drug prices in ireland

fisher8181

can someone expalin to me how drugs are priced in ireland?
my understanding is that a wholesaler buys drugs from a manufacturer and the pharmacy buys the drugs from a wholesaler.
i assume the manufacturer comes up with the price based on their investment in the drug (research etc) and the wholesalers charges a certain mark up to the pharmacy and the pharmacy chargesa a mark up to the patient.
where does the ipha come into it? how do they influence the price of drugs and are there limitations to the drugs they can influence the price of?

locum-motion

fisher8181 wrote: »

can someone expalin to me how drugs are priced in ireland?
my understanding is that a wholesaler buys drugs from a manufacturer and the pharmacy buys the drugs from a wholesaler.

Correct.

fisher8181 wrote: »

i assume the manufacturer comes up with the price based on their investment in the drug (research etc) and the wholesalers charges a certain mark up to the pharmacy and the pharmacy chargesa a mark up to the patient.

Correct, sort of.

Assuming for the moment that the manufacturer wants their drug to be available to the general public at the state's expense (ie on the Medical Card or on one of the other Community Drugs Schemes), the price has to be agreed with the government.

The government has a set of rules about how much it's willing to pay.

Although I can't remember the exact rules, I think it's something along the lines of; it cannot be more expensive in Ireland than the average price it is being sold at in a 'basket' of 9 EU countries. I can't remember which countries are in the basket, but it used to be about 5 until they extended it to include some of the cheaper countries like Spain, thereby reducing the price in Ireland.
[Off topic sidebar: The ESRI recently proved that they're not on this planet by suggesting that the Government change the rules so that we're the same as the cheapest country in the basket. (This would not work because we're not a big enough economy to justify it; if this were the case, the manufacturers just wouldn't bother to make their drugs available in Ireland at all.)]
This agreed price is the 'Factory Gate Price', and is the price at which wholesalers buy the drug from the manufacturer. Let's assume for an imaginary drug called 'Examplecillin' that it's €85.

The wholesalers are businessmen. They sell examplecillin for whatever they can get for it. There is no fixed price. That being said, for historical reasons the wholsalers all charged a mark-up of 17.66% for years, and still do. This means that they sold Examplecillin for €100, the Trade Price (aka Invoice Price or Cost Price) (85 + 17.66% = 100)

The 'historical reason' was that the 'Reimbursement Price' (the amount the Government pay to the Pharmacy for dispensing it was pegged to allow the Wholesalers a margin of 15% (Note: 'Margin' and 'Mark-up' are not the same thing; a mark up of 17.66% gives a margin of 15%. Eddie Hobbs, by the way, persistently mixes the two up on his TV show. I'm unconvinced that he does it by accident, as he always chooses to portray businesses as rip-off merchants - he never makes the mistake the other way round!)

So, to recap: Examplecillin used to sell from Factory to Wholesealer at €85, from Wholesaler to Pharmacy at €100, and Government reimbursed Pharmacy at €100 (plus dispensing fees and whatnot)

The big kerfuffle a couple of years ago (remember? When half the pharmacies in the country withdrew from the Community Drugs Schemes) was when the Govt tried to reduce the Wholesalers margin from 15% to 10%. That's fine in theory, but in practice, the Govt doesn't buy anything from Wholesalers, they buy it from Pharmacies. So the Govt said 'In future, we're only going to reimburse the Pharmacies €93.50 for Examplecillin' (85 + 10% = 93.50) They've since reduced it further, to a margin of 8%, so the Pharmacy is now reimbursed €91.80 (85 + 8% = 91.80) The wholesaler's invoice price is still €100.00 for Examplecillin, since the Govt can't force them to change it.

If you're reading that and thinking 'That can't be right!', I haven't made a mistake. If the wholesalers Invoice Price for an item is €100, the Pharmacy gets reimbursed €91.80 for supplying it to you. Draconian or what? The Pharmacies tried to tell the Govt "But you're not reducing the Wholesalers margin, you're just reducing the price you pay Pharmacies" but got nowhere (By the way, this was all completely separate to the dispensing fees etc that the pharmacies get; they were all reduced as well.)

fisher8181 wrote: »

where does the ipha come into it? how do they influence the price of drugs and are there limitations to the drugs they can influence the price of?

The IPHA are the body that enters into negotiations with the Government on behalf of their members (the manufacturers) to set the Factory Gate Price. The Government wants to reduce drug costs, so it sits down with the IPHA.
If you ever find out what happens in those meetings, let me know, will ya?

ciara84

nice explaination there, does the price differ for private prescriptions vs medical card? can they charge me 200 for a drug if I'm getting it privately, even though if I showed a medical card script, they would only get 100 from the government? (or close enough to a 100 as you say)

locum-motion

ciara84 wrote: »

nice explaination there, does the price differ for private prescriptions vs medical card? can they charge me 200 for a drug if I'm getting it privately, even though if I showed a medical card script, they would only get 100 from the government? (or close enough to a 100 as you say)

For private prescriptions, it's just the same as any item in any shop; the owner of the business sets the price at what he reasonably expects a patient can pay. High enough to make a profit, but without being so high as to drive the patient away to a competitor. And yes, this amount will be higher than what the State pays. And yes again, this does mean that private patients are subsidising the Medical Card. It has always been so, and always will.

There is no set price for private prescriptions. To have one would be illegal.

fisher8181

great answer locum-motion. very detailed. many thanks.

final question, does the ipha represent the manufacturers of most drugs or just a few of them?

palmcut

fisher8181 wrote: »

great answer locum-motion. very detailed. many thanks.

final question, does the ipha represent the manufacturers of most drugs or just a few of them?

IPHA represents the manufactures of drugs called "Branded drugs".eg Lipitor

APMI represents the companies that make "Generic drugs".eg Atorvastatin.

The companies in APMI had a row recently and split. Two of the generic companies went out on their own and the rest of the generic companies stayed in APMI.

That is the simple explanation. However there are some companies in IPHA that have branded drugs and branded generics.

And just to make it a bit more confusing some of the Generic companies produce generic drugs and what are called Branded generics.

palmcut

Generic drug penetration of the Irish market is around 20%. In some other countries generic penetration is nearly 70%.

The Irish government is due to bring in a law making generic substitution compulsory for branded drugs where a generic is available. This is being brought in with a policy of reference pricing.
The pharmacist will only be paid for the generic. If the patient wishes to get the original brand, then the patient will have to pay the difference between the brand price and the generic price. This payment of the difference is being called reference pricing.

Lipitor is soon to go off patent. It is expected that the generics will available from the 1st June. When Lipitor goes off patent, it's price will drop by 15% immediately and by a further 20% in 18 months.
The generics will have to be priced at least 5.7% less than the original
brand.

for example.
If Lipitor was priced at 10.00€ today; it would be priced at 8.50€ when it goes off patent. The generic would have to be priced at 8.02€ or less.
(These are not the real prices)
Then in 18 months time the lipitor would be priced at 6.50 and the generic would have to be priced at 6.14 or less.

palmcut

Maybe the HSE could pay a bit more attention to drug prices.

Sildenafil is the drug in Viagra (erectile dysfunction) and Revatio (Pulmonary arterial hypertension)

Both are paid for by the HSE. (The PCRS section)

The ingredient cost price is defined by the HSE as the exfactory price + the wholesale mark up.

The ingredient cost for 4 Viagra 100mg is €34.87.
This is an ingredient cost of 8.72 per 100mg.

The ingredient cost for 90 Revatio 20mg is €553.95.
This is an ingredient cost of 30.77 per 100mg.

Mucco

Here you go, from
KANAVOS, P., VANDOROS, S., IRWIN, R., NICOD, E. & CASSON, M. (2011) Differences in costs of and access to pharmaceutical products in the EU. Brussels, EP, DG Internal Policies.

Bebop

Can I bring my Prescription to Newry and buy my Blood pressure meds cheaper? this would make sense if I could buy 3 months or even 6 months supply

palmcut

Bebop wrote: »

Can I bring my Prescription to Newry and buy my Blood pressure meds cheaper? this would make sense if I could buy 3 months or even 6 months supply

What happens if your BP changes and your Doctor prescribes different medication?

Bebop

I'm willing to take that chance, with my wife and I on fixed incomes and both taking BP meds I have been thinking about the Newry alternative, if the saving was enough I could do the trip every 3 months
We have friends who travel to Spain regularly and bulk buy their prescription and OTC needs while there, prices seem to be less expensive there but looking at the chart above the UK seems to be even cheaper
I realise that this is not good for the Pharmacist business here but ripping off the customer is not going to work for much longer

Vorsprung

Zombie thread which has run its course.

Bepop, you should really have a chat with your GP about your plans, he/she might want to see you back for another check at some stage. In terms of whether you can get your meds up north, some pharmacies will accept prescriptions but you're best ringing them directly.

Locked.