The Health Services Executive could lose out on savings of more than €50 million a year on just three widely used drugs under the terms of the new Medicines Pricing Agreement, which is currently being finalised before going to Cabinet, an industry group has warned.

However, sources in the branded drugs sector says the Healthcare Enterprise Alliance (HEA), which represents producers of generics and biosimilar drugs, is simply engaging in scare tactics in order to maximise the price its members can secure for introducing copies of popular but off-patent drugs to the market.

The HSE currently spends around €100 million a year on rheumatoid arthritis drug Humira, which is produced by Abbvie, each year, and a further €60 million on Pfizer’s Enbrel, another arthritis drug. Both are set to lose patent protection in 2017.

A further €20 million is spent on Roche’s breast cancer therapy Herceptin, which goes off patent this year.

All three are new generation biologics, the fastest growing segment of the pharmaceuticals market.

As the first generation of these biologics come to the end of their patent period, they are beginning to see competition from "biosimilars". Large molecule protein drugs, biologics cannot be precisely replicated as a generic would do an older medicine but biosimilars are designed to act as copycat drugs. However, they are more expensive to produce than old style generics.

Initial expectations that biosimilars would offer savings of around 40 per cent on the original branded biologic have since been scaled back, with discounts in the largest drugs market – the United States – currently projected to be somewhere between 10 and 30 per cent in general.

The deal currently being negotiated between the Irish Pharmaceutical Healthcare Association (Ipha), which represents the branded drug sector, and the Government promises to cut the price of off patent biologics by 30 per cent when biosimilar competition enters the market.

But the HEA says the 30 per cent threshold makes it uneconomic for them to compete. As a result, without competition, the drugs will remain at their current higher prices for the period of the agreement. In the cases of Humira, Enbrel and Herceptin, that amounts to a cumulative price difference of €54 million a year.

The HEA has written to Minister for Health Simon Harris expressing its concern over what it calls the "biosimilar blocker" clause. It is understood the Minister has yet to respond.