The Irish government and the country's drugmakers have agreed interim drug price cuts which, they say, will deliver savings totalling 20 million euros in a full year and allow new products to be supplied through state drug schemes.

The new agreement extends the recently-expired deal between Ireland's Health Service Executive (HSE) and the Irish Pharmaceutical Healthcare Association (IPHA), under which, when a generic equivalent of an off-patent drug came onto the market, the price of the original product was reduced by 20% immediately and by a further 15% after 22 months.

Health Minister James Reilly has accepted the IPHA's proposal that, when such a generic equivalent comes to market, the price of the original product will be reduced immediately by 30% instead of 20%. In the case of products that have already been reduced 20% under the IPHA/HSE agreement but have not yet had the 15% reduction, the industry association has agreed to provide an immediate reduction of 10%, rather than having to wait for the expiry of the 22-month period provided for under the expired deal.

The price cuts are expected to deliver sayings of around 10 million euros in 2012, rising to as much as 20 million euros in a full year. And, as part of the agreement, the HSE says it will give its approval to drugs "which, in the normal course of events, would have been approved for reimbursement."

The IPHA has welcomed Dr Reilly's acceptance of its proposals which will, it says, deliver savings in the immediate short term and also allow for the full and proper implementation of the existing supply agreement by ensuring that new medicines can be reimbursed.

This will also now make sure that full negotiations on a new agreement between the state and IPHA can recommence, the group adds.

"This is a good day for Irish patients who will now have broad universal access to new innovative therapies restored," said IPHA president, David Gallagher. 

"A key strength of the Irish healthcare system over many decades has been early access to the full range of modern, therapeutically-advanced medicines to all patients, regardless of income, and we are delighted to have been able to work with the Department of Health to ensure that this access can be restored," he added.

Speaking on the RTE Radio News at One programme, Mr Gallagher had pointed out that while there are currently eight or 10 new medicines which have been proven to be cost-effective and which ordinarily would have been added to the reimbursement scheme, no additions to the scheme have been made since last September.

According to local reports, these products include AstraZeneca's antiplatelet drug Brilique (ticagrelor), Novartis' multiple sclerosis treatment Gilenya (fingolimod) and Lundbeck's antipsychotic Sycrest (asenapine). Delayed budget decisions and other problems are also affecting access to other products including Janssen Cilag's Incivo (telaprevir) and Merck & Co's Victrelis (boceprevir), both for hepatitis C, and Boehringer Ingelheim's bloodthinner Pradaxa (dabigatran).

The Department of Health comments that Dr Reilly has accepted the industry's offer of interim price cuts "in advance of further discussions with IPHA which are expected to deliver more significant savings to the Irish patient and taxpayer."