The Health Service Executive (“HSE”) has statutory responsibility for medicine pricing and reimbursement decisions in Ireland pursuant to the Health (Pricing and Supply of Medical Goods) Act 2013 (“Act”). The Act specifies the criteria the HSE must take into account when implementing pricing decisions, which includes the existence of any agreements between the HSE and pharmaceutical representative groups for the pricing of medicines.
On 6 December 2021, the Irish Pharmaceutical Healthcare Association (“IPHA”), the association representing the international originator biopharmaceutical industry in Ireland, published the finalised version of the new IPHA Framework Agreement on the supply and pricing of medicines (“Framework Agreement”). The parties to the Framework Agreement are IPHA on behalf of its members, the HSE, the Department of Health and the Department of Public Expenditure and Reform. The Agreement will be in effect for four years, from 1 October 2021 to 31 September 2025.
The Framework Agreement seeks to build on the 2016 Framework Agreement, by retaining all existing provisions and implementing new measures which are intended to provide significant additional value in the region of EUR800 million for the State. Given the demand for innovative medicines, the additional headroom provided by the Framework Agreement is taken from older medicines primarily to fund innovation and protect on-patent medicines.
The new pricing measures will come into effect on 1 January 2022 and downwards pricing realignment, based on the existing basket countries, will take place on 1 March each year for the duration of the Framework Agreement. The new measures include, but are not limited to, staged increases in rebate contributions to the HSE for on-patent and off-patent medicines. The rebate to the HSE on all sales is increased from 5.5% under the current Framework Agreement to 7.75% in 2022, 8.25% in 2023, 8.5% in 2024 and 9% in 2025.
The Framework Agreement is, however expressed not to be legally binding or enforceable against the parties but more a statement of the intentions of the parties. It is also important to note that the Framework Agreement is not relevant to suppliers that are not members of IPHA although in practice some operate on its terms.
For further information, please contact Colin Kavanagh or Bridget McGrath.