, will mean

• significant reductions for patients in the cost of drugs,
• a lowering of the drugs bill to the State,
• greater access to new cutting-edge drugs for certain conditions, and
• an easing of financial pressure on the health services into the future.

The deal is beneficial in two broad ways,

•  about half the financial value is related to reductions in the cost of patent and off-patent drugs
• the other half is related to the State securing the provision of new and innovative drugs for the duration of the agreement in an exceptionally difficult economic climate.

Dr 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”.

The new deal, combined with the IPHA agreement reached earlier this year, means that €16 million in drug savings will be made this year with much greater savings to be achieved in 2013/14/15. It is estimated that the deal will generate savings of up to €116m gross in 2013.

This landmark deal comes as legislation aimed at reducing the cost of generic drugs makes its way through the Oireachtas. The Health (Pricing and Supply of Medical Goods) Bill 2012, which will introduce a system of reference pricing and generic substitution, is a priority for the Government. It is expected that the Bill will be enacted before the end of the year and will deliver further savings in the costs of medicines for the health service and private patient.

The Department and the HSE will shortly finalise discussions with the Association of Pharmaceutical Manufacturers in Ireland, which represents the generic drugs industry, to deliver further savings in the cost of generic drugs.