State/Industry Medicine Pricing Agreements, Cost Savings and Counterfactuals: the Case of Ireland

Paul K. Gorecki

Abstract


Ireland’s Minister for Health claimed cumulative savings of €600 million for the 2016-2020 framework agreement with the Irish Pharmaceutical Healthcare Association. These savings are estimated using an implausible counterfactual of no agreement, since multiannual State/industry agreements are longstanding, while, since 2013, the State has powers to set medicine prices. A better counterfactual is the status quo: replicating the 2012-2015 agreement and extending its term for one year. This alternative counterfactual results in estimated cumulative savings of only €290 million. Greater transparency and more prudent choice of comparator for savings estimates would provide confidence in the estimates and more accurately demonstrate the likely savings that will be achieved.

Keywords


pharmaceuticals; prices; Ireland

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