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Life Sciences Update: New Agreement on Medicine Pricing and Model Clinical Trial Agreements in Ireland

AUTHORs: Kate McKenna, Emma Doherty co-author(s): Neringa Juodkunaite Services: Life Sciences DATE: 13/01/2022

On 15 December 2021, after prolonged negotiation, the Irish Health Service Executive (“HSE”) and the Irish Pharmaceutical Healthcare Association (“IPHA”) announced a new four-year Agreement on the Supply and Pricing of Medicines which was expressed to apply from 1 October 2021 to 30 September 2025 (the “IPHA Agreement”)[1]. 

We discussed the key features of the previous IPHA agreement and its importance to the Irish pharmaceutical industry in our previous article: Life Sciences Update: Upcoming Expiry of IPHA Agreement on Medicine Pricing in Ireland.

The key new features of the IPHA Agreement include:

  • New agreed “Principles And Processes for The Assessment of New Medicines” which are intended to give industry greater legal certainty on the pathway to getting new medicines approved for reimbursement by the HSE in Ireland. The agreed principles reflect a new HSE commitment to resourcing the reimbursement system sufficiently to ensure more timely processing of the typical application for reimbursement of a new medicine, which has taken more than three years in recent times.
  • New gradual increases in rebates payable to the HSE on sales - increase from 5.5% to 7.75% in 2022, 8.25% in 2023, 8.5% in 2024 and 9% in 2025 and creation of a new category of ‘hybrid products’ for rebate purposes.
  • New agreed principles for “The Assessment and Selection of Best Value Biologic Medicines” which are intended to give industry greater legal certainty regarding the nature of the process used by the HSE (which has no specific legal / statutory basis) in order to rank medicines and incentivise use of an identified ‘best value’ medicine within a particular category.

There has been no material change to the rules on automatic price reductions for patent-expired medicines or to the methodology for pricing of new medicines and in particular 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 IPHA Agreement strictly only applies to IPHA members, but IPHA has historically set a standard which applies industry-wide based on a principle of equity agreed between the parties and applied by the HSE outside the Agreement.  A parallel agreement was also secured with Medicines for Ireland (“MFI”) on behalf of the generic and biosimilar industry in Ireland.  This four-year MFI Agreement runs from 1 December 2021 to 30 November 2025 and, like the IPHA Agreement, provides for enhanced price cuts in the case of generic and biosimilar medicines.

Model Clinical Trial Agreement

On 2 December 2021, the IPHA published the final version of model Clinical Trial Agreement (“mCTA”) for use between clinical trial sites and sponsors in Ireland[2].  The originator biopharmaceutical industry has introduced the initiative to accelerate the conduct of clinical trials and increase the number of them carried out in Ireland.  While the use of standardised site contracts for clinical trials are commonplace in several other EU member states, the mCTA is a first in Ireland.  Until now, companies had to negotiate individual clinical trial agreements with hospitals and other institutions.  Changes to the standardised mCTA will not be allowed, which will reduce the administrative and financial burden for both hospitals and companies, reduce divergence in clinical trial agreements across the industry and speed up the performance of clinical trials.

The support for innovative new medicines in the IPHA Agreement and the standardisation of clinical trial agreements are welcome developments in Ireland and demonstrate the industry’s ambition to become a leader in medical innovation and clinical trials in Europe.

Please contact Kate McKenna or Emma Doherty in Matheson’s Life Sciences Team with any queries.

[1] The IPHA Agreement is available here.

[2]  The mCTA is available here.