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The Minister for Health, James Reilly TD today, 18th June 2012, announced that agreement has been reached with the Irish Pharmaceutical Healthcare Association (IPHA) on interim drug price reductions. The price of certain off patent medicines are to be reduced which will deliver full year savings to the HSE of €20m.

Under the recently expired Agreement between the HSE and IPHA, when a generic equivalent of an off patent medicine comes on the market, the price of the original product is reduced by 20% immediately and by a further 15% after 22 months.

IPHA shall honour the above provisions in respect of any new generic equivalents of original products coming on the market since the Agreement expired on 1st March last.

IPHA have now proposed that when a generic equivalent of an off patent medicine comes on the market, the price of the original product will be reduced immediately by 30% (instead of 20%). In the case of products that have already been reduced by 20% under the existing Agreement but have not yet had the 15% price reduction, IPHA will provide an immediate reduction of 10% rather than having to wait for the expiry of the 22 month period provided for in the existing Agreement.

The estimated saving from these measures of approx €10m in 2012 and up to €20m in a full year. As part of the agreement, the HSE will give its approval to the reimbursement of drugs which in the normal course of events would have been approved for reimbursement under the schemes.

The interim price cuts have been accepted by the Minister in advance of further discussions with IPHA which are expected to deliver more significant savings to the Irish patient and taxpayer.