Pricing and reimbursement of drugs in Ireland

Expenditure on healthcare in Ireland, which is mainly derived from taxation, has increased considerably in recent years to an estimated € 9.2 billion in 2003. Pharmaceuticals account for approximately 10% of total healthcare expenditure. Approximately one-third of patients receive their medications free of charge whilst the remaining two-thirds are subject to a co-payment threshold of € 78 per month, i.e. € 936 per year. The price of medications in Ireland is linked to those of five other member states where the price to the wholesaler of any medication will not exceed the lesser of the currency-adjusted wholesale price in the United Kingdom or the average of wholesale prices in Denmark, France, Germany, The Netherlands and the United Kingdom. A price freeze at the introduction price has been in existence since 1993. Despite the price freeze, expenditure on medicines on the community drugs scheme has increased from € 201 million in 1993 to € 898 million in 2002. The two main factors contributing to the increased expenditure on medicines include “product mix”, the prescribing of new and more expensive medication, and “volume effect” comprising growth in the number of prescription items. Changing demographics and the extension of the General Medical Services (GMS) Scheme to provide free medicines for all those over the age of 70 years have also contributed. Prior to reimbursement under the community drugs schemes, a medicine must be included in the GMS code book or positive list. A demonstration of cost-effectiveness is not a pre-requisite for reimbursement.