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Availability and Pricing New Medicines in Ireland: Reflections and Reform

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Abstract

This paper argues that the current method of determining the availability and pricing of new medicines for public reimbursement in Ireland likely results in too large a share of public healthcare expenditure allocated to medicines. Resources are misallocated. Welfare is lowered. In contrast to some other areas of public healthcare, patients exercise ‘voice’ rather than ‘exit’ concerning the public provision of high-cost new medicines. Setting publicly agreed cost-effectiveness thresholds, with clear predictable criteria for when the cost-effectiveness thresholds can be exceeded, would contribute to the creation of a more appropriate new medicine decision-making framework. It would incentivise suppliers to set prices consistent with the decision-making framework. Guidance and clarity raises the possibility of shielding the Health Service Executive, the decision maker, at least partially, from the pressure to fund expensive new medicines that lack cost-effectiveness, while at the same time increasing transparency and predictability.

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Notes

  1. A list of the IPHA members that are signatories to the Agreement is contained in Schedule 2 of the Agreement [4].

  2. In selecting a €45,000 threshold, the NCPE appears to be relying on the threshold in the 2012–2015 State/IPHA agreement, a threshold which was not carried over into the Agreement.

  3. The NICE estimates were £20,000, £30,000 and £13,000. These were converted to Euros using the March 2017 average exchange rate from the Central Bank of Ireland at 0.86560.

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Acknowledgements

I should like to thank Francis O’Toole, together with two anonymous referees, for comments and suggestions on an earlier version of the paper. The questions raised concerning QALY thresholds were set out in [6] and subsequently developed in Munich Personal RePEc Archive (MPRA) working paper 79481, which benefited enormously from the contribution of James O’Mahony. The paper represents the views of the author who is responsible for any errors or omissions.

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Authors and Affiliations

  1. Department of Economics, Trinity College Dublin, Dublin 2, Ireland

    Paul K. Gorecki

  2. Research Affiliate, Economic and Social Research Institute, Dublin 2, Ireland

    Paul K. Gorecki

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Correspondence to Paul K. Gorecki.

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The author did not receive financial support from any firm or person for this article. The author is currently not an officer, director, or board member of any organisation with an interest in this article and hence there is no conflict of interest.

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Gorecki, P.K. Availability and Pricing New Medicines in Ireland: Reflections and Reform. PharmacoEconomics 35, 981–987 (2017). https://doi.org/10.1007/s40273-017-0536-y

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