Speech by Mr Brian Lenihan T.D. on IPHA Agreement

The past successes of the relationship between the State and the pharmaceutical sector should not cause complacency. The Department is aware of the pressures companies face in an increasingly competitive business environment. Similarly, we hope, the industry is aware of the constraints that the Government is faced with, and in particular, the pressure on the health budget. In the current climate, the need to re-evaluate all lines of expenditure to ensure value for money has received particular attention in recent reports on the Health Sector.

In light of these and other factors, such as, the increasing needs of an ageing population, and greater expectations among the public generally, the introduction of new and more expensive drug therapies and the major breakthroughs to improve quality of life for patients, the health service is faced with new challenges which place almost infinite demands on all too finite resources.

It is fair to say that the relationship between the pharmaceutical industry and the Department is multi-faceted. The Department has been entrusted with ensuring the provision of a modern, efficient and cost effective health care system for our citizens. As I already mentioned, this often means dealing with the infinite demands placed on that system, while working within finite resources. Against this, we must balance the responsibility, to patients and taxpayers, to ensure that the resources available are well managed in an equitable and effective way.

This requires a balance to be struck between the State´s need for up to date therapies at acceptable cost and the industry’s requirement to make a return on its research and development costs. In Ireland this balance has been struck through a succession multi-annual drug price agreements which have, since 1972, been central to containing the cost of drugs for the Exchequer. The Department and the Association have a solid working relationship and we look forward to working with IPHA as the current agreement comes up for renewal, in the face of the inevitable changes which will arise from the challenges facing, not alone us, but Governments across the world.

The message from the European Pharmaceutical industry to its members is that reform of State expenditure on drugs is coming, and some of it is already here. The changes are not unforeseeable, and if you have good products, at affordable prices, you have nothing to fear.

Some General Points:

The importance of the pharmaceutical and chemical sectors is fully recognised by the Government.

  • The industry has provided substantial levels of well-paid employment, with a high graduate and skills content;
  • The industry has a considerable linkage with the Irish service industry, in such areas as, for example, engineering design, construction, engineering maintenance and others, all giving rise to several thousand additional jobs;
  • The industry has made, and continues to make, a substantial contribution to Ireland´s balance of trade with the rest of the world;
  • Finally, the industry makes a not insignificant contribution to the exchequer in its contribution to tax revenues.