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Prescription drugs: rip off Ireland at its worst

You can get prescription drugs elsewhere in the EU for a fraction of the price we pay in Ireland. You wouldn’t have to be a conspiracy theorist to deduce that there is something seriously wrong.

Philip Boucher-Hayes, 22 Mar 2007

On the face of it, it all seems so simple. Elsewhere in the European Union you can get prescription drugs for a fraction of the price charged in Ireland. Why can we not avail of the pills being manufactured in China at a penny a bucket?

Incompetent traditional practice, significant measures of self-interest and bureaucratic inertia, all play their part. But the actual explanation is so filthily complicated and the solution so devilishly hard to achieve that you would pity the poor fool that tries to unravel this particular Gordian knot.

Take any one of the generic pills that can be prescribed quite safely in place of the more expensive original “branded” products and ask yourself what are the blocks stopping it from getting from China or India into your mitt.

The first has to be our GPs. They operate in the time-honoured habit of prescribing the brand name that they know best, probably since the product first came on to the market. So when a cheaper generic enters the market, its manufacturers would have to significantly re-educate our friendly local physicians. In a market as small as Ireland, many producers find it’s not worth the effort.

The pharmacies sell pretty much the majority of their medicines to medical card patients at a loss. But they put a 50% mark-up on those that they sell to private patients. Which is more attractive? A 50% mark up on a product that costs €20 or a 50% mark up on one that cost €2. You do the maths.

Add to this inbuilt incentive to stock and sell the most expensive product the sweeteners that the existing manufacturers offer the pharmacists. In the RTÉ Radio Investigative Unit we have seen the freebies one major chain of chemists gets from a manufacturer. Literally every single product on the invoice came with a “buy 100 get 100 free” deal. There is little or no chance that any new player will be able to muscle in and break up a deal like that.

The greatest piece of lunacy is the difference in price between original “branded” products and their generics. In short there isn’t one.

An original branded product is one where the manufacturer has actually invented the product. They have spent years in R&D, getting FDA clearance, pursuing their research down many blind avenues, paying expensive biochemists and so on. For the sake of investment in future research, they deserve to get paid top dollar for their product.

Not so the generics manufacturers. Once the patent runs out on these original branded products, anybody can come along and copy these drugs. Their sole raison d’etre is to pile ‘em high and sell ‘em cheap. And that is what happens elsewhere in the world. But in Ireland the Generics manufacturers are taking the mickey.

Take the most frequently prescribed drug in the country, Lipostat – the cholesterol reducing medication. It was originally Bristol Meyers Squibb’s drug but it is off patent now, so a whole host of companies are manufacturing generics. Bristol Meyers Squibb sells its product Lipostat at a price that works out at €1.55 a pill. Ergha Healthcare sells their generic – Bystat – at €1.55 a pill. Pravat is €1.53. Cholstat is €1.47.

The same is true of other drugs. Take Prozac, the anti-depressant. A pack of 30 made by Eli Lilly, who held the patent until recently enough, will set you back €21.75. Affex and Gerozac – two other generics which do exactly the same thing – are just one cent cheaper at €21.74. To put it as politely as I can (ie. to avoid incurring the wrath of an army of “Big Pharma” lawyers), wherever you see such price similarities you have to get a bit suspicious that the market is not working like it should.

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