The Arrival Of Generic Substitution And Reference Pricing In Ireland

Author:Mr Tom Hayes and Rebecca Ryan

The Health (Pricing and Supply of Medical Goods) Act 2013 (the "Act") introduces a system of generic substitution, which enables pharmacists to substitute a cheaper "generic" medicine when a more expensive medicine has been prescribed. The Irish Medicines Board (the "IMB") has been given the task of deciding what medicines are interchangeable and compiling an online list of interchangeable medicines. The Act sets out the criteria to be considered by the IMB. Medicines may be considered interchangeable if the IMB is satisfied that the products have the same active ingredients in terms of qualitative and quantitative composition, the same (or appropriately substitutable) pharmaceutical form, and the same route of administration. The IMB started work on identifying classes of interchangeable medicines before the Act was passed. It is prioritising the most expensive classes of products, including statins, proton pump inhibitors, ACE inhibitors, and angiotensin II receptor blockers. The Act also establishes a 'reference pricing' system, which gives the Health Service Executive (the "HSE") the power to set a common price that it will pay for interchangeable medicines. The system does not affect a manufacturer's ability to fix the retail price of a particular medicine. However, where an interchangeable medicine is dispensed under any of the State-sponsored Community Drug Schemes, the State will only reimburse the reference price for the group of interchangeables to which the dispensed medicine belongs. The HSE will review the reference price set for a group of interchangeable medicines at least once a year. The HSE has a wide discretion in setting the reference price and it is widely anticipated that the reference price will be...

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