Abstract

Objective

Our objective is to review and assess the main pharmaceutical cost-containment policies used in Ireland in recent years, and to highlight how a policy that improved fiscal sustainability but worsened economic sustainability could have improved both if an option-based approach was implemented.

Method

The main public pharmaceutical cost-containment policy measures including reducing the ex-factory price of drugs, pharmacy dispensing fees and community drug scheme coverage, and increasing patient copayments are outlined along with the resulting savings. We quantify the cost implications of a new policy that restricts the entitlement to free prescription drugs of persons older than 70 years and propose an alternative option-based policy that reduces the total cost to both the state and the patient.

Results

This set of policy measures reduced public spending on community drugs by an estimated €380m in 2011. The policy restricting free prescription drugs for persons older than 70 years, though effective in reducing public cost, increased the total cost of the drugs supplied. The policy-induced cost increase stems from a fees anomaly between the two main community drugs schemes which is circumvented by our alternative option-based policy.

Conclusions

Our findings highlight the need for policymakers, even when absorbed with reducing cost, to design cost-containment policies that are both fiscally and economically sustainable.