IN THIS ISSUE

A key feature of the IPHA/HSE Agreementhas been a series of price cuts by IPHAmember companies over a 24 monthperiod, including a further round of cutson the 1st January 2009. These concessionswere onerous for the industry but theywere offered on the basis that theAgreement would provide a stableframework for the following four years.

At the time of committing to theAgreement it was made clear by theGovernment that it was “the first in aseries of negotiations....to examine allaspects of the drug delivery system, fromthe manufacturer to the patient, in orderto achieve greater value for money fromthe operation of the drugs schemes,consistent with patient safety andcontinuity of supply.’’ (Continued)

matterMEDICINES

March 2009

Generic SubstitutionRevised Codes of Practice

Global Health Progress Reduced Price of Medicinesand more...

IPHA President calls time on thesuggestion that any further savings canbe gleaned from industrySpeaking at the Annual Meeting of theIrish Pharmaceutical Healthcare Association(IPHA), IPHA President Dr Gerald Farrellacknowledged that it has been thewillingness of successive Irish Governmentsto take the long-term view and to workcreatively with the pharmaceuticalindustry, which has delivered so much forIrish patients and the Irish economy overthe past forty years.

However, he added, the focus must remainon the achievement of long-termobjectives and the State must not letimmediate concerns, no matter howpressing, lead to the adoption of initiativeswhich seem attractive, but which couldundermine our chances of achievingsuccess in the long-term.

He emphasised that the internationalresearch-based pharmaceutical industrycan only source the large sums needed to

invest in research and development, if itcan be reasonably certain, that where itachieves success, it will ultimately berewarded for its endeavours.

“It must be recognised that the medicinesof today have to pay for the medicines oftomorrow and that if the State wants tocapture the benefits of innovation theyhave to care for it and nurture it.Notwithstanding, we recognise that newtherapies put pressure on State budgets,particularly in these strained financial timesand we do understand the need foroptimum efficiency and cost effectivenessin the State’s expenditure on medicines.That’s why, just over two years ago, theIPHA committed to an Agreement with theHealth Service Executive which is well onthe way to delivering savings in the orderof €300 million” stated Dr Farrell.

Mr Ross Hattaway(HSE), Dr GeraldFarrell (IPHAPresident), Mr BryanDobson (Moderator),Ms Anne Nolan (IPHAChief Executive), MrPat O'Mahony (IMB)and Mr Seamus Feely(Irish PharmacyUnion) at the IPHAAnnual Meeting.

Speaking at the IPHA Annual Meeting recently, IMB Chief Executive, Mr PatO’Mahony stated that it is important for healthcare professionals to highlight thedangers of purchasing medicines via the internet.

According to figures presented by Mr O’Mahony there are approximately 2,500illegally imported medicines seized and confiscated per annum. 90% of these areby individuals for personal use. While 50 to 60% of the imported medicines seizedare counterfeit.

He added that while the parallel trading of medicines is legal and legitimate it isone route through which counterfeit medicines could potentially come into theRepublic of Ireland.

The industry continuously encourages patients to purchase prescription medicinesthrough authorised distribution channels only. The research based pharmaceuticalindustry spends billions of euro in developing reliable, safe life-saving and life-enhancing medicines. The system that enables these medicines to reach patients,through the collaboration of regulators, pharmacists, healthcare professionals andthe manufacturers of medicines, has protected Irish consumers very successfully.

Warning about purchasingmedicines via the internet

New treatments will open up greater possibilities forpatients to recover from ill health (cover story continued)therefore a matter of disappointment andfrustration to my members that Statenegotiations with the other elements of thesupply chain have utterly failed to produce asingle euro of additional savings. So anysuggestion or expectation that there arefurther savings to be gleaned from mymembers or indeed any ambiguity on thispoint is unacceptable and will send a verynegative signal to those in our corporateboardrooms who make decisions aboutcontinuing investments in Ireland” added DrFarrell.

Pharmaceutical innovation is on the verge ofa new era of personalised and tailoredmedicine that holds great promise forpatients and the healthcare system. Thatpromise, however, is not a given and dependson sustained, substantial investment in R&D,a supportive public policy environment andan appropriate regulatory framework.

New treatments will open up greatpossibilities for patients to recover from illhealth, faster and more fully, turning forexample, previously fatal illnesses intomanageable chronic conditions. They alsooffer cost savings and improve efficiency,delivering financial benefits to the wholehealthcare system, through optimalmanagement and reduction of treatmenttimes and hospitalisation.

“Yes, we face challenges, but theencouragement of innovation in medicines,in how we deliver medicines and in how wedeliver healthcare is central to theimprovement of our healthcare system, ofpatient health and of our country’s economicdevelopment.” concluded Dr Farrell.

President, Dr Gerald Farrell speaking at theIPHA Annual Meeting.

Mr Pat O'Mahony, Chief Executiveof the Irish Medicines Board.

affected were many leading, longestablished, post patent medicines. Thesecond phase of price reductions hasresulted in the price of these medicinesfalling by a further 15%1.

A further 45 medicines also began theprocess by reducing their prices by 20%2. Itis planned that the price of these medicineswill fall by a further 15% on the 1stNovember 2010.

The reductions form part of the innovativearrangements for the supply of medicines tothe health services and benefit bothpatients and the State by providing savingson many leading, long established, postpatent medicines to ensure that all patients,regardless of income, can continue to haveaccess to the full range of innovativemedicines in a timely manner.

It has been estimated that savings of theorder of €300 million across the GMS andcommunity drugs schemes, and in the costof medicines to hospitals will be achievedover the four years of the agreement whichruns until 20103.

Speaking at the time IPHA President DrGerald Farrell said: “These latest pricereductions demonstrate the pharmaceuticalindustry’s commitment to Irish patients. Wecontinue to hope that the substantialsavings achieved through our action willallow for greater investment by the HSE intothe most advanced, innovative, cost effectivemedicines, ultimately helping Irish peoplelive longer, healthier, more active lives.”

1 HSE Corporate Pharmaceutical Unit 2 HSE Corporate Pharmaceutical Unit 3 Estimate from Department of Health and

Children Press Release 6th July 2006

Comprehensive handbook on Ireland’spharmaceutical industry available now

IPHA has compiled the first edition of a Stakeholder Handbook with aview to providing assistance to interested parties with enquiries relatingto the international research-based pharmaceutical industry in Ireland.

The Handbook includes listings of key contacts within IPHA, IPHAmember companies, Government, health and enterprise agencies,regulatory bodies, professional healthcare and enterprise organisations,voluntary healthcare organisations,patient organisations, internationalpharmaceutical associations and otherglobal healthcare groups. In addition tokey contacts within each of the listedorganisations the Handbook alsoprovides key facts and figuresrelating to the Irish pharmaceuticaland healthcare sectors.

If you would like to order a copyof the Stakeholder Handbookplease contactcommunications@ipha.ie or(+353 1) 660 3350.

Through the continued implementation ofan agreement between the IPHA and theHealth Service Executive (HSE) the price ofmany leading medicines has been reduced,in two phases, by 35% over the last 22months.

On the 1st March 2007 patients saw areduction of up to 20% in the price ofnearly 600 different packs of medicines onthe Irish market. Amongst the packs

Price of 700 medicines reducedagain, by 15%, on 1st January

Industry fully appreciates the role which generic medicinesplay in the provision of comprehensive healthcare to today’spatients and accepts that making the full range of newmedicines available to patients, poses significant challengesfor the State’s finances.

Therefore to create headroom in the budget for newmedicines the IPHA agreed with the HSE to reduce the price ofpatent expired medicines in two stages by 35% in 2006. Thisprice concession together with other aspects of the IPHA/HSEAgreement is expected to save the State nearly €300 millionover its four year term.

However, in recent months there have been calls for theimplementation of generic substitution as a means to makesignificant savings on the State medicines bill. It is importantto know the downsides of this proposal.

A report published by the National Centre forPharmacoeconomics in 2007 stated that: “The new agreementbetween the Irish Pharmaceutical Healthcare Association(IPHA) and the Health Services Executive (HSE) which came

into effect on the 1st September 2006has significant implications for genericprescribing. The agreement will resultin a two stepped 35% reduction in thewholesale price of off patent medicinesresulting in savings which may exceedthose anticipated with strategies suchas generic substitution.”

A recent article in the Irish MedicalJournal on Drug Expenditure inIreland 1997 – 20071 made the pointthat the 35% price reductions in theIPHA/HSE Agreement “obviates theneed for strategies such as pharmacistlead generic substitution, which couldhave been difficult to implement inpractice.”

Not only is substitution not cost effective and impractical itwould be a regressive step in Irish healthcare. Currently wehave a single tier system of access to medicines, whereby allpatients, regardless of income have access to the medicineswhich their doctor believes is best suited to their needs. Theintroduction of generic substitution could lead to a two-tierhealthcare system where those who could afford it would getthe medicine of the doctors’ choice whereas poorer patientsmight not. It would also end the separation between the roleof prescribing and that of dispensing, which has served healthprofessionals and patients so well for many years. ThePharmacy Review Group itself concluded in 2003, “that thereshould be no beneficial ownership or business interest of anykind between dispensing and prescribing.”

Therefore, generic substitution or any interference in thedoctor’s right to choose the medicine, or indeed any otherconflicts and contradictions in the medicines supply chain,should be vigorously opposed.

1 M Barry, D Molloy, C Usher, L Tilson, Irish Medical Journal,November/December 2008 Volume 101 Number 10

Generic substitution is notcost effective and may lead toa two-tier healthcare system

Did you know?• The last decade has seen an unprecedented increase in health expenditure following a period of cutbacks and stagnation in

the 1980’s and the early 1990’s. Public expenditure on health will have almost quadrupled in the period 1998 to 2009.

• State expenditure on medicines has increased in tandem with the increase in public expenditure on healthcare. Medicinesaccount for just 14.7 % of total healthcare expenditure – a small but vital component.

• Irish consumption of medicines remains amongst the lowest in Western Europe. Growth in the Irish market has to beviewed against this background and against the ever-increasing sums being invested to improve public health.

• Today, approximately 25% of the Irish population have a chronic disease accounting for 78% of the country’s healthcarespending.

Revised Codes of Practice come into force

but which also pose a strong financialchallenge to the State.

More than ever before the Governmentneeds to focus on innovation to enhanceoutcomes rather than just measuring activityoutputs over cost inputs, and healthproviders need to be focused on partnering,to achieve sustained improvements inpatients’ health.

Primary medical care should becharacterised by its ease of access andsensitivity. To achieve this objective,everyone involved in healthcare should worktogether to identify how best to deliverhealthcare to meet the needs of patients.

The central ideas of seeking appropriatecare at the appropriate level, encouragingpatients to look after their own healththrough self-care and appropriate self-medication and of prioritising earlyintervention are the fundamentals requiredfor the development of primary medical carein the community.

To learn about the Association’s concreteproposals for the implementation of thesecentral ideas read the full submission atwww.ipha.ie.

In a recent submission on Primary MedicalCare in the Community to the OireachtasCommittee on Health and Children theIPHA stated that “a properly structuredsystem of care with patients able to accesscare at the lowest appropriate level is nowmore important than ever if proper use ofscarce resources is to be made.”

IPHA is active in ensuring the highestpossible standards of advertising andpromotion of both prescription and non-prescription or consumer healthcaremedicines to both healthcare professionalsand the general public alike. It does so byadministering a number of Codes ofPractice, in particular, the Code of MarketingPractice for the Pharmaceutical Industryand the Code of Advertising Standards forConsumer Healthcare Industry.

These Codes have been recently updatedfollowing the revision of the MedicinalProducts (Control of Advertising)Regulations 2007 and the revised Code ofPractice introduced across Europe by theEuropean Federation of PharmaceuticalIndustries and Associations (EFPIA).

The key changes in the new Codes are:

1. The introduction of detailed provisionswhere the industry wishes to engage ahealthcare professionals to carry outsome consultancy services (Clause 17) orwhere the industry wishes to conduct anon-interventional study (Clause 19);

Healthcare in Ireland is going through aperiod of significant change – anincreasing and ageing population, evolvinghealth structures, greater private sectorinvolvement in the health arena, everincreasing public expectations of theservice and the development of newtreatments which offer hope to patients

Industry view on primarymedical care in the community

2. A ban on the use of “venues renownedfor their entertainment or leisurefacilities or [venues that] areextravagant” (Clause 16.3). This is toreinforce the point that it should alwaysbe the programme for meetings thatattracts the delegates and / or not theassociated venue and hospitality;

The industry recognises the importance ofpatient organisations in representing,meeting the information needs of andoffering support to people living with ill-health and the fact that pharmaceuticalcompanies and patient groups haveimportant areas of common interest. As aresult IPHA has also incorporated in theCode guidelines for pharmaceuticalcompanies on working with patientorganisations in order to ensure thatthese relationships are positive,constructive, mutually beneficial andethical. Areas covered include theprovision of funding, information and thedisclosure of such funding bypharmaceutical companies.

These changes are designed to bringgreater openness and clarity to theactivities of pharmaceutical companies. Byso doing, the changes can help to ensurethat the vital relationship betweenindustry and healthcare professionals ismaintained and the contribution of theindustry to the lifelong education ofhealthcare professionals and enhancedpatient and consumer care is betterunderstood.

The Vista Primary Care Campus, which includes this pharmacy, is a good example of the servicesneeded in Ireland.

IPHA joins Global Health Progress

Irish Pharmaceutical Healthcare Association

Content:Anne Nolan, Brian Murphy, Ronan Collins, Michelle Kurtz, Sabine LouëtPublisher: © Irish Pharmaceutical Healthcare Association LtdDesign and production: Slick Fish Design, Dublin

Franklin House140 Pembroke RoadDublin 4Ireland Tel: (353 1) 660 3350 Fax: (353 1) 668 6672 E-mail: info@ipha.ie

www.ipha.iewww.medicines.iewww.feelbetter.ie

Medicines Matter is published by the Irish Pharmaceutical Healthcare Association (IPHA) which representsthe international research-based pharmaceutical industry in Ireland. Its member companies include bothmanufacturers of prescription medicines and non-prescription or consumer health care medicines.

medicines, vaccines, diagnostics,equipment, other material and labour inthe same period have been valued at $9.2billion, of which $2.4 billion was in 2007alone. The industry’s contribution issubstantial and sustained and clearlyreflects not only product contributions butalso education and other actions for thelong term.

For more information on Global HealthProgress please visitwww.globalhealthprogress.com while formore information on the 150-plus healthpartnership programmes the industry isinvolved in around the world visitwww.ifpma.org/healthpartnerships.

IPHA recently joined Global HealthProgress, an initiative sponsored by theglobal pharmaceutical industry to bringresearch-based pharmaceuticalcompanies, global health leaders andpolicymakers together to build on currentpartnerships to improve health in thedeveloping world.

Dr Gerald Farrell, IPHA President statedthat “the healthcare crisis in thedeveloping world is of a truly frighteningmagnitude and everyone, including thepharmaceutical industry, has aresponsibility to seek to enhance itscontribution to tackling the crisis. Servingas a meeting point for the industry and itspartners, Global Health Progress hasalready facilitated interaction between theprivate sector, NGOs and Governments inother countries to share research and bestpractices; raise awareness of global healthchallenges; and build partnerships to

improve global health. It isnow hoped that, throughour membership of thisinitiative, it will serve thosein the Irish aid anddevelopment community.”

Recently published figures,by the InternationalFederation ofPharmaceuticalManufacturers &Associations (IFPMA), showthat since the inception ofthe UN MillenniumDevelopment Goals in 2000,the research-basedpharmaceutical industry hasmade available enoughhealth assistance to help1.75 billion people in lowand middle incomecountries. Donations of

Established in 1999, the Bristol-Myers SquibbSECURE THE FUTURE® programme has supportedmore than 200 projects focused on communityeducation and outreach and medical care andresearch. It has also expanded its reach from 5 to 12countries and evolved from a broad-based grantmaking initiative to focus on community basedtreatment support, paediatric AIDS and buildingNGO management and leadership capacity. To learnmore about this and other programmes visitwww.globalhealthprogress.org.