Ireland’s new legislation to establish systems of reference pricing and generic substitution takes effect this week, and the first reference prices, for atorvastatin product, will be implemented in November, Ministers have said.

The Health (Pricing and Supply of Medical Goods) Act 2013 will provide the Irish Medicines Board (IMB) and the Health Service Executive (HSE) "with a robust statutory framework for the introduction of generic substitution and reference pricing on a phased basis," said the Health Minister, Dr James Reilly.

"This legislation will provide much greater access to generic medicines in Ireland and will reduce medicine costs for patients and the state. Generic substitution will be introduced incrementally, with the IMB prioritising those medicines which will achieve the greatest savings," he noted.

The IMB will review an initial 20 active substances, equating to around 1,500 individual medicines, added Alex White, the Minister of State with responsibility for Primary Care at the Department of Health. 

It is expected that the first List of Interchangeable Medicines, containing groups of atorvastatin products, will be published in mid-August, and the IMB will publish subsequent lists for other groups of medicines on an ongoing basis, said Mr White.

'The HSE will then set a reference price of these groups with a view to having the first reference prices implemented by November. From the end of the year onwards, hundreds of thousands of prescriptions will be subject to generic substitution, which will offer choice and reduced prices to patients," he added.

The new law requires the IMB, once it decides to add a group of products to the List of Interchangeable Medicines, to then begin a process of consultation with the marketing authorisation holder (MAH) for each product in the group, and MAHs will have 28 days to make a written submission to the Board.

The IMB will then have 14 days to consider the MAHs' submissions and, if it decides not to amend its proposal, to publish the List of Interchangeable Medicines.  The HSE may then propose a reference price for the interchangeable group, and each MAH within the group will have 28 days to make written representations concerning this proposal. 

The HSE will then consider these representations and, if it decides to implement the reference price, it will give 28 days notice to community pharmacy contractors prior to its implementation.

Meantime, industry group the Irish Pharmaceutical Healthcare Association (IPHA) has published a new study which shows that the prices in Ireland of medicines made by its member companies are now at the average of a basket of nine European countries. 

The study, conducted by IMS Healthcare, shows that for the 200 most frequently-prescribed patented medicines - which amount to over 99% of the patented segment of the market - Irish prices are in line with those in Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Spain and the UK.

The report examines just the ex-factory price of the medicine - it does not include wholesaler or pharmacy mark-ups. 

IMS also looked at generics, and concluded that the prices of these products are significantly higher in Ireland than in any of the reference countries, at 50% above the average in the nine comparator markets.

With the passage of the new legislation, and the fact that the IMS study shows that prices of generics in Ireland are "out of line, there is potential for the state to recoup annualised savings of 50-70 million euros," commented Orlaith Brennan, director of commercial affairs at the IPHA.