Four-year Agreement reached between international research-based biopharmaceutical industry and the State
* More than 170 new, research-based medicines expected to be proposed over the next four years
* Conditions set for Ireland to steadily adopt new medicines, complementing the strength of the research-based biopharmaceutical manufacturing sector across the regions
* Budget 2022’s €30m for innovative new medicines will help to give more patients access to innovation pipeline
A new supply Agreement between the research-based biopharmaceutical industry and the State will improve patients’ access to the latest innovative medicines, according to the Irish Pharmaceutical Healthcare Association, the representative organisation for medicines innovators.
The four-year Framework Agreement on the Supply and Pricing of Medicines, agreed between the research-based industry and the State, takes effect from January 1, 2022. It means that medicines, brought forward by the research-based biopharmaceutical industry after years of research and development, will be available to patients faster through an improved funding framework.
Next year, IPHA member companies expect to propose about 35 innovative new medicines for a range of medical conditions, including arthritis, multiple sclerosis, psoriasis, spinal muscular atrophy and many forms of cancer. These medicines would treat almost 17,500 patients. The €30 million for new medicines, announced by the Government in Budget 2022, will help to give more patients access to new treatments in the innovation pipeline. Over the four years of the Agreement, the research-based industry expects to propose over 170 innovative new medicines. The new Agreement means there will be an improved funding framework in place to support the Health Service Executive’s reimbursement process and growth in the availability of innovative new medicines.
The research-based biopharmaceutical industry has agreed to staged increases in rebates to the State on sales of on-patent and off-patent unique medicines, rising from 5.5% this year to reach 9% in October 2024. The industry will deliver about €89 million in rebates in that period. When combined with price discounts on off-patent medicines that have market competitors and with price realignment measures, IPHA calculates the value of efficiencies over four years at between €700 million and €800 million.
The research-based industry believes the Agreement provides for adequate, sustained investment in innovative new medicines, with allocations decided annually based on horizon scanning and the budgetary process. IPHA will monitor, and contribute towards, the achievement of an improved timeline between a company’s application for reimbursement of a new medicine in the health services, with the State committing to resourcing the reimbursement system sufficiently for the timely processing of applications. Our analysis shows that it has taken more than three years to reimburse some innovative new medicines.
The State has committed to increasing the number of HSE Drugs Group reimbursement decision-making slots. These are expected to total between 50 and 60 annually. That would represent an increase in the number of slots of between 35% and 62% over 2020. The move is a capacity-building measure that should improve the flow of clinically beneficial innovative new medicines to the health services.
The most recent data, gathered annually by health analysts IQVIA for EFPIA, the research-based biopharmaceutical industry’s European representative organisation, shows that, among western European countries, only France and Portugal are slower than Ireland in making innovative new medicines available to patients. Patients in Germany get innovative new medicines four times faster than in Ireland. Among 34 European countries surveyed, Ireland places 18th.
There will be no change in the 14 European countries used to calculate medicines prices in Ireland. This ‘reference basket’ comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK.
The research-based biopharmaceutical industry believes the new Agreement has the potential to improve the operating environment for the adoption of innovative new medicines in the health services. That will improve health outcomes, with medicines shown to contribute to lower mortality rates and better survival rates for a range of conditions including heart disease, stroke, cancer and many more.
Paul Reid, President of IPHA, said: “The Agreement is the product of joint working with the State. We need to find ways to get innovative new medicines to patients faster while, at the same time, managing affordability challenges with the State. The Agreement provides a platform for helping to raise healthcare standards through a steady, continuous flow of innovative new medicines that emerge from years of research and development. I hope the research-based biopharmaceutical industry and the State can continue to work in partnership in areas like horizon scanning and shorter times to reimbursement decisions so that we can adopt innovation faster in the health services. The announcement by the Government of €30 million for new medicines in Budget 2022 was a welcome step towards improving the funding environment.
“We are putting in place the conditions for Ireland to adopt innovative new medicines faster, complementing the strength of the research-based biopharmaceutical manufacturing sector across the regions. We want to help to close the gap between scale and speed – that Ireland can have a significant international biopharmaceutical footprint and fast adoption of innovative new medicines in the health services.”
The biopharmaceutical sector is among Ireland’s strongest industrial performers, including during the pandemic. Rising exports and strong corporate tax receipts are helping to generate Exchequer revenues and economic activity across the regions. The sector accounts for some 45,000 jobs and generates almost €15 billion in gross value-added for the economy annually. Advancements in medicines have helped to extend life expectancy which climbed by 25 years for men and by 29 for women between 1911 and 2011. In cancer, five-year survival rates have improved dramatically. The mortality rate for heart attacks dropped by 51% between 2008 and 2018. Thousands of treatments are in development globally to tackle unmet medical needs across a range of therapy areas. In Invest In Our Futures, the IPHA campaign in the run-up to the new Agreement and Budget 2022, we highlighted this progress in medicines.
Oliver O’Connor, Chief Executive of IPHA, said: “The Agreement, and the policy behind it, supports innovation by making clear distinctions between savings measures affecting patent-protected medicines and off-patent, non-exclusive medicines. It provides for significant price reductions for non-exclusive medicines. Our companies support robust competition on a level playing field.
“IPHA member companies discover, develop, manufacture and supply new medicines, bringing to patients the product of research and development that is enabled by a stable intellectual property framework. Over the lifetime of this Agreement, we expect to launch more than 170 innovative new medicines for serious medical conditions. We now have the basis for making innovative new medicines available to patients faster than before.
“So, clinically, this Agreement can be a milestone in the delivery of new treatment options. Economically, too, we know that medicines are productive investments, with more people staying active in the workforce for longer and, potentially, avoiding long-term hospitalisations. As the world of medicines innovation turns, Ireland should be a strong performer across all stages of the lifecycle – discovery, development, manufacturing and adoption. Let us resolve to do our best in each of them.”
