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Ireland's High-Tech Drugs scheme faces funding threat

03 November 2015 Eoin Ryan

Last week, the Irish Pharmaceutical Healthcare Association (IPHA), the industry body representing 47 research-based pharmaceutical companies operating in Ireland, warned the Irish government that it is "hard to see where more savings can be found" amidst ongoing price-reduction negotiations covering the supply of innovative medicines. Both sides have entered into substantive discussions to replace an existing deal which expires on the 31 October 2015. The IPHA is reportedly having some success persuading the government to support new measures for earlier access and faster reimbursement of innovative oncology medicines. However, despite this progress, the IPHA may struggle to protect the High-Tech Drugs (HTD) scheme from government efforts to impose a possible funding cap.

HTD scheme comes under threat
Total funding for supplying and dispensing HTD drugs reached EUR485 million in 2014, according to a September 2015 report by the Comptroller and Auditor General (C&AG). This comprised EUR468 million in direct payments to 18 pharmaceutical companies, with community pharmacies receiving a further EUR17 million in monthly patient care fees for overseeing treatment. Since 2009 the HTD scheme has increased by 59%. Payments are administered under the primary care reimbursement service (PCRS) and, on that basis, the HTD initiative is the only PCRS scheme to have surged in expenditure to such a dramatic extent during the period. This makes it a prime target in the government's bid to control pharmaceutical expenditure going forward.

Product types affected
The main types of medicines available under the HTD initiative comprise anti-rejection drugs for organ transplant patients, high-cost cancer medicines used in conjunction with chemotherapy, hormonal therapy, haematology agents, drugs for treating cystic fibrosis as well as arthritis drugs. Another recent example is Cosentyx (secukinumab; Novartis, Switzerland) for the treatment of moderate to severe plaque psoriasis. Novartis submitted a pricing plan under the HTD drug scheme which pitched Cosentyx at a price of between EUR17,030 and EUR19,487 per patient per year, only for the National Centre for Pharmacoeconomics (NCPE) to reject Cosentyx for reimbursement in September.

Financial incentives considered
A 2015 statement by the HSE signaled that "in future, the expectation is that new medicines will in the main be in the High Tech area". However in order to reduce the state's pharmaceutical bill, it is likely that this government or a subsequent administration will put in place a financial incentive mechanism whereby pharmacists are provided with rewards to supply generic versions of HTD products. Separately, the government is understood to be assessing the potential for the introduction of new legislation that would specifically include "high-tech molecules" (i.e. biosimilars) on the HTD scheme.

The next price-reduction agreement between the pharmaceutical industry and health services is projected to achieve significant savings for the Irish state over the period 2015-2018. It will therefore be of considerable concern to the pharmaceutical and biotechnology sectors that funding for the HTD scheme is unlikely to be increased in the coming years and may even be capped, especially since newer medicines are often launched under the HTD scheme.

Eóin Ryan is a senior life sciences analyst at the IHS
Posted 3 November 2015

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