The Health (Pricing and Supply of Medical Goods) Act 2013 (the
"Act") introduces a system of generic
substitution, which enables pharmacists to substitute a cheaper
"generic" medicine when a more expensive
medicine has been prescribed. The Irish Medicines Board (the
"IMB") has been given the task of
deciding what medicines are interchangeable and compiling an online
list of interchangeable medicines. The Act sets out the
criteria to be considered by the IMB. Medicines may be
considered interchangeable if the IMB is satisfied that the
products have the same active ingredients in terms of qualitative
and quantitative composition, the same (or appropriately
substitutable) pharmaceutical form, and the same route of
administration.
The IMB started work on identifying classes of interchangeable
medicines before the Act was passed. It is prioritising the
most expensive classes of products, including statins, proton pump
inhibitors, ACE inhibitors, and angiotensin II receptor
blockers.
The Act also establishes a 'reference pricing'
system, which gives the Health Service Executive (the
"HSE") the power to set a common price
that it will pay for interchangeable medicines. The system
does not affect a manufacturer's ability to fix the retail
price of a particular medicine. However, where an
interchangeable medicine is dispensed under any of the
State-sponsored Community Drug Schemes, the State will only
reimburse the reference price for the group of interchangeables to
which the dispensed medicine belongs.
The HSE will review the reference price set for a group of
interchangeable medicines at least once a year. The HSE has a
wide discretion in setting the reference price and it is widely
anticipated that the reference price will be the price of the
cheapest medicine in a particular group of interchangeable
medicines.
Finally, the Act imposes an obligation upon the HSE to formally
establish and maintain a list of medicines and appliances
reimbursable under the community drugs schemes. This is not a
new development, as details of products currently reimbursable in
Ireland are already maintained by the HSE on the reimbursement
list. All products on the existing list will be automatically
deemed to be on the reimbursement list established under the
Act. A minimum notice period of 28 days must be observed by
the HSE before items can be removed from the reimbursement
list. This is to allow the supply chain time to adapt to a
decision to remove products from the list.
It remains to be seen how the reforms will operate in practice in
the marketplace, and how decisions on interchangeability and
pricing will be received by industry. Where a party is
aggrieved by a decision of the HSE or IMB under the Act, it may
appeal to the High Court within 30 days. This short timeframe
emphasises the need to take advice at an early stage and act
quickly regarding any anticipated decisions under the Act that
could affect your business.
For more detail regarding the Act, please click
here*.
*These articles first appeared in International Law Office
Healthcare & Life Sciences newsletters on 19 June 2013 and 28
November 2012
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.