A new agreement on pricing and supply of medicines in the Irish market, expected to save the Exchequer around €300 million, has been concluded between pharmacists and the Health Service Executive (HSE).
Tanaiste and Minister for Health Mary Harney welcomed the agreement between the health service and the Irish Pharmaceutical Healthcare Association (IPHA), saying it would provide increased value for money for the State and the consumer and result in a reduction in the price of existing drugs and medicines of up to 35 per cent.
The drug scheme runs to 2010 and will result in savings in the cost of drugs to hospitals and to the State's medical schemes.
Ms Harney said there will also be savings through the use of a wider basket of EU countries for the pricing of new medicines coming onto the Irish market along with two price reviews for new medicines over the lifetime of the agreement.
The inclusion in that comparative 'basket' of nine countries such as Spain and Austria, which traditionally has lower drug prices than Ireland, will help lower the cost of drugs here, Ms Harney said.
"I want to be able to afford the best treatment for patients and this is an important step in that direction. This agreement will have a major longer term benefit through putting in place more rigorous and cost effective processes for evaluating drugs prices.
"The savings achieved as a result of this agreement will be used to improve the overall level and quality of health services provided to patients."
Ms Harney said the agreement is the first in a series of negotiations agreed by the Cabinet committee on health to examine "all aspects of the drug delivery system".
Talks are also due to take place shortly with pharmaceutical wholesalers and drug manufacturers.
"In addition to the savings quantified there will be further savings as generic manufacturers respond to the lower price of branded drugs. There is nothing in this agreement that precludes the vigorous promotion of generic prescribing and we will be pursuing this in the future," Ms Harney said.
Con Clissman, president of IPHA said: "Today is a good day for Irish patients who will benefit from the foresight of the Irish Government who through their commitment to innovation and the potential o newer and better medicines will help patients live longer, healthier and more productive lives. The financial impact on our members will be significant."
Michael Guckian, IPU president, said: "Patients will benefit from a reduction in the price of medicines, particularly those whose income is marginally above the qualification threshold for a medical card.
"Now that these negotiations have been concluded, we are looking forward to entering into talks with the Department of Health and Children and the HSE so that we can continue to provide a high quality pharmacy service to patients in all communities."
Mr McGuckian said the talks would need to address a number of "key issues", including the current low levels of payments for the medical card scheme.
The IPU, which represents 1,600 pharmacists across the State, welcomed the reduction in the price of medicines.