Savings by Irish GPs made under the Indicative Drug Target Scheme (IDTS), which was introduced on January 1, 1993, as an incentive to encourage rational and economic prescribing, have dwindled considerably in recent years, according to a new report from Ireland’s Office of the Comptroller and Auditor General.

In 2000, 460 GPs, or 26.5% of those participating in the Scheme, had

achieved savings, and these totaled just over 3.5 million euros. However, by 2005, only 53 (2.7%) of GPs in the Scheme were achieving savings, and these had fallen to a total of 670,462 euros, the report finds.

The IDTS was set up to provide GPs with target budgets, based on the make-up of their patent panels, with the savings derived from achieving these targets shared between the GPs and the Health Boards, to be spent on improvements to practices and services.

Excess costs

The report also notes that, in the Scheme’s first four years, 27% of GPs breached its savings limits, resulting in excess costs of 54.6 million euros. Moreover, only 5% of the 1,395 GPs who took part in the scheme continuously during its first four years managed to achieve savings in each year.

The scheme has now been suspended pending the outcome of a review being conducted with the Irish Medical Association, and this is now overdue, says the Comptroller and Auditor General’s report.

However, it also points out that the price cut programme recently agreed between the government and industry is expected to achieve savings of over 250 million euros by 2010. The price reductions have been agreed as part of the renegotiation of the Irish Pharmaceutical Healthcare Association (IPHA) Agreement with the Health Services Executive (HSE) for the pricing and supply of drugs to the state.

Generic subs rejected

During negotiations for the new Agreement, which took effect on September 1, 2006, the possibility of introducing a system of generic substitution was considered, but was rejected in favour of overall price reductions of 35% for substitutable off-patent medicines, to be implemented in two phases over the lifetime of the new Agreement (2006-2010).

The first phase was implemented on March 1 this year, when the prices of nearly 600 different packs of medicines were reduced by up to 20%. Their prices are due to be reduced a further 15% on January 1, 2009, with a review of pricing levels to take place in 2008 and again in 2010.

“These new arrangements will provide savings for the State whilst ensuring that patients, regardless of income, can continue to have access to the full range of medicines in a timely manner,” says the IPHA.

Also under the new Agreement, the prices of new medicines coming onto

the Irish market will now be based on a broader average of nine other

European Union member states, instead of five as in the past, and includes lower-priced countries such as Spain, Austria and Belgium.

The Comptroller and Auditor General’s report also welcomes the fact that the Agreement allows, for the first time, the reimbursement of new drugs coming onto the Irish market to be informed by pharmacoeconomic assessment. “This will enable new therapies to be assessed on a more cost-effective basis, so as to maximise the benefit to patients and the Exchequer, consistent with patient safety and well-being,” it says.

The Department of Health and Children (DoHC) estimates that, by 2010, the price cuts included in the Agreement, both in community pharmacy and in the costs of drugs to hospitals, will be in the order of 300 million euros.