Michael Kitt (Galway East, Fianna Fail)
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Deputy Sean Fleming was in possession but is not in the Chamber. I call Deputy Regina Doherty.

Regina Doherty (Meath East, Fine Gael)
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I propose to share time with Deputy Lawlor. This is a much easier topic for me to speak about than the last debate. I am grateful for the opportunity to speak. Many factors contributed to the health care spend in Ireland. Costs of technology, hospitalisations and hospital-based services, fees and drug costs are all major factors that drive the cost of care higher. To be effective, health care reform must address all aspects equally. Regulation and cost containment must be applied to each of these entities to lower cost successfully while maintaining superior quality of care. Across Europe, the pharmaceutical sector has been forced to reduce profits as governments go in search of savings on medical bills. Nothing like the rigour applied across Europe has been applied here, although prices have fallen since 2009. In the past decade, the cost to the State of drugs and medicines has risen to three times the European average, and pharmaceuticals in Ireland are among the most expensive in the world. Ireland has one of the highest spends on pharmaceuticals, with OECD data for 2009 showing that Ireland was fourth highest among OECD countries after the United States, Canada and Greece.

This legislation is one of a number of Government initiatives that aim to drive down the State's medicines bill. October 2012 saw the Irish Pharmaceutical Healthcare Association agree a new medicines supply agreement with the Department of Health and the HSE. The three-year agreement took effect from 1 November 2012 and will provide €400 million in savings. Under the agreement, when a patent on a medicine expires, its price to wholesalers will be reduced to 70% of the original price. After 12 months, the price will be further reduced to 50% of the original price. For existing patent-expired medicines, the price was reduced to 60% of the original price on 1 November, to be followed by a further reduction to 50% of the original price in November 2013. Recently, negotiations were also finalised with the Association of Pharmaceutical Manufacturers in Ireland, representing generic manufacturers, which heralds further significant savings. Added to this, a national task force on prescribing and dispensing has been established to deliver additional cost savings by achieving more cost-conscious prescribing. Due to become operational before the end of 2012, it will address prescribing and dispensing of medicines from the perspective of quality and patient safety and it will assess the suitability of maintaining supply of certain items with limited efficiency where more appropriate items are available.

In parallel with these changes, today’s Bill is making its way through the legislative process. The Government envisages that, once enacted, the new legislation will reduce expenditure by increasing the rate of generic prescribing, which currently stands at approximately 18%. Against this backdrop, it is proposed that a system of generic substitution and reference pricing be established, allowing pharmacists to substitute a cheaper equivalent medicine when a more expensive product has been prescribed by a practitioner. Under the proposed reference pricing system, where two or more medicines are interchangeable, the State will reimburse only the reference price for the group of medicines. The reference price will be the price of the cheapest medicine in the group.

The Bill also provides for the regular review of the reference price for groups of interchangeable medicines and outlines the criteria to be considered by the HSE when setting or reviewing a reference price. What is new is the power the HSE will have to set or review the price of listed items. The Bill sets out the criteria to be taken into account by the HSE when considering the proposed price of an item. It allows the HSE to review and alter the price of items listed and to use a competitive process to determine that price. The Bill also allows the HSE to attach conditions to the supply or reimbursement of listed items in the interests of ensuring patient safety, improving cost effectiveness, maximising appropriate use of the items covered or appropriately applying the resources available to the HSE. The introduction of generic substitution and reference pricing has the potential to deliver significant savings for the State in the medium and long term. The Department of Health said it hopes to cut the drugs bill by another €50 million a year using generics.

I welcome reform and innovation in health care and the pharmaceutical industry in particular. However, it is also important not to lose focus on how such reforms will affect the needs of particular patients. I add my support to the amendment proposed by Brainwave, the Irish Epilepsy Association. Professor Norman Delanty, director of the epilepsy programme in Beaumont, has stated that anti-epilepsy medications cannot be substituted by a generic drug without having profound consequences for the well-being of those who suffer from epilepsy. The doses of epilepsy medications are concentrated carefully for each individual to ensure good seizure control. Any variation may disturb the balance and result in an otherwise avoidable seizure, even if the active ingredient of the drug is not changed. This can have a major impact on the patient’s quality of life, as well as having clinical and financial implications to the primary and-or secondary health care system. Anti-epileptic drugs should not be subject to generic substitution and should be permanently excluded from any legislation introduced in the country. Furthermore, the exclusion of anti-epileptic drugs from any new system of generic substitution was recommended in a report, entitled Proposed Model for Reference Pricing and Generic Substitution, and known as the Moran report, which was published jointly in May 2010 by the Department of Health and a HSE working group.

The campaign to exclude anti-epilepsy drugs from the Bill is supported by the entire epilepsy community and the health care professionals who treat and care for people with epilepsy. There is a model for this amendment as the United Kingdom, Austria, Belgium, the Czech Republic and Greece do not allow substitution of anti-epilepsy drugs for generics. Countries which have excluded many anti-epilepsy drugs from substitution include Denmark, Finland, Germany, Portugal, Spain, Sweden and Switzerland.

Over-spending on medications means the Government has less money to invest in other areas of health care. This legislation will have significant consequences for all stakeholders in the pharmaceutical supply chain. I am supportive of it but I appeal for the exclusion with regard to anti-epilepsy medication to be considered seriously. The patient must remain at the heart of our health care reforms.

Professor Charles Normand, professor of health policy and management at Trinity College Dublin, has contended that the economic crisis has provided the health service with an opportunity to restructure itself and that better services to patients can be delivered at a lower cost. Despite the enormous and continuing challenges facing the health services, particularly on the funding front, the Government’s ongoing structural reform is well on its way to leading to a better service for patients. The transformation of our health care services calls for a change not only in what we do but also in how we do things, how we work together and how we commit to each other. By implementing the Bill as part of the reform programme, we can collectively bring about change that will fulfil our hopes and ambitions for health care services in Ireland. Building on the commitment and the success that has been delivered will take us to a position where we all feel proud of what we have achieved.

Anthony Lawlor (Kildare North, Fine Gael)
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I welcome the Bill, which is a commitment by the Government to make radical changes to all sectors of society. Something like this makes savings and makes drugs more available to individuals.

I commend the Minister on his successful negotiations with the pharmaceutical industry, the medical profession and the pharmacists. Currently, we are spending €1,900 million per annum on drugs and we hope to save approximately €135 million per annum over the next three years. This is very welcome.

We need to explain to the public exactly what is meant by generic drugs. The vast majority of people who will avail of this new system might not know what is meant by a generic drug. It is important that we communicate this information. The interchangeable list will be key. If an elderly person who has been used to a drug for a long period is told they can now use a new drug, it must be clearly explained that the new prescription is not for a different drug but for the same drug under a different name. For example, Ventolin and Airomir are both used in the treatment of asthma but they have the same active ingredient, which is salbutamol. When people know the key part of two drugs is the same, irrespective of the name of the drug, they will understand the system better.

The saving made by the new system is a key factor, but we must also be aware of the fear factor. A customer may be concerned if a pharmacist offers an alternative drug and may be worried that the drug being offered does not have the proper active ingredient or the correct percentage of the active ingredient. While the Bill, and the savings it will make, are welcome there must be a huge communication programme so people, particularly elderly people, are not confused when they are offered an alternative drug. Doctors must be involved in explaining this to patients. They have the trust of their patients. The involvement of doctors will make the scheme easier and more understandable.

The Minister can review the list regularly every three years or more often. This is important. New drugs are coming onto the market all the time. A new drug may be an improvement on an existing drug but may be more expensive because it is still under patent. We need to be able to put these new drugs, which will improve the health of patients, on the list more quickly than at present. I realise that will mean an additional cost, but if we can save money on one side we should use that saving to make improved drugs available more quickly.

I reiterate what Deputy Regina Doherty said about anti-epilepsy drugs. With other Deputies, I attended a talk given by Brainwave, the Irish epilepsy association. Minute changes in generic drugs can have a serious implication for people on long-term anti-epilepsy drugs. It is important that we take the fears of the association into consideration.

I welcome the hard work done by the Minister and his Department on the Bill. This is something we should have done a long time ago. There was a fear that if we did something like this the pharmaceutical companies would shut up shop and leave. Most of us understand that the major pharmaceutical companies are here largely because we have a low rate of corporation tax, a highly skilled workforce and a readily available natural resource. For those reasons, we should not fear the use of generic drugs.

I welcome the hard work done in preparing the Bill. The health service will get better value for money and we may be able to use the money saved in other areas in the future.

Finian McGrath (Dublin North Central, Independent)
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I thank you, a Leas-Cheann Comhairle, for the opportunity to speak on the Health (Pricing and Supply of Medical Goods) Bill 2012. This is an important Bill and it is also important to develop the debate on drugs, their cost and the efficient running of our health services. Because of the downturn in the economy the cost of drugs is now a huge issue, but efficiency and the cost of drugs to our health service should always have been an issue.

In dealing with the issue of pricing, we also need to ensure the safety of drugs. Safety must never be at issue in the supply of drugs, particularly by multinational companies.

This debate also gives us an opportunity to look closely at multinational drugs companies and their role in Irish society. They are an important aspect of the broader debate and of the debate on the Bill.

The pricing of drugs has emerged as a huge issue, but we must maintain a balance and consider the broader view of community life and the safety of patients. Recently, I was asked by a drugs company in the United Kingdom to lobby the Government regarding a new drug that will have a major impact on cystic fibrosis patients. I have gone to the Minister, made the details known to him and recommended the drug, which might have a major impact on 160 cystic fibrosis patients. The company claims this is a radical new drug that could save lives, and the Minister and the HSE appear to be open to this idea.

Sadly, the drug has a very high cost, but what is the cost of a human life? To supply the drug to a cystic fibrosis patient could cost between €200,000 and €400,000 per year, but it has huge potential to save the lives of these people. I have given the information and the name of the company to the Minister and to the HSE. I ask the Minister of State to look at the proposals regarding this new drug that has just been invented. It could have huge potential. We can deal with its cost at a later date. If it can save human lives we should get on with it. This issue also has important implications for the Bill.

The main objectives of the Bill are to promote competition between suppliers of interchangeable medicines and ensure value for money in the supply of medicines or other prescribed items to patients under section 59 of the Health Act 1970. The Bill will enable patients to opt for lower cost interchangeable generic medicines, establish a list of prescribed items that may be supplied or reimbursed by the HSE to patients under the GMS scheme and community drugs schemes, and establish mechanisms for setting the prices of these items where they are so supplied. No cost to the Exchequer will arise from the Bill and the introduction of generic substitution and reference pricing has the potential to deliver significant savings for the State over the medium to long term.

Cost saving is positive and sensible and we need to look seriously at it. We must also be careful to get the balance right. The pharmaceutical sector is a major employer in Ireland. A number of my colleagues referred to corporation tax. Yesterday in The Sunday Business Post I read an interview with David Gallagher, managing director of Pfizer Ireland.

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 no-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 Health Care 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.

In addition the Irish Medical Organisation, IMO, has suggested that current policies for setting generic prices are not optimal and it has argued for the promotion of more competition as a means of achieving price reduction. It is important when an important stakeholder such as the IMO is on the pitch to listen to its contribution and recommendations and I urge the Government to consider them. The organisation has good recommendations for a generic policy, including, for example, reducing the cost of generic medicines by ending pricing agreements for off-patent and generic pharmaceuticals and promoting managed competition.

The organisation has called for the Irish Medicines Board to ensure regulation does not unduly discourage the entry of safe generic medicines to the market. This is something I referred to earlier with regard to safety. I always tend towards the Irish Medicines Board because it is important. Safety should be an issue as well. IMO initiatives to encourage the manufacture of generics in Ireland should be explored. It has recommended a system of pharmaceutical reference pricing for off-patent generic medicines.

The IMO also proposes transparency in the distribution chain and has called for the regulation of margins. It has highlighted several important and relevant aspects of the legislation and the need to introduce a public awareness campaign to inform the public of the advantages of generic medicines and to alleviate any concerns. That is important. When it comes to the broader issue in the debate, one of the IMO recommendations is to carry out a cost benefit analysis to compare newer and what are frequently more costly options. Basically, these are the views of the IMO and because it is a major stakeholder, it is important to consider them.

The Irish Pharmacy Union, IPU, is the representative organisation for community pharmacists in Ireland. It has broadly welcomed the plans to enable pharmacists to dispense cheaper generic drugs and it has broadly welcomed the legislation. As with other stakeholders, the IPU has not commented on the specific provisions in the Bill to date. It has stated that generic substitution is standard practice in many other countries and it would mean lower medicine prices for patients as well as considerable savings for the State. It believes generic substitution should be introduced without delay. The IPU is on board in this regard. However, in the case of the introduction of reference pricing, the IPU has advocated a cautious approach. It has recommended that reference pricing is a highly complicated mechanism and does not represent a quick fix. It believes careful consideration and engagement with key stakeholders is required to ensure there is no disruption of supply. It believes the impact of reference pricing on patients and pharmacists rather depends on the model of reference pricing introduced. In some countries reference pricing has led to a shortage of certain medicines. It is important when there is a group such as the IPU on the pitch to ensure we listen to its views.

The final group which we must consider is made up of patients groups and patient advocate groups. Their concerns have centred on the question of whether medicines are genuinely interchangeable for particular conditions. Several advocacy groups have requested that certain medicines be exempted from substitution. For example, the Irish Osteoporosis Society presentation to the Joint Committee on Health and Children recommended that certain medicines be exempt from substitution. My colleague referred to the Irish Epilepsy Association. It has argued that the substitution of branded epilepsy medicines with generic equivalents or switching from one generic to another generic version of the same drug can lead to a recurrence of seizures in some people whose epilepsy is otherwise under control. As part of the debate on cost saving we should take a broader view and I acknowledge the Government is doing so. One should listen to different vested interest groups. However, as someone who will promote patient issues, I am strongly supportive of the Irish Epilepsy Association and its arguments.

I welcome the broader debate. We all seek efficiency and cost savings on drugs in the State because it is a significant issue. I noted earlier in my introduction that it was important to get the balance right. There is a major contribution from multinational pharmaceuticals companies in the country. We want to hold on to them because they employ Irish graduates, staff and workers. They make a considerable contribution, but one cannot come to the table with too much clout. If one believes in equality, one must believe in fair play, and I am concerned about some of the industry's excessive clout at times, especially at the expense of more vulnerable groups in Irish society. I welcome the debate and I thank the Leas-Cheann Comhairle for this opportunity.

Damien English (Meath West, Fine Gael)
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I welcome the opportunity to contribute to the debate on the Health (Pricing and Supply of Medical Goods) Bill 2012. It is unusual to be in the House on a Monday and it is good to get a chance to speak on this issue, among others. The Bill is another important part of a practical tranche of legislation which has come through the House lately. It will deliver greater reform and competition for the broader health sector. The Bill seeks to ensure value for money for the taxpayer and the consumer on a revenue-neutral basis. It is important to note, at a time of great public and media cynicism about politics and the work of this House, that the Bill answers the commitment given in the Fine Gael and Labour Party programme for Government to reduce the State's large drugs bill and to reduce the cost to individuals of medicine. The commitment was that this would be achieved through reference pricing and greater use of generics.

It is important to address not only the cost of medicines to the consumer but the cost to our health services of the purchase and supply of drugs. There has been a difficulty this year in getting reductions quickly and in securing the deals to prevent some of the necessary cuts or adjustments in the budget of the health service at the end of the year. It is a pity this has occurred but, ultimately, these things are delicate, they take time and they must be done right. We must ensure we are in a position for next year's health service budget - I believe we will be - to take advantage of the commitments and the deals that have been done this year. We would rather they had been done earlier. They should have been done years ago but they were not. At least the reforms are happening now and it is about time we benefitted from them.

I have no doubt that under the parties in government we will get great reform of the health service. However, that reform cannot happen overnight, in one week or in two years. It will take the full four or five year term of the Government and possibly one or two years into our second term in government. We must keep on with the fight to fix the health service. This Bill, along with other discussions held in recent months, is part of the reform.

In the short term, things will be difficult. In the past one or two months we have seen cuts to home help and home care packages and so on. In some cases there are areas where one can make changes without affecting others, but in other areas it is not possible and services are hit. This is because, in the short term, when one is trying to root out problem areas and the mismanagement and misspending that has taken place over the years, it takes time to find all the areas where money is going to waste. However, we must do this to reduce the negative effects on the front line and those who need it most. This is what we are trying to do. We are trying to find areas where we can save money in order that we can protect those on the front line. No one wants to see any reductions to home care packages or home help. I accept the Ministers involved are trying to bring in new ways of doing this to ensure those who need it most are getting the services.

I hope the reforms are introduced and bring about better management of resources on a 12 month basis rather than nine months and a crash course at the end to make savings. We should get a spread of change more easily because if one only makes budget savings in the last two months, inevitably one goes to the quick fix areas where one can save cash. It is as simple as that. I worked in the accounts area of the health service and I know what happens. To save money, sometimes it is easy to go to the areas where one can save cash quickly. These are easily identified but often they are the areas of greatest importance. There is no choice if we leave it until the last minute. We must manage the health budgets over a 12 month period and this involves every level of management and every worker in the health service doing their bit as well as the Ministers at the top. There must be a joint effort across the board. I speak to staff on a daily basis who can identify areas of waste. These staff should be allowed to speak up and must be listened to in order to bring about these changes. I have no doubt that we can save money in the health services without affecting services but we need everyone to come together to have that conversation and to find these areas. We need to be able to bring in the reductions without hurting the front line.

I have spoken about what happened in the health service budget. I have consistently said it was the greatest failure of previous Administrations. They were in power over ten or 15 years and involved several parties, but mainly Fianna Fáil with Bertie Ahern at the top for almost ten or 15 years. At that time budgets in every Department were left to go mad, as it were. There is no other way of putting it.

The health budget is as clear an example as one can get. In 1997, the health budget was about €3 billion. In 2007, it was €15 billion, which is crazy. The number of people working in the health service went from 70,000 to 140,000. I recall a debate in the House on the health service in 2006 or 2007. On the same day, the Taoiseach, the Tánaiste and a Minister were asked how many people worked in the health service. I forget which of them said what but one of them, who could have been the Taoiseach, said in the morning that 110,000 people worked in the health service. In the afternoon, the then Tánaiste, Mary Harney, said that 120,000 people worked in the health service. Later on, the then Minister for Finance, Brian Cowen, said the answer was 135,000. This shows that they did not have a clue about how many people were working in the health service. It is not that difficult to count 110,000 or 120,000 people. I know some of them are equivalent or work half or quarter time, but it is still no harm to count them. If one were the head of IBM or Intel, one would know how many worked for the company.

Thankfully, we are now getting a handle on our health service and know how many are on waiting lists, including outpatient waiting lists. One must count the problem before one can fix it. It takes guts for Ministers to announce how many people are waiting for an operation but that they are going to tackle the matter. It takes guts to admit that there are 350,000 people on the outpatient waiting list but that we will tackle it. I spoke many times while in opposition about how one must first admit one has a problem and then one can put a plan in place to fix it. That is what we are trying to do here in many areas. Great progress has been made in respect of health service reform, but it will take time. Before they entered Government, both parties always said it would take over five years to fix the health service completely, and we will fix it.

Two excellent reforms are the concept of money following the patient and increasing capacity in some of our units. The orthopaedic unit at Our Lady's Hospital in Navan is carrying out great work and is way ahead of targets set out for the year under the new concept of money following the patient. When we bring in these reforms that increase our capacity to deliver, the State must be able to benefit from the reforms. Sometimes, because of cash budgeting and a shortage of money, capacity has built up towards the end of the year in a certain unit, be it an orthopaedic or elective surgery unit, that could be used, but because of the additional cost of buying the equipment needed for the operations, things might not happen. When we introduce reforms, we need to ensure we can somehow find the extra cash to use the asset. If one has a theatre and staff who are ahead of capacity and ready to do more work, we must find the additional resources we need for that unit to do the extra work although I know this takes time. It might be a case of doing more private work through a deal with some of the private health insurance companies. I know this is on the Minister's mind. If capacity has built up in State-owned assets, we must be able to use it as best we can. All the reforms in the world will save us money in the long term and enable us to work much better, but we need imagination as we journey towards major reform.

It is interesting to note that during the dreaded years between 2001 and 2008, spending went wild. There was an increase of 185% in HSE expenditure on medicines and non-drug items, with the figure reaching €2 billion in 2009 and falling back to €1.9 billion last year. At the same time, the number of items paid for by the HSE on the community scheme increased from 13 million in 2000 to 17 million in 2010. No one would dispute that it is important that people who are sick get the necessary treatment, but it is very debatable as to whether the level of sickness in Ireland rose 185% in ten years, even when one factors in a rising population and the stresses and strains of the Celtic tiger era. I know there were significant improvements in drugs and treatments but it is not right that the cost rose by 185%. There was clear price inflation, bad deals and a lack of regulation and oversight in this sector, which this Bill will provide a legal framework for dealing with.

I stand behind the Minister and his team in any reform to put value for money for the patient and taxpayer ahead of bloated and outdated systems. As a public representative for Meath West, I am deeply aware of the price of medicines and the ability of hard-pressed families to deal with this necessary living cost, and I am sure the same can be said for all my colleagues in this House and local authority members. It is something that none of us as public representatives can escape. We know all about it through the people we represent, and it is an area we must tackle.

Greater access to the Internet and more shopping outlets and chains north and south of the Border, as the desire to shop around for value for money has grown, have led to greater public awareness of the price of medicines. In some cases, this greater awareness turns to despair and frustration as there can be large disparities in the price of certain drugs between individual suppliers in this State and, more dramatically, between this State and Northern Ireland and other parts of the EU. This is before we factor in the use of generic drugs. While we all desire to shop as locally as possible, especially at this festive time, and to support our own neighbours and maintain local employment, facts such as those I have just mentioned present a serious challenge to this mantra. Some families do not have a choice. Their disposable income is so low that they have no choice but to travel to spend their money, even though they know it is probably not good for their community. If someone is travelling to Northern Ireland to purchase cheaper medicines, he or she may decide to make many other purchases there. These are the challenges presented by the existence of two jurisdictions on this island and our membership of the EU where price comparisons with the euro are much easier.

The role of Government is to rise to and meet this challenge for the good of the consumer. Pricing and affordability, especially in these more stretched times, should not be allowed to put people's health in jeopardy. As a Deputy meeting constituents, I have plenty of evidence that this is a stark and sad choice facing many. Problems and delays in processing medical cards and GP-only cards add to a sense of stress and worry which also impacts negatively on people's physical and mental health. Today's article in the Irish Independenttouches on this area. It is only when one reads the article that one sees what the problem is. When one reads the headline, one thinks that everyone will be hit for the extra daily charge of €75, but that is not the case. It again identifies the problem we are trying to fix in Government. It is those who do not get a medical card, cannot afford health insurance or have had to let their health insurance lapse who are affected. It is the people left in the middle who must fork out for this daily charge of €75. It is not just for chemotherapy or other cancer treatment, rather it is for any treatment for which one has to go into hospital.

The charge was not always pursued. This is a sign of more mismanagement because, in times gone by, people could have afforded to pay that charge and there are probably many who can still afford to pay it but, instead, put their heads down and hide and let those who cannot afford to pay get hit the same way. The article states that hospitals are engaging debt collectors, a development I do not like and with which I must regularly deal on behalf of people. That should not be necessary because there are quite a few people who could pay their bills but will duck and dive and hide. One then ends up with people who do not have much money being pursued because everybody gets pursued, which is unfair and wrong. The same can be said for all our services. We as Deputies work to help people who fall between the red lines to access services, and we come across many people who get those services but do not necessarily need them. That is the way it is in this country, because so often people who need things cannot get them because of procedures we put in place to protect them from abuse.

The article in the Irish independentdealt with cancer sufferers undergoing the most traumatic time of their lives. Dealing with medical card procedures can lead to the build-up of considerable stress and we must solve the problems associated with them. I accept the system was centralised and that there are many staff trying to work through this under immensely tough conditions. However, there are systematic failures in how we deal with this. I know the volumes of medical and GP-only cards have increased by hundreds of thousands but we must look at this system to ensure those facing severe physical and mental threats, for example, those dealing with cancer, get priority and a decision. I know staff probably do their best and sometimes one sees priority being given, but we need a system-wide approach in order that it becomes the norm that those most in need get it. People are under enough pressure as it is. Due to the increased numbers of medical cards, the ability to apply common sense has probably been taken away and members of staff must follow rules and regulations to the letter of the law, but some people then fall between the cracks. We need to apply common sense in the same way the system worked years ago with the community welfare officer where short-term medical cards lasting three or six months could be given out. We must address this problem because people are under so much pressure.

The newspaper article also mentions volunteer drivers and how cancer sufferers require more heating in their homes. I am very familiar with the work volunteer drivers do with people suffering from various medical conditions, chiefly cancer. They bring people to their treatments every day or three or four days per week. These people, who do great work in all counties, must be thanked. Sometimes they do this work at great expense to themselves. In some cases, they do this work along with the Flexibus and community transport schemes in our towns. In my constituency, Meath Flexibus does great work along with the volunteers in co-ordinating and matching that and bringing people to some of those services. They must be thanked.

They were going to address the problems of the health service, which needs everybody to put their shoulders to the wheel with ideas, imagination, cost solutions, support and help. While medical cards are very important they are costly items from the perspective of the State and we must target them as quickly, efficiently and fairly as possible at those most in need. It happens in some Departments that material goes missing or information does not arrive in time or gets stuck in the post. We can no longer allow this to happen. We must be able to deal efficiently with matters. It is not good enough to have to ask for information a second time, particularly if the people involved are dealing with difficult circumstances.

In recent years there has been much talk of generic drugs. Consumers are becoming more aware they are a low-cost option. This will not always suit drugs companies which are naturally profit driven but, it must be said, they also re-invest some of this profit into research and development, most of which benefits the domestic Irish economy. The Bill must strike a fair balance. I listened to recent debate and comment about who the Taoiseach does and does not meet. From what I can see he is open to meeting all groups. The pharmaceutical sector employs more than 29,000 people in the country and we must recognise this. Companies spend a fortune to bring a drug to the market and we must understand this in our debates. However, in some cases we pay a disproportionate amount compared to other countries and we must correct this. Let us not forget what the companies spend to bring a drug to market. Many other drugs may not get to market and this involves great losses.

The safety of generic drugs has often been questioned but I suggest that at times this has been for negative public relations reasons. The debate has moved on from this but the suggestion still lingers among some members of the public. This is why the Bill requires that all generic medicines on the Irish market be fully licensed and compliant with the standards set out by the Irish Medicines Board. There will be cases where allowing a generic drug to be interchangeable on a prescription will not be appropriate and the Bill allows for this. I trust it will be used sparingly and for the right reasons.

The recent Trinity College Dublin Irish LongituDinal Study on Ageing, TILDA, of adults over 50 is timely and worth mentioning in this debate. It highlights how many older people take combinations of often very costly drugs to help with the fact that as we age we accumulate more health problems and even severe chronic pain. According to the TILDA report, on average those over 50 take two medications per day, those over 65 take three per day and those over 75 take four medications per day. The report also states there is much risk of duplication, inappropriate prescribing or overprescribing and we must watch this and deal with it. I have dealt with clients in my office of a much younger age who arrive in with various health problems, sometimes physical and other times mental, with a bag of prescription drugs which they have been given over the years.

More than half the annual cost of prescribing drugs is accounted for by those aged over 50 years. The TILDA report highlights that greater use of generic medicines by this sector of the population could save upwards of €150 million a year. However, it also highlights price surges in the Irish market even for generic drugs when compared to the UK. Seven of the top ten generic drugs are more expensive here than in the UK with two being almost six times more expensive. While generic drugs are a much-needed help, this situation requires careful monitoring and tough questions should be put to the industry, particularly in light of price reductions agreed in 2010 and 2011.

If we are to adopt a medium to long-term view of the health sector in Ireland, and the Government has done so, as well as dealing with the day-to-day issues, we must return again to the concept of health screening and promoting better health rather than just treating and managing illness and pain. The Minister of State, Deputy Alex White, and the Minister for Health want to tackle this through the primary care strategy and dealing with preventative medicine. People's health should be managed as close to their homes as possible. This goes back to everybody in the community getting involved and not only leaving it to the State to help out. Everyone has a duty to help out their families where they can and the State steps in where people cannot do so.

The HSE and health insurance companies could tackle long-term costs with a greater focus on health screening and early diagnosis. It costs relatively little to identify and warn somebody of their risk of type 2 diabetes or the consequences of not managing their blood pressure and to urge cheap lifestyle changes through diet and exercise patterns compared to the cost of dealing with impaired vision, amputation, heart attack or stroke for the same person in 20 or 30 years time. We see a great demonstration of this in the television programme "Operation Transformation". It is a great programme and would be of help to us all with our health. It shows how easy it is to get a hold of the issue and tackle it at an early stage. It is about advice and education. The Minister and Ministers of State at the Department have been involved in these programmes and other similar programmes.

This is clearly in the public good in terms of quality-of-life and making better use of taxpayers money, but it requires a shift in our thinking as individuals and as a society. This may sound like political aspiration but with political will it can become political reality and would change the goalposts for the health debate in the Dáil for many of our children or grandchildren who will aspire to serve here.

Earlier I referred to the greater awareness the Internet brings to the cost of medication and the choices available. However it also brings with it many dangers. A huge increase has taken place in the number of people buying medicines and medical products over the Internet and this is a serious health issue. The Oireachtas Joint Committee on Jobs, Enterprise and Innovation has begun to look into the black market and the illicit trading of goods. Part of this has involved examining the illicit trading of medicines and the purchasing medicine on the Internet. A regional meeting with the Irish Pharmacy Union raised many issues of concern. It is a major problem and we must realise counterfeit medicines are too easily available. We have much to do to protect people and warn them of the health risks involved. Many of these products are fake and no good to anybody. We have many issues to tackle and the committee hopes to bring forward solutions to a range of Ministers to address them. They include cost and small changes that could be made to the taxation code or with regard to information. However, education is the key. People must realise illicit trade is not victimless. It can have health implications but can also cost jobs. We must tackle the issue.

Catherine Murphy (Kildare North, Independent)
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This legislation has two aims. The first is to change reference pricing. We all realise we adhere to a very narrow band and if we were to reference against the other 26 EU member states it would considerably reduce the cost of drugs. The second aim is to allow for a greater use of generic drugs instead of branded drugs. I take the point made that generic drugs would not exist if it was not for the development that goes into branded drugs in the first instance but this is protected by patents for a specific period of time to cover the development.

The object of the exercise should be to free up money which can be spent in the health service, particularly in delivering primary health care or front-line services. However, exceptions should be made for some areas such as anti-epileptic drugs. There can be a very fine balance for somebody with epilepsy in remaining free of seizures and to upset this could be very problematic. In 2010 we passed legislation relating to an EU directive on the length of time people must be seizure free before they are allowed to drive. Included in this legislation are rules and regulations on changing medication. If one goes off one's medication one must be instructed not to drive for perhaps six months. If one receives different medication it could produce breakthrough seizures where the previous medication used had been keeping someone free of seizures.

It is very important that an amendment is made to provide specifically for this. Often people do not return to a consultant or see a neurologist but instead they are maintained on their medication by their GP, who may not realise he or she cannot substitute. Failure to address this aspect could cause individual problems, and serious problems could also be caused for those using machinery, or people may have falls and present at accident and emergency departments.

The other point relates to those who are on drugs that suppress seizures. Sometimes these drugs can have other side effects where it is a matter of finding the right drug and finding the right balance. There might be a 10% tolerance in finding exactly the right balance and to upset that balance will be very problematic for potentially 40,000 people who are doing well. For example, the changes that occurred for those with epilepsy in the past 30 or 40 years have been immense. It has been a good news story for so many because it has given them back their independence. It has made them feel confident again because they can have some control over their lives. Often epilepsy takes away that control at key times in a person's life, for example, when one is a teenager and has so much else going on. Recently, I was dealing with somebody where a youngster got a poor leaving certificate because she had epilepsy in that year, was going into college, was maintained on the drug and was doing well. We will spend a great deal putting that youngster through college but one wants her to go through at the best of her ability, and it is important to have her epilepsy controlled.

I cannot stress enough the importance of there being provisions in the Bill that allow for specific conditions such as epilepsy - I am sure it is not the only one. Such conditions will be the exception. Generics can contain very much the same ingredients and work well with most conditions, but conditions such as epilepsy are different. There are other countries that make exceptions when using generic drugs. Denmark, Germany, Portugal, Spain, Sweden and Switzerland all exempt epilepsy. Where there has been good reason to deviate, it makes for good health policy to do that.

One of the most expensive elements of producing drugs, which we cannot address in this legislation but which might be something that we can advance at the European Union, is packaging and the various individual sets of instructions. Clearly, there are language difficulties in the European Union. Having said that, there are significant variations in the health regimes in the various EU countries. That is costing significantly more than it needs and it is something that should be picked up at some point through the appropriate Commissioner in the European Union. It is important to point out that the variations involve a needless cost. Then there are some countries, such as Ireland and the United Kingdom, which do not have a difficulty with language, yet something that is sold in Northern Ireland could not be sold over the counter here because it has an entirely different set of instructions. One might not be able to do it for all of the countries but one might be able to provide for elements of uniformity in countries that would be similar in terms of language. This would be another way of cutting costs.

One of the big savings that was hoped for this year in the health service that did not materialise was the reduction in the cost of drugs. Some of that was to do with the basket of countries against which we price ourselves. Clearly, this legislation will provide for that for next year. It is important that we are not wasteful. Invariably, when people who are abroad on holiday and become ill or suffer from asthma, they can buy drugs over the counter which are only available on prescription here, and the variation in price is astonishing. Not only will this potentially save the State a great deal of money but it will save individuals, who are just on the margins of availing of a medical card, a great deal also. It is really important that we ensure that people retain money in their pockets if at all possible, particularly at this difficult time.

I want to raise a matter that is on the fringe of this. There is a need to have a health system that is about health, not about illness. Until we have a decent primary health care system, we will not have that. There are patients turning up very late for diagnosis and if there was a decent primary health care system we would save money and keep people healthier. Too much of what has happened is the result of the notion of measuring health in terms of the number of patients who are no longer on hospital trolleys or who are able to get procedures in the acute system. It saves a great deal if conditions, such as diabetes, are diagnosed and treated much earlier. We cannot get to a point quick enough where there is a decent primary health care system because we all will benefit from that.

There have been newspaper reports of cancer patients having to pay for their medications. That is not new. I recall a family member having to do it five or six years ago, and it took me completely by surprise. It seemed to be one of the few situations where a person turns up in a crisis, as one does when one has been diagnosed with cancer and is possibly only over a major operation, and then goes on to chemotherapy only to be handed a bill of €56, €70 or whatever. In some cases, one would question whether the person has such sums in their pocket. It seems strange. In most circumstances, that would not apply. I have never understood why it applies in the case of cancer. However, it is not a particularly new departure. I would like to hear a response as to why it happens in the first instance.

Bernard Durkan (Kildare North, Fine Gael)
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I am glad of the opportunity to speak on this Bill. It has been a long time coming. It was a commitment made by the Government parties when in opposition and was part of the programme for Government. We hope that the Bill, like all of the other Bills on which we speak in this House, will achieve its purpose, which is an important aspect of any legislation.

We all are faced with a difficult time in spending in this country. Cost cuts must take place in respect of almost every service. It is a tragic position to be in but that is the way it is. The suggestion put forward in some quarters that some cuts are painless and that others can be diverted to other areas is not the luxury that people can readily live with. In all budgetary situations, cost savings and cost cuts are measures that hurt everybody. Whether in full health or ill, there is an impact. In some cases we can do nothing about it other than to try to make the best provision we can to deal with the situation even in the face of such a budgetary situation.

My colleague, Deputy English, referred to an issue I can never understand.

In a previous incarnation I spent a long number of years in a health board where we experienced a similar situation. There were always cuts coming from July onwards and more particularly from October to Christmas. That happened because there was not an ongoing evaluation of spending, which could have been done very simply. Every budget relates to 365 days a year. One can divide the budget by 52 weeks or 12 months, but either way it comes down to the same thing - it is possible to identify where the problems arise most and, consequently, what needs to be adjusted and changed within any departmental budget at any time. It is not something that works easily, however, because every departmental section, particularly in the health services, competes to avoid cutbacks. In the current situation, however, we do not have the luxury of avoiding cuts. I therefore ask the Minister and the Minister of State, Deputy Alex White, to ensure that henceforth the budget will be evaluated monthly at least. It is possible to input all the untouchables and unmentionables, in addition to - as a former American Secretary of State for Defence put it - the known unknowns and the unknown unknowns. I do not wish to go too far down that road, however. There are issues, within the health services in particular, that we know about and therefore it is possible to introduce economies that will benefit service delivery across the board.

I also wish to mention the prescription of generic drugs. I remember having an arduous and long drawn out debate as to the merits of reducing medical costs that could be derived from prescribing generic drugs. I also remember a long input from some Members on the opposite side of the House opposing that concept. A heated debate took place and eventually in one of the biggest health boards in the country it was possible, through block procurements and generic prescribing, to bring about substantial reductions in the cost of medicines across the board. It took a great deal of agitation to achieve that but it did happen. There was regard for the areas where brand name drugs were better known or deemed to be better for patients in certain conditions, and that was even allowed for.

We also found that the brand name drugs companies were able to compete effectively with the generics in many areas despite notions to the contrary. As regards the supply of goods and services, including drugs, and the delivery of health services in general, it is in the interests of all such patients to get the best possible value for money. We must use all the means that have proved effective in the past, without putting patient safety at risk. I believe that can be done.

One must also have regard to those suffering from cancer and other serious illnesses, as Deputy Catherine Murphy said earlier. This is not a new measure; it has been there previously, but in some cases it was not enforced. There is no good time for re-introducing legislation that was not enforced in the past. There is no reason either why it should be introduced selectively, but due regard must always be had for the severity of the illness faced by patients and their vulnerability. In that way, we can ensure that we do not become a careless society instead of a caring one. It is well within the remit of the health services to adjudicate between the various categories in terms of severity and need.

I am not a follower of the concept of centralisation when it comes to determining eligibility for medical cards. It is much easier to do so at a local level and was so in the past. There will be those who may say that it was more expensive, but it was a lot more personal. People at local level knew exactly the nature of the application and very often knew well who the patients were. In those circumstances, it was much more possible to be able to introduce relevant information that would clearly indicate whether or not the patient needed a more flexible and accommodating attitude. I am not saying for one moment that the current system is inflexible or uncaring. However, by virtue of the volume of correspondence and inquiries going into that department, it will naturally follow that the same degree of personal adjudication is not available.

Another area that warrants examination - I know it will come within the ambit of this Bill - is the supply of special clothing, footwear, wheelchairs and other appliances through the health services to individual patients. Like other Members of this House, I have received complaints from people who have appliances they no longer require. For whatever reason, such appliances are not collected or recycled for re-use in the system. Since such appliances are not available for other patients, the latter must await a further allocation of scarce resources. As a cost-saving measure, it should be possible to return appliances that are no longer required by certain patients. It happens in other jurisdictions all the time, so we should be able to do it here, particularly at the present time. I hope it will happen.

I am aware that a brokerage system exists concerning the supply of goods and services to the health service. The broker, for want of a better description, supplies a variety of goods and services, sourcing those products in various ways. Many of them emanate from outside this jurisdiction. Very often, however, a loss leader is used - in the same way that supermarkets use alcohol - in order to reduce the overall cost of the package and thus get more of the product from a particularly friendly source. That practice needs to be discontinued. I have tabled parliamentary questions about it in the past but the practice has gone on for many years. It is particularly difficult to challenge when costs are being reduced generally because the argument will always be made: we're reducing costs and this is how we have done it and it has been of benefit to the Exchequer. That is not necessarily the case because there can be hidden costs as well. I know the Minister is fully aware of this matter but I would like to see it being addressed. We must try to ensure that we source as much material and products as we can from indigenous sources, notwithstanding domestic and EU competition laws. We currently have our backs to the wall in terms of costs.

A great many sacrifices have been made by a great number of people and Members should try to ensure that those providing the services, whether directly or through agencies, are also subject to the same cost-cutting and saving exercises applied to patients and everyone else.

In response to the points made by various people in comparing carers with pharmaceutical companies, drugs companies and so on, while I acknowledge it is natural to do this, one must separate the two. Everyone in this country is a caring and compassionate person. Traditionally, as a race, we have shown this over many years. No one, either in government or outside it, goes out to make life more difficult for anyone. The suggestion coming from some Members on the Opposition side in recent weeks that the Government comprises a careless and heartless group of people who are imposing punitive measures on top of a luckless and hapless public is not true. Moreover, for those who keep repeating there are always options and alternatives, the alternatives put forward by the Opposition invariably are easy options that apparently do not have an impact on any of their constituents. While they give the impression to the public that such alternatives are painless and somehow will be washed away with the next shower of rain or whatever the case may be, nothing could be further from the truth. There are no cost-cutting exercises without pain and there are no budgetary constraints that do not cause concern to a great number of people or that do not affect many people in a negative way. Any Government cannot but be fully aware of this. Moreover, no one can give Government members lectures on caring and compassion and no one should try to so do. The suggestion in some quarters that all the care and compassion is on the opposite side of the House is rubbish and they know this.

A number of speakers have mentioned the issue of promoting health awareness as being of particular direct benefit to the Exchequer. I had an experience in this respect a couple of years ago in which a friend was accidentally diagnosed - that is the only way to describe it - by a passing physician. I refer to an encounter at a crowded reception, when the person concerned was quizzed by the medic as to when the person's blood pressure has been checked. This is the difference between a highly observant person and someone who may not be so observant. The would-be patient replied it would be checked at the weekend, only to be told that would not be sufficient. The person concerned then stated it would be done at the end of the day, only to be told that would not be sufficient either. Eventually, my friend's blood pressure was checked within the hour and the results were alarming. I use this analogy to illustrate one's lack of awareness of, for instance, the tell-tale signs of blood pressure that requires monitoring or kidney failure, which are of huge importance, as well as a range of cardiovascular illnesses that must be monitored on a regular basis. There are ways and means to do so effectively at an early stage if one is alert to them. In the same way, the health issues and concerns of young people must also be addressed on a more regularised basis than has been the case in the past. In particular, efforts should be made to try to ensure that young people do not get overly concerned about, for instance, the need for weight loss or the lack of need for weight loss or whatever the case may be. However, this should be done in a balanced way and knowledge should be imparted in such a way that is supportive of whatever is required and where those concerned will feel they have support as opposed to criticism and thereby will be in a position to deal with the issues.

Other points have been made with regard to patients who suffer from cancer, for example, although the same is true of any serious illness. There used to be a tradition whereby a medical card automatically was made available for all patients who suffered from cancer. Some time ago, I heard a debate among some medical people, ironically, in which it was suggested perhaps one should wait to ascertain whether a serious form of cancer was involved. However, I do not believe this to be the issue. The impact on a patient who is greeted, for want of a better description, with the prospect of an illness of that nature is so great that one should try to give whatever support is possible and necessary in the shortest possible space of time. Moreover, the question of the cost to the patient should not arise at that stage in particular. The danger of creating further stress and concern for the patient at that time is counter-productive to all concerned and can do no good to anyone. Consequently, I ask that the discretion the health services have with regard to such matters should be used carefully to try to ensure it is acknowledged to patients who are sufferers of serious illnesses that there is a problem. It should be made known to them that it is realised they require immediate support for their particular problems, and not next week or next year and not awaiting the outcome of a debate in some other location at some time in the future. Clear time and energy must be devoted to this issue.

Earlier, I mentioned the issue of generic drugs versus drugs with brand names. In particular, I again emphasise that no one seeks to create a risk for patients. In the use of generics, it must be both possible and shown clearly that the patient being encouraged to use generics will have at least as good a product as the one that is brand-named. Unless this is the case, the entire concept will be completely undermined because patient concern will become obvious. Moreover, on the points raised with regard to epileptic sufferers, where it has been presented that a particular brand has been found to be useful and has been consistent in terms of reaction and response, it should be used. However, it should not be allowed that the company should influence such a drug's use or otherwise. The company obviously has its own reasons for making the case and it must be possible to be able to set out, purely on the basis of the ingredients, to ensure the same purpose can be served by the use of the generic products.

Ann Phelan (Carlow-Kilkenny, Labour)
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One minute remains to the Deputy.

Bernard Durkan (Kildare North, Fine Gael)
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It is amazing, when one starts off on one of these subjects that one can find lots of information one has left out and lots of other information that should be dealt with. I acknowledge the Minister is well aware of these issues, as we have discussed matters of this nature in the past but I will state simply that this legislation is highly beneficial from a cost perspective. Moreover, it could be equally beneficial to patients because it may help everyone to focus more clearly on the degree of patients' illnesses or complaints and on the need for everyone else to keep down the costs. While I will not go over the points made by other speakers, suffice it to say I cannot understand how the number of personnel in the health services almost doubled, or certainly increased by one third, in the short space of time between the abolition of the health boards and the introduction of the HSE. This raises many questions.

Alex White (Dublin South, Labour)
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I thank Members for their important contribution to the debate on this Bill. I have taken careful note of all the insightful observations made in the course of the Second Stage debate. Some Deputies have indicated they intend to table amendments on Committee Stage. I assure them that I will carefully consider all such proposals and will respond to them in detail on Committee Stage.

However, I wish to refer briefly to some of the issues raised by Deputies during the Second Stage debate. A number of Members referred to the complexity of the legislation. While I accept this is complex legislation, I assure Members that this level of complexity is necessary to ensure the Bill provides a robust legislative basis to introduce generic substitution and reference pricing in Ireland.

Sometimes legislation has an extraordinary level of complexity and difficulty, with a lack of accessibility, but it is important that the legislation can withstand scrutiny or challenge. It must provide for as many eventualities as occur at this point, which necessitates complexity.

Deputy Kelleher asked if regulations will be made setting out the mechanism by which reference prices will be set. I advise that section 24(3) of the Bill sets out the process the HSE must pursue when setting a reference price for or reviewing a reference price for a group of interchangeable medicines. Therefore, there is no necessity to provide for regulations in the setting of reference prices. With regard to what basket of countries will be used as a reference by the HSE when setting reference prices, the Bill provides that the HSE shall have regard to the equivalent prices in all other member states in which a relevant product is marketed.

I note that some Deputies are concerned that overly emphasising the principle that prices will be set to protect and not jeopardise continuity of supply could result in prices not being sufficiently reduced. As I mentioned earlier, section 24(3) of the Bill sets out the process the HSE must pursue when setting a reference price or reviewing a reference price for a group of interchangeable medicines. Whereas the ability of the supplier to meet patient demand is a key criterion the HSE must have regard to when setting reference prices, particularly in a small market like Ireland, there are other criteria which the HSE must also take into consideration. These include the value for money afforded by the relevant product, the equivalent prices in all other member states where the product is marketed, the prices of therapeutically similar listed items and the resources available to the HSE. It is important to balance achieving best value for money for taxpayers with assuring continuity of supply for critical medical products. I am determined that this be done in the most cost effective and efficient manner as possible. Consequently, a core objective of this Bill is to achieve value for money while maintaining and improving levels of service.

A number of Deputies referred to the necessity to introduce measures to reduce the growth in volume of drugs prescribed under the community drug schemes. It is clear that the current rate of growth in the volume of items dispensed under the community drug schemes is unsustainable and needs to be addressed. In this context, it is essential that we control both the price and volume of medicines dispensed under the community drug schemes. There is substantial international evidence demonstrating the scope for improving the quality and safety of prescribing and dispensing practices and behaviours. In this regard, the HSE has established a clinician-led medicines management programme, the aim of which is to ensure that all people have access to the essential medicines they need, that the medicines are safe and effective and that they are prescribed and used rationally. An important task of the programme will be the focus on cost-effective prescribing and the reduction in drug expenditure through more rational prescribing. Proposed initiatives in this regard will include the identification of preferred medicines or medicines of first choice in high cost areas such as proton pump inhibitors and statins, as these two groups account for approximately 20% of all expenditure under the general medical services, GMS, scheme. Generic prescribing will also be promoted as it is generally accepted as the most cost-effective prescribing.

Another measure being considered is amending the misuse of drugs regulations relating to benzodiazepines and z drugs to ensure that these substances are used in an appropriate manner. Benzodiazepines, as a group of medicines, are commonly used to treat anxiety, sleep disturbances and insomnia and the so-called z drugs are used to treat insomnia. There is increasing evidence of dependence and inappropriate use of these medicines in Ireland. This problem is not unique to Ireland as statistics indicate overuse of these medicines is an international issue, with Europe having the highest average consumption of benzodiazepines internationally.

I will now turn to the crucial issue of safety of generic medicines. First, it is important that people are aware that generic medicines marketed in Ireland must be licensed and meet the requirements set down by the Irish Medicines Board in the same manner as originator medicines. Under the Bill, the Irish Medicines Board has responsibility for establishing and maintaining a list of interchangeable medicines, which will include both originator and generic medicines. In deciding whether to add a group of medicinal products to the list, the Irish Medicines Board must be satisfied that each medicinal product which falls within the group has the same qualitative and quantitative composition in each of its active substances as each of the other medicinal products which fall within the group; is in the same pharmaceutical form as, or in a pharmaceutical form that is appropriate for substitution for, each of the other products in the group; and has the same route of administration as each of the other medicinal products which fall within the group. In addition, the Bill provides that the board is not permitted to add a group of medicinal products to the list of interchangeable medicinal products where, for example, any of the medicinal products cannot be safely substituted for any one or more of the other medicinal products in the group.

To enhance further the patient safety aspect of generic substitution, section 13 of the Bill allows a prescriber to indicate on a prescription that a branded interchangeable medicinal product should, for clinical reasons, not be substituted. A number of Deputies referred to the concerns raised by the organisation Brainwave with regard to generic substitution of epilepsy drugs. I am satisfied that the provisions in the Bill address concerns people may have with the safety of generic substitution, including those concerns raised by Brainwave. We are proposing to provide for a power of substitution, subject to a very strict regime, and there is no provision within the Bill constituting a direct decision to substitute a product. There is a provision for a power to be exercised by the Irish Medicines Board to introduce a substitution, which is an important distinction to be recognised by colleagues, particularly in the context of legitimate concerns about particular areas, such as people living with epilepsy. We will have the opportunity to tease out more detail on Committee Stage if colleagues bring amendments. The Bill does not in itself bring about any substitution but rather provides a legal framework within which the Irish Medicines Board may introduce substitution. Any decision would be subject to a very rigorous regime. I repeat the key message that must be communicated by all associated with the implementation of generic substitution: generic medicines must meet the same quality and safety standards as originator medicines and have the same benefits and risks as originator medicines.

I wish to reiterate my commitment and the commitment of this Government to maintain and improve access to medicines for Irish patients. As I have stated, this needs to be done in the most cost-effective and efficient manner. The core objective of this Bill is to achieve value for money while maintaining and improving levels of service. By cost-effective I mean paying the most appropriate price for a particular product and there is no longer any justification, if there ever was, for paying a premium for a particular brand of medicine when an equivalent medicine, as assessed by the Irish Medicines Board, can be supplied at a much more competitive price.

It is important to emphasise that patients will continue to be able to obtain their necessary medications from their community pharmacist and that patients and taxpayers will benefit from paying less for these medications. Moreover, this Bill also provides that if in the opinion of a prescriber there is a clinical reason why a medicine should not be substituted, the patient shall receive the prescribed medicine at no extra cost.

The second core element of this Bill is the placing of the current HSE reimbursement list on a statutory footing. This is a timely provision and shall support the introduction of a system of reference pricing and generic substitution. The general criteria set out in the Bill and the regulations to come from it will assist the HSE in making timely decisions regarding reimbursement, provide clarity for the pharmaceutical industry on the application process and ensure the HSE achieves best value in the provision of medicines under the GMS and community drug schemes. I thank the House and look forward to the Bill being further considered on Committee Stage.