The Irish Life Sciences industry is now fast-approaching the 30 September 2025 expiry date of the agreement on the Supply and Pricing of Medicines between the Irish Health Service Executive ("HSE") and the Irish Pharmaceutical Healthcare Association (the "IPHA Agreement"). For direct negotiations to take place between the Department of Health and industry, the Government is required to issue a mandate. Less than a month out from the expiry date of the Agreement, no mandate has been issued and talks between the HSE and the IPHA over a new Agreement have yet to begin.
It appears likely that any renegotiation of the Agreement will be centred around the 180-day time frame for assessing new medicines as well as cost benefits against the backdrop of an unsettled pharmaceuticals market. At present, the Irish reimbursement approvals process for new medicines takes 729 days on average, meaning it currently takes two years for a medicine to be made available in Ireland . The average reimbursement timeline across Europe, meanwhile, is markedly shorter at 578 days, with some countries such as Germany able to bring new medicines to market in 128 days1. The effects of this are being felt by patients receiving public healthcare as the longer approval process has restricted many newly-developed drugs from being made available for public use. Conversely, patients who receive private care can avail of treatments and drugs approved by the European Medicines Agency ("the EMA")2. This gap in availability is particularly visible in the field of oncology, as health insurance companies are only able to cover the cost of novel cancer drugs approved by the EMA3.
As a result of this the entry of new medicines into the Irish market has bottlenecked, and industry leaders are likely to seek assurances in this regard when negotiating any new Agreement with the HSE.
The drawn-out approvals process comes against the backdrop of a shortage of certain medicines once commonly available in the Irish market. Both drug developers and the HSE alike will hope that any renegotiated Agreement resolves the shortage and returns various medicines to the market.
As the Life Sciences industry awaits the results of a newly negotiated IPHA Agreement, it is timely to recall what the IPHA Agreement covers and its importance to industry.
The IPHA Agreement strictly applies only to IPHA members, and governs their supply of medicines which are paid for by public sector payers and in particular are on the HSE Reimbursement List.
The Health (Pricing and Supply of Medical Goods) Act 2013 provides for the HSE to take account of any IPHA Agreement, as well as other factors, when deciding on the price of a medicine. Technically speaking, where there is no IPHA Agreement, the industry would face the risk of the HSE acting unilaterally to control medicines pricing, using the various statutory and procurement mechanisms which are available to it and without taking into account terms which have been negotiated with IPHA.
In terms of the pricing rules, the IPHA Agreement provides that the price of a medicine is:
- calibrated against the average of the currency adjusted ex-factory price in 14 countries4,
- subject to a 'downward-only' annual price realignment, and
- subject to a rebate payable to the HSE.
The IPHA Agreement also provides that any medicines not available in those same 14 countries shall be priced by the supplier at a rate which will then be considered by the HSE in accordance with the Health (Pricing and Supply of Medical Goods) Act 2013.
In addition, there are specific rules for patent-expired medicines. The IPHA Agreement provides for a 50% reduction to the original ex-factory price following HSE notification to the supplier of the availability of a substitutable generic medicine. It also provides for a 20% reduction for patent-expired biological medicines following market entry by a biosimilar.
The IPHA Agreement also covers important non-pricing issues, such as (i) continuity of supply, and (ii) the process for review, approval and funding of new medicines including through the Rapid Review and HSE Drug Group Processes.
A copy of the current IPHA Agreement is available here.
Footnotes
1. European Federation of Pharmaceutical Industries and Associations, 'W.A.I.T Indicator 2025', https://www.efpia.eu/media/oeganukm/efpia-patients-wait-indicator-2024-final-110425.pdf
2. RTE, 'Two-tier health system failing patients, say Irish Cancer Society', 22 November 2024, https://www.rte.ie/news/health/2024/1122/1482285-cancer-health-funding/
3. Irish Times, 'Why are new cancer drugs available to private patients but not public patients?', 20 May 2024, https://www.irishtimes.com/health/2024/05/20/why-are-new-cancer-drugs-available-to-private-patients-but-not-public-patients/
4. Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK
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