Journal Article

Availability and pricing new medicines in Ireland: reflections and reform

July 5, 2017


This paper argues that the current method of determining the availability and pricing of new medicines for public reimbursement in Ireland likely results in too large a share of public healthcare expenditure allocated to medicines. Resources are misallocated. Welfare is lowered. In contrast to some other areas of public healthcare, patients exercise ‘voice’ rather than ‘exit’ concerning the public provision of high-cost new medicines. Setting publicly agreed cost-effectiveness thresholds, with clear predictable criteria for when the cost-effectiveness thresholds can be exceeded, would contribute to the creation of a more appropriate new medicine decision-making framework. It would incentivise suppliers to set prices consistent with the decision-making framework. Guidance and clarity raises the possibility of shielding the Health Service Executive, the decision maker, at least partially, from the pressure to fund expensive new medicines that lack cost-effectiveness, while at the same time increasing transparency and predictability.