Medicines in Ireland cost at least three times more than in the UK, and these high levels “cannot be justified,” the head of the European Commission’s bailout “troika” mission to Ireland has told government leaders there.

Nor is the situation on drug prices sustainable, Istvan Szekeley, director of economic and financial affairs at the Commission, warned Irish legislators, as the Commission and officials of the two other troika members – the International Monetary Fund (IMF) and the European Central Bank – held talks in Dublin to discuss Ireland’s financial situation as it prepares to leave the bailout on December 15.

The Irish Department of Health plans to make savings on its budget totalling 666 million euros next year, of which 113 million euros-worth is projected to come from a review of the “probity” of the medical card system, revealed in last month’s 2014 Budget announcement. However, the Irish Examiner newspaper quotes sources within the troika as stating that there are still substantial savings to be made through increased use of generic drugs, in terms of price and volume reduction, and that these would be “much less painful” than the withdrawal of medical cards.

Meantime, on November 1, Ireland began its phased introduction of reference pricing, introduced under the Health (Pricing and Supply of Medical Goods) Act 2013. 

The first product to receive a reference price is the cholesterol-lowerer atorvastatin, and as a result the Health Service Executive (HSE) is now paying 70% less for these products than in May 2013, said Health Minister James Reilly.

“Patients will save on the cost of their medication and taxpayers will benefit from the reduced prices paid by the HSE,” he added.

The next reference price is currently being set, for the proton pump inhibitor esomeprazole, and Ministers expect prices for this group of products to be in place by the beginning of December.

November 1 also marked the anniversary of the 2012 price reduction and supply deal agreed between the government and the Irish Pharmaceutical Healthcare Association (IPHA), and this has already delivered savings of 68.5 million euros in the first six months of 2013, says the Association.

The introduction of reference pricing should lead to further reductions in generic drug prices, “which currently are amongst the highest in Europe, at 50% above the EU average and up to three times the UK price,” said IPHA chief executive Anne Nolan.