State expenditure on pharmaceuticals has grown from €1.3 billion in 2012 to €2.3 billion in 2020, and the  primary driver is the cost of High-Tech Drugs.

The cost of HTDs has increased at an average of 11% year-on-year from €380m in 2012 to €790m in 2020, according to a Spending Review paper prepared by the Department of Health and the Department of Public Expenditure and Reform.

The number of patients on HTD drugs paid from the public purse has grown from 57,000 in 2012 to 89,000 in 2019.

The rest of the jump in spending is down to the introduction of new, higher cost medicines, partly offset by reduced-price deals with the makers and by substituting lower cost treatments, mostly generic or biosimilar options.

The lion’s share of the HTC spending is on rheumatoid arthritis and cancer, both of which have large numbers of sufferers and above median annual treatment costs of c.€12,700 and €13,500 per patient per annum respectively.

In Association with

While Ireland and other governments have had an increasing pattern of negotiating price reductions with the industry for several years now, the  review highlights a tactic used by the industry to stymie these efforts — Non-Disclosure Agreements.

The review says: “There is a notable trend towards increasingly complex pharmaceutical pricing arrangements between governments and the pharmaceutical industry being subject to non-disclosure agreements that compromise the ability to perform an accurate cross-country comparison of pharmaceutical prices.”

The civil servants drily add: “This is advantageous from the perspective of the pharmaceutical industry, as it reduces States’ ability to evaluate comparative value for money across other jurisdictions.”

The review recommends a series of both short-term and longer-term measures to contain or reduce costs.

It also refers to policies to promote using generic and bio-similar medicines in place of the branded versions, “including chemical-based prescribing, mandatory generic substitution, gain-share initiatives and the publication of a biosimilar strategy”.

On this, the authors are clearly influenced by the fact that the cost of treating arthritis has begun to fall due to the adoption of “non-originator” drugs.

Finally, the review suggests changes to the Quality Adjusted Life Year Threshold, now set at €45,000, in the drug approval process. This relates to thresholds that rate the cost effectiveness of new drugs if they are to be reimbursed by state expenditure.