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Cost savings from use of generic medicines in Ireland Posted 12/04/2013

Ireland has one of the lowest usages of generics in the EU. However, in order to try to address this, the country introduced a new bill – Health (Pricing and Supply of Medical Goods) Bill 2012 – on 16 September 2012. Authors Dunne et al. discuss how the proposed changes could affect health care in Ireland [1].

The year on year increase in pharmaceutical expenditure in Ireland is amongst the highest in Europe with medicines, in 2009, accounting for approximately 13.5% of total healthcare spending.

Total expenditure on originator medicines in Ireland rose from Euros 120 million in 2004 to more than Euros 220 million in 2008. Meanwhile, the average cost per dispensed item under the state medical schemes increased from Euros 11.20 in 1997 to Euros 23.27 in 2007.

Current utilization of generic medicines in Ireland is reported to be a mere 18% of prescribed medicines. However, back in 2003, it was already reported that there was the potential for 40% of medicines prescribed via the state medical schemes (which account for 98% of prescriptions and 99% of expenditure in the community setting) to be dispensed generically.

Reductions in healthcare costs can be made by increased use of generics. It has therefore been recommended that Ireland examine the price it pays for generics and encourage greater prescribing using International Nonproprietary Name (INN) by doctors.

With a significant number of patents on originator drugs, worth almost Euros 300 million in the Irish market alone, due to expire in the next three years, generic medicines provide a cost-efficient means of controlling one of the fastest growing budget items in healthcare, i.e. pharmaceuticals.

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Reference

1.  Dunne S, Shannon B, Dunne C, Cullen W. A review of the differences and similarities between generic drugs and their originator counterparts, including economic benefits associated with usage of generic medicines, using Ireland as a case study. BMC Pharmacol Toxicol. 2013;14:1. doi: 10.1186/2050-6511-14-1.

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