Press Release

Commencement of the Health (Pricing and Supply of Medical Goods) Act 2013

Dr. James Reilly, Minister for Health and Mr. Alex White T.D., Minister of State with responsibility for Primary Care in the Department of Health, today (Monday 24th June) announced the commencement of the Health (Pricing and Supply of Medical Goods) Act 2013.

This Act provides for the introduction of a system of generic substitution and reference pricing. It also sets out statutory procedures governing the supply, reimbursement and pricing of medicines and other items to patients under the GMS and community drug schemes.

Minister Reilly said that “The commencement of this Act provides the Irish Medicines Board and the HSE with a robust statutory framework for the introduction of generic substitution and reference pricing on a phased basis. This legislation will provide much greater access to generic medicines in Ireland and will reduce medicine costs for patients and for the State. Generic Substitution will be introduced incrementally, with the IMB prioritising those medicines which will achieve the greatest savings.”

Minister White added that “The Irish Medicines Board will review an initial 20 active substances, which equates to approximately 1,500 individual medicines. It is expected that the first List of Interchangeable Medicines, containing groups of atorvastatin products, will be published within 2 months from today, in mid-August. The IMB will publish subsequent lists for other groups of medicines on an ongoing basis. The HSE will then set a reference price for these groups with a view to having the first reference prices implemented by November. From the end of the year onwards, hundreds of thousands of prescriptions will be subject to generic substitution, which will offer choice and reduced prices to patients.”

Aside from the cost savings objectives of this Act, patient safety is at the centre of what is being delivered under this legislation. The IMB carries out a detailed review of generic and brand medicines, and ensures that they are safely interchangeable and satisfy all the conditions set out in the Act, prior to publishing a list of interchangeable medicines. To further enhance patient safety, the Act allows a prescriber to indicate on a prescription that a particular interchangeable medicinal product should, for clinical reasons, not be substituted.

This legislation will promote price competition, a greater use of generics and deliver lower medicine prices for the taxpayer and for patients.


Note for Editors

A generic medicine is a medicine that is similar to an original, brand named medicine. It has the same active substances as the original medicine and is made to the same standard to make sure it is safe and effective. A generic medicine must meet exactly the same standards of quality and safety and have the same effect as the original medicine. Substitution will only be allowed where it is safe to do so.

Currently, when a specific brand of medicine is prescribed for a patient, a pharmacist can only supply that particular brand, even when less expensive generic versions of the same medicine are available. The Act permits pharmacists to substitute medicines prescribed, provided that they have been designated as safely interchangeable by the Irish Medicines Board.

Reference pricing involves the setting of a common reimbursement price, or reference price, for a group of interchangeable medicines. It means that one reference price is set for each group or list of interchangeable medicines, and this is the price that the HSE will reimburse to pharmacies for all medicines in the group, regardless of the individual medicine’s prices. A reference price will be set for each group of interchangeable medicines published by the IMB.

Eligible patients using State drug schemes like the Medical Card or Drugs Payment Scheme will not face any additional costs for products priced at or below the reference price. If a patient would like to receive a particular brand that costs more than the reference price then the patient will have to pay the additional cost of that product. In cases where substitution is prohibited for clinical reasons, patients will not face any additional costs if the prescribed product costs more than the reference price.

Generic substitution coupled with reference pricing provides patients with an incentive to opt for the cheapest available product, but does not impose any unavoidable additional costs on patients.

The Act sets out the timelines which apply to the IMB and HSE in terms of publishing lists of interchangeable medicines and setting reference prices respectively:

  • Once the IMB makes a decision to add a group on interchangeable medicines to the List of Interchangeable Medicines, it must enter into a process of consultation with the Marketing Authorisation Holder (MAH) for each item in the Group and the MAHs have 28 days to make a written submission to the IMB.
  • The IMB then has 14 days to consider submissions received and, if it decides not to amend its proposal, to publish the List of Interchangeable Medicines. Further information concerning the IMB process is available here :
  • The HSE may then propose a reference price for the interchangeable group and each MAH within the Group will have 28 days to make written representations concerning this proposal.
  • Having considered the written representations received, if the HSE decides to implement the reference price, it shall give 28 days notice to community pharmacy contractors prior to implementing the reference price.

Once the legislation is commenced, if a medicine is prescribed using the active substance name (INN) but not published as yet on the List of Interchangeable Medicines, the pharmacist shall offer a patient the cheapest version of that product.

The Act also sets out statutory procedures governing the supply, reimbursement and pricing of medicines and other items to patients under the GMS and community drugs schemes. The Act will allow the HSE to attach conditions to the supply of certain items, provided that any restrictions are evidence-based and in the interests of patients and ensuring value for money.

The Act is being commenced in full with the exception of Section 36 which allows the name of the Irish Medicines Board to be changed to the Health Products Regulatory Authority. It is expected that this section will be commenced in 2014.

An information and education campaign, aimed at both health professionals and the public, will be launched to coincide with the introduction of generic substitution and reference pricing.