We are living through a Golden Age of enlightened governance with the Troika managing our affairs

A theme examined on here before – here and here for example – is the unprecedented benefit to the well-being of this State from oversight by the bailout troika. It mightn’t feel like it to us now, with austerity budget after austerity budget, a collapse in living standards, high unemployment, emigration and scary debts, but really this misses the bigger picture as regards governance – the mistakes were made in the 2000s and the present period is about dealing with the mess from that legacy. When future historians look back at the big-picture history of Ireland, they are likely to conclude that Ireland in 2010-2015 enjoyed a Golden Age of enlightened governance. I say “2015” because, although we will receive the last of the bailout funds at the end of 2013, the Troika will still continue to visit but their reviews and conclusions were become increasingly less significant to the powers that be.

There is still no sign of the new commercial leases register today on the Property Services Regulatory Authority’s website, but no doubt it will be here shortly. Because if it’s not, the Troika will demand answers when it pays us a visit in a couple of weeks for its 10th review mission. The new register is designed to promote competition and transparency in an important area of business. Unless this Government was being frog-marched into delivering it, you can bet that it would never see the light of day outside a soon-forgotten election commitment.

We’re about to get reformed bankruptcy laws, and if you think any Irish government would have scratched its ass and developed reforms, unless forced to by the Troika, then think about the history of the residential property price register. Called for in the Kenny Report in 1974, every single government subsequently praised the concept of a register and promised to implement one, but somehow none managed to do it. Michael Finneran (who? Housing minister in Fianna Fail/Green government 2008-2011) repeatedly promised working groups, progress and delivery and he was closely observed on here, still publicly proclaiming his support for what was then called a “House Price Database” but in private, nada was happening.

We’ll soon have credit registers showing what people owe so that new borrowers can make more informed decisions. We have a version of an independent fiscal advisory council. We have a legal services reform bill and we are supposed to have competition reform in the medical sector. We have the best stress-tested banks in the world, though that is not saying much. We’re meeting deficit reduction targets. Yes, we’re paying back all the bondholders but that was our decision, even if one member of the Troika was pushing it.

And today, we learn that the health minister is being sidelined by the Troika which has had enough of his guff about reforms, cutting the costs of consultants and medicines and the like, and the Troika will now be overseeing the health budget on a monthly basis. Minister Reilly might downplay the indignity of the Troika’s vote of no confidence in his ability to manage the €13bn budget, but if you just take a look at the parliamentary questions and answer below from 26th March 2013, about the outrageous price of medicines in this State, you have everything to know that, without Troika oversight, nothing will change. I, for one, will be sad when we see the back of the Troika.

Deputy Pearse Doherty: To ask the Minister for Health further to Parliamentary Questions Nos 612 and 570 of 12 March 2013, the reason the medicine olanzapine costs consumers €166 in this State compared with €9 in Northern Ireland.

Deputy Pearse Doherty: To ask the Minister for Health further to Parliamentary Questions Nos 612 and 570 of 12 March 2013, the reason the medicine atorvastatin costs consumers €33.77 in this State compared with €2.87 in Northern Ireland.

Minister for Health, James Reilly: The prices of drugs vary between countries for a number of reasons, including different prices set by manufacturers, different wholesale and pharmacy mark-ups, different dispensing fees and different rates of VAT. In recent years, a number of changes to the pricing and reimbursement system have been successfully introduced in Ireland. These have resulted in reductions in the prices of thousands of medicines.

Following intensive negotiations involving the Irish Pharmaceutical Healthcare Association (IPHA), the HSE and the Department of Health, a major new deal on the cost of drugs in the State was concluded in October last.  It will deliver a number of important benefits, including

·        significant reductions for patients in the cost of drugs,

·        a lowering of the drugs bill to the State,

·        timely access for patients to new cutting-edge drugs for certain conditions, and

·        reducing the cost base of the health system into the future.

The gross savings arising from this deal will be in excess of €400m over 3 years. €210 million from the gross savings will make available new drugs to patients over 3 years. Thus, the deal will result in a net reduction in the HSE expenditure on drugs of about €190m.

The Department and the HSE have successfully finalised discussions with the Association of Pharmaceutical Manufacturers in Ireland (APMI), which represents the generic industry, on a new agreement to deliver further savings in the cost of generic drugs. Under this Agreement, from 1 November 2012, the HSE will only reimburse generic products which have been priced at 50% or less of the initial price of an originator medicine. In the event that an originator medicine is priced at less than 50% of its initial price the HSE will require a generic price to be priced below the originator price. This represents a significant structural change in generic drug pricing and should lead to an increase in the generic prescribing rate.

It is estimated that the combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013.

The IPHA agreement provides that prices are referenced to the currency adjusted average price to wholesaler in the nominated EU member states in which the medicine is then available.  The prices of a range of medicines were reduced on 1 January 2013 in accordance with the agreement.

The Health (Pricing and Supply of Medical Goods) Bill 2012, which was passed at Committee Stage on the 19th of March, provides for the introduction of a system of generic substitution and reference pricing. The Bill provides that when the HSE is setting a reference price for, or reviewing a reference price set for, a relevant group of interchangeable medicinal products it shall take into account the following criteria:

·        the ability of suppliers to meet patient demand for the relevant item;

·        the value for money afforded by the relevant item;

·        the equivalent prices of the relevant item in all other Member States where the product is marketed;

·        the prices of therapeutically similar items; and

·        the resources available to the HSE.

It is important to balance achieving best value for money for the taxpayer with assuring continuity of supply for critical medical products, particularly in a small market like Ireland. Consequently, the Bill aims to achieve value for money while avoiding disruption in the availability of medicines on the Irish market. This legislation will promote price competition among suppliers and ensure that lower prices are paid for these medicines resulting in further savings for both taxpayers and patients.

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