Evaluating Orphan Drugs: Discussion

The purpose of this session is to engage with the HSE and the National Centre for Pharmacoeconomics, NCPE, on the processes and criteria used when evaluating orphan drugs. On behalf of the committee I welcome Mr. John Hennessy, Mr. Shaun Flanagan and Mr. Ray Mitchell of the HSE; Professor Michael Barry and Dr. Lesley Tilson of the NCPE.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statement submitted to the committee may be published on its website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. I now invite Mr. John Hennessy to make his opening statement.

Mr. John Hennessy

I thank the committee for the invitation to attend the meeting this morning to discuss orphan drugs. I am joined by my colleagues - Professor Michael Barry is clinical director of the National Centre for Pharmacoeconomics, Mr. Shaun Flanagan, who is on my left, is the chief pharmacist in the HSE corporate pharmaceutical unit, Dr. Lesley Tilson is from the NCPE and Mr. Ray Mitchell is from the parliamentary affairs division of the HSE.

The HSE is responsible for the reimbursement of medicines under a number of statutory schemes, such as the GMS, general medical services scheme or the medical card scheme, the long-term illness scheme and the drugs payment scheme. With the inclusion of medicines purchased for hospital care, the expenditure on drugs and medicines by the HSE comes to approximately €2 billion per annum. That is approximately 13% to 14% of the total health budget.

The legislation which deals with applications for the reimbursement of new medicines is the Health (Pricing and Supply of Medical Goods) Act 2013. This Act requires the HSE to consider detailed criteria when making decisions around reimbursement and pricing. Specifically, section 19(4) of the Act states: "The Executive shall not make a relevant decision except in accordance with the criteria specified in Schedule 3". Schedule 3 goes on to list the criteria as follows: first, the health needs of the public; second, the cost-effectiveness of meeting health needs by supplying the item concerned rather than providing other health services; third, the availability and suitability of items for supply or reimbursement; fourth, the proposed costs, benefits and risks of the item or listed item relative to therapeutically similar items or listed items provided in other health service settings and the level of certainty in relation to the evidence of those costs, benefits and risks; fifth, the potential or actual budget impact of the item or listed item also has to be considered; sixth, the clinical needs for the item; seventh, the appropriate level of clinical supervision required in relation to the item to ensure patient safety; eighth, the efficacy or performance in trial, the effectiveness or performance in real situations, and added therapeutic benefit against existing standards of treatment, that is, how much better it treats a condition than existing therapies; and ninth, the resources available to the HSE to afford the application.

My colleague, Professor Barry, will go through the application process in more detail. The process for dealing with applications for a new medicine typically involves the following stages. The HSE corporate pharmaceutical unit receives the application from the pharmaceutical company, as per section 18(1) of the Act. The corporate pharmaceutical unit commissions the NCPE to conduct a health technology review of the new medicine. The medicine is subjected to a preliminary rapid review. High-cost products and those with significant budget impact are subjected to formal pharmacoeconomic assessment. Similarly, products where concerns arise in relation to value for money are selected for formal pharmacoeconomic assessment. All such assessments are carried out in compliance with published HIQA guidelines. Companies submit a dossier for consideration, that is, the company gets the opportunity to put forward its best case for consideration by the NCPE. Following assessment, a full appraisal report outlining the NCPE conclusions and recommendations is sent to the corporate pharmaceutical unit. The appraisal report sets out detailed information on the clinical evidence for the benefits associated with or claimed for the new medicine and the robustness of that evidence.

Information is provided on cost-effectiveness and the probability of cost effectiveness at a range of thresholds. Some examples are provided in the note. For example, €20,000 per quality adjusted life year QALY; €45,000 per QALY; and €100,000 per QALY. Occasionally even higher thresholds are also provided. Perhaps one of my colleagues will explain the concept of a quality adjusted life year as members may not be familiar with the terminology. In the case of oncology drugs a report is also sent to the national cancer control programme, NCCP, for consideration under the NCCP therapeutic review process. The corporate pharmaceutical unit leads on any commercial negotiation with the individual pharmaceutical company.

The full assessment report, the outputs of any commercial negotiations and any other relevant information is then considered by the HSE drugs group, which is the expert body in place to make recommendations to the HSE leadership team on applications for new medicines. The HSE leadership team or directorate is the final decision-making body on applications. Following that process the Act requires that the HSE provides a formal notice of any proposed decision to the applicant company and requires that the HSE considers any representations received from an applicant company in advance of making a formal final decision on pricing and reimbursement.

The legislation passed by the Oireachtas in 2013 does not make separate provision for orphan drugs. Consequently, the processes and procedures do not make separate provision for distinct criteria on the assessment of orphan drugs. However, the HSE has in the past been an early adopter of new medicines, including in this category, and especially where clear evidence of clinical benefits to patients can be demonstrated and value for money assured. The HSE is committed to providing access to as many medicines and other services as possible from within the resources available.

Internationally, there appears to be a growing trend towards providing market authorisations on the basis of evidence which previously might have been insufficient to support authorisation. In parallel, greater responsibilities are also being placed on health services to ensure that cost effectiveness is clearly considered as part of the assessment process. The criteria include reference to that. The challenge for reimbursement agencies such as the HSE is that the evidence on efficacy, cost and budget impact is often less than sufficient to determine such cost effectiveness.

In addition, the pricing strategy adopted by some pharmaceutical companies adds to the challenges, with prices demanded often running to hundreds of thousands of euro per patient per annum. On occasion, these prices can be demanded for medicines for which there may only be preliminary clinical information available to support the benefits claimed. That is leading to serious affordability problems for health services in Ireland and internationally.

My colleague, Professor Michael Barry, from the National Centre for Pharmacoeconomics will outline further details of the health technology assessment, HTA, process, after which we will endeavour to answer any questions the committee may have.

I thank Mr. Hennessy and invite Professor Barry to make his opening remarks.

Professor Michael Barry

I thank the committee for the opportunity to speak to it today.

The mission of the NCPE is to facilitate health care decisions on the reimbursement of technologies, usually pharmaceuticals, by applying clinical and scientific evidence in a systematic framework, in order to maximise population wellness.

The NCPE considers the clinical effectiveness and health related quality of life benefits in addition to all relevant costs, including costs that arise from savings from reduced health care resource use, for example, hospitalisation, following the new technology. We also then try to assess whether the price requested by the manufacturer is justified. The NCPE will then advise the HSE on the cost effectiveness or value for money and the budget impact associated with the specific product.

A medicinal product is designated as an orphan medicinal product if it is intended for the diagnosis, prevention or treatment of life threatening conditions affecting no more than five in 10,000 persons in the European Union at the time of submission of the designation application. The NCPE has a standardised process and criteria for the evaluation of pharmaceutical products, including orphan drugs. All assessments are conducted in accordance with published health technology assessment, HTA, guidelines issued by the Health Information and Quality Authority, HIQA. These guidelines were first developed in 2010 and updated in 2014. They are available on the HIQA website.

The NCPE HTA process is well established and usually commences when the relevant pharmaceutical company receives notification from the HSE corporate pharmaceutical unit, HSE-CPU, of the requirement for a rapid review. A rapid review is a quick look see, as it were, looking at the benefits and otherwise of the medication, to assess if we must examine it in more detail. The manufacturer submits the rapid review document, and the template is available on our website. That will include a range of information, for example, the regulatory status, the clinical condition, the proposed licensed indication, anticipated place in therapy, comparators, clinical evidence, safety, efficacy in addition to economic considerations. It is a wide range of information. The NCPE reviews this document within four weeks, and we usually are on time with that, to determine whether a full pharmaco-economic assessment is required. If it is not required the medication is usually reimbursed. The data from 2010 to 2015, which was published recently, shows that approximately 50% of products do not require a full assessment and therefore go straight through to reimbursement. That means 50% will have to be looked at in detail.

If a full pharmaco-economic assessment is required the manufacturer is asked to submit a full dossier to the NCPE. The application forms are on the website. A full HTA investigates in detail the value for money proposition associated with medications. Orphan drugs are assessed in the same way as other medications. The assessment includes a description of the relevant condition, its management and a detailed outline of the intervention under assessment. The clinical evidence supporting the efficacy of the product is reviewed. The manufacturer is required to outline in detail the health economics relating to the product and provide an estimate of the incremental cost effectiveness of the drug, in other words, what the added benefit is for the increased cost associated with that product. A budget impact analysis is also required in respect of the cost effectiveness analysis.

The HTA submission process also facilitates submissions by patient groups who wish to have their views taken into consideration. The patient group submission template is also available on the NCPE website. Having reviewed all the available documentation the NCPE submits its report to the HSE corporate pharmaceutical unit following a check for factual accuracy by the manufacturer. The manufacturer gets our report before we send it to the HSE to ensure that we are factually correct.

Examples of orphan drugs that have been considered by the NCPE include: agalsidase alpha, Replagal, and agalsidase beta, Fabrazyme, for Fabry disease; eculizumab, Soliris, for paroxysmal nocturnal dyspnoea and haemolytic uremic syndrome; ivacaftor and Orkambi for cystic fibrosis; elosulfase alpha, Vimizim, for Morquio A syndrome; human alpha 1 proteinase inhibitor, Respreeza, for emphysema in adults with documented alpha 1 proteinase inhibitor deficiency; and more recently migalastat, Galafold, for Fabry disease.

The HSE-CPU will forward the NCPE report and any other relevant information to the HSE drugs group. The final decision on reimbursement of any drug, including orphan drugs, is made by the HSE, not the NCPE.

Thank you. Six members of the committee have already indicated they wish to put questions. We will take them in batches of three. That is not an ideal system so I ask the witnesses to take a note so they can reply to everybody. This is a detailed subject and we can take our time and get the answers. However, when the questioners are in batches sometimes the first questioner does not get their replies, so I ask the witnesses to take a detailed note of the questions. I call Senator Colm Burke.

I thank the witnesses for attending the meeting and giving us the detailed presentation. This is a complex area. My opening question relates to the population of Ireland and the overall cost of medications compared to other jurisdictions. Is there any comparison for what pharmaceuticals are costing us per head of population? The witness referred to a budget of approximately €2 billion per annum. How are we doing per head of population compared to other juridictions?

Second, I understand that there are approximately 158 different orphan drugs and that in Germany 133 of them are in use, whereas in Ireland only approximately 50 of them are in use or have been sanctioned for reimbursement. Why is there such a gap between what has been approved for use in Germany and what has been approved for use here?

The third issue relates to legislation we passed in 2013 on the use of generic drugs, which Mr. Hennessy mentioned. What savings have been made as a result of that legislation? What progress have we made in that regard? If we can save in one area obviously there is more funding available to deal with an issue such as orphan drugs.

My final question is on working with other countries. I made a comparison with Germany. The advantage Germany has is its population. An orphan drug might only be of benefit to 20 people in Ireland but it might be of benefit to 2,000 people in Germany, therefore Germany is in a far better negotiating position. Has there been thought about tying in with other jurisdictions with regard to carrying out a negotiation and getting a far fairer deal in that process?

Again, I thank the witnesses for their presentation and the work they are doing.

I, too, thank the witnesses for their contributions. I wish to follow up on Senator Colm Burke's remarks. It appears that there is evidence of some type of scandal, moral or otherwise, here. We have the ironic situation that drugs that are sometimes manufactured here are available to people in other EU countries, and reimbursed by their governments, but they are not available to patients in Ireland. Can the witnesses explain what is at the root of the differentials? Ireland ranks extremely low compared with Germany, as Senator Colm Burke mentioned, France, England, Italy and Spain when one compares the access to orphan medical products. The figures show that 53 of the 148 licensed products are routinely available in Ireland. That is approximately one third. Vastly more of such treatments are available in Germany. Noting the irony that some of these drugs might well be manufactured in Ireland, what is the fundamental reason for that?

To move on from that, there is an EU regulation on orphan medicinal products. Is there a need to move to a European standard or a harmonisation where we accept drugs that are accepted, made available and funded in one member state for people who are in the very disadvantageous situation of having a rare disease? It is therefore much more difficult to do the types of tests for cost effectiveness involving these people.

Should we be moving towards a kind of harmonisation and an acknowledgement that if a medicine is available in other states, it ought to be available here? Through the State-funded National Treatment Purchase Fund, people are able to access treatments unavailable in Ireland. It should follow that if licensed, proven medical products are available to people in other European countries, they should be available here.

The failure to progress aspects of the national rare disease plan is at the root of this issue. The plan dates back to 2014 and envisages a pathway for the assessment of the orphan medicinal products. What is the reason for the delay? Could the witnesses give a timeline for the activation of relevant sections of the plan in order that this problem can be tackled?

It is not just a matter of fewer products being approved. There is also a much greater delay for people to access new orphan therapies. It takes 50% longer than for traditional medicines. That adds to the unfairness faced by those suffering from rare diseases who, in many cases, will have a very short lifespan.

I thank the witnesses for their attendance. The first issue about which I am concerned is the profitability of orphan drugs. While I do not have it to hand, a recent article in the Financial Times showed a surge in profitability for investors in orphan drugs. Although the ratio of orphan drugs to mainstream drugs is approximately five to 10,0000, there may be a risk that investors will move to invest in orphan drugs and that general drugs for the bulk of the population will be somewhat neglected and progress in treatment of common diseases will be halted. Have the witnesses any comment on that possibility?

Senator Colm Burke mentioned savings in regard to generic versions of drugs. I am a pharmacist by profession. When I qualified 13 or 14 years ago and returned to Ireland from the UK, there were practically no generic drugs available here and pharmacists were precluded from substituting. That has since changed. At the time I qualified, a box of Lipitor cost approximately €110 whereas a generic version of it now costs approximately €10. However, when one compares the saving achieved there to the cost incurred through funding an orphan drug for one person, there is no overall saving. Savings achieved through the use of generic drugs will never compensate for the cost of orphan drugs.

There are huge global variations in the price for hepatitis treatments. How does a company that has produced a drug, trialled it, done all the work on it and spent all the money on it justify the price differences? How can we ask to these companies why it costs one fiftieth of the Irish price in Ethiopia? How can that be managed to the benefit of the Irish people?

I am delighted that people have received Orkambi. Ireland has a unique relationship with cystic fibrosis and a unique solution therefore had to be found. However, the annual cost of Orkambi is approximately €300 million, which is equivalent to the cost of building the new maternity hospital. I may be wrong, but I understand the annual cost of treating patients receiving Orkambi is the same as building a new maternity hospital every year. I am concerned------

The State will be lucky if it builds the new maternity hospital for that cost.

I am concerned by the overall effect of that on HSE budgets. Would it be possible for drug purchasing to be completely separated from HSE budgets in order that there is not a constant pull and it could be isolated in order to track spending in that regard?

Is there any role for extended patents? Nine years was the period for patents. Is that period still being extended in order to allow companies recoup their costs in order that the effect on the Exchequer can be spread over a longer period of time? There should be little need for a generic version of an orphan drug because the population base is not big enough. Is there any sense in giving companies an extended patent because there will not be a generic version of the drug and therefore spreading the cost over a few decades rather than one?

Could any of the witnesses address the savings and workings of the Irish Pharmaceutical Healthcare Association, IPHA, framework agreement on the supply of medicines to the public health services and the effect it is having in regard to hospital budgets?

A broad range of questions have been asked. I ask witnesses to do their best to answer. The asking of questions in batches is not ideal but it is the procedure of the committee. I ask witnesses to try to answer all questions posed.

Mr. John Hennessy

We will attempt to do so. I will rely on my colleagues to provide some finer details.

Senator Colm Burke asked about the population issue and whether our prescribing levels and costs are comparatively high. That has traditionally been the case and our average costs and expenditure on medicines per head of population have been comparatively high. Whether that is currently the case is less certain. The situation may be changing. The previous Joint Committee on Health published a good report in 2015 that analysed this issue in detail. The changes that have occurred since then are mainly related to the switch to generic medicines, as mentioned by members, which has had an effect on average costs. Some of my colleagues may be able to provide further detail on that issue.

I ask Mr. Flanagan to address the issue of the difference in how Germany deals with applications for new drugs compared to other jurisdictions.

Mr. Shaun Flanagan

The cost of orphan drugs is automatically reimbursed in Germany. There is no assessment or review and the drug is just paid for. That is how Germany is different in that regard. Ireland has a different legislative framework which requires that the criteria that Mr. Hennessy has previously set out be considered. The Germans automatically pay for orphan drugs.

I am not familiar with the figure of 158 orphan drugs that Senator Colm Burke asked about. I recently downloaded information from the European Medicines Agency and thought it mentioned a figure of less than 100 orphan drugs but I am open to correction on that. It is not a very recent work. I am happy to deal with any query in that regard when I have had a chance to examine the issue further following the meeting.

In regard to savings from generic drugs, €250 million has been saved since 2013 under the reference pricing generic substitution programme in the Health Act.

In terms of international negotiation, my colleagues in the Department of Health are not in attendance but they made efforts to engage with international colleagues in relation to negotiation during the year-long process in regard to Orkambi. It was difficult to get countries to align on the same criteria for all to agree on the decision point. The Department is continuing to engage internationally on that issue to try to get involved in international co-operations. That is actively being worked on. I should not speak for the Department but I am aware it is progressing that issue.

In terms of international comparisons, as Mr. Hennessy said, the OECD publishes data sets regarding purchasing price parities and the cost of medicines reimbursed per patient on an annual basis. As the purpose of today's meeting is mainly to deal with rare diseases, I did not research this particular issue beforehand. I think the most recent data is from 2013 or 2014 and Ireland was at the top in terms of spending per patient.

Those figures did not capture the impact of the Health Act. They also did not capture the fact that prior to 2005 and the setting up of the HSE, the State never challenged pharmaceutical companies on new drugs. At one level, one could argue that prior to the introduction of these processes we were price takers. We are no longer price takers. We seek to aggressively negotiate with pharmaceutical companies when they bring a new drug to market because we know we have a limited budget. The only way we can spread the budget as far as possible is to get the best price we possibly can for every new drug. I assume that is the reason why the Oireachtas requires us to consider cost-effectiveness and budget impacts.

Senator Mullen raised the issue of harmonisation and negotiations. One of the big challenges for harmonisation of decision-making is that not every country may be able to afford the same levels of investment. If a country is signing up to German levels of involvement, it must sign up to German levels of investment. Whether Ireland has those resources available to it as a State is a question I cannot clearly answer. It is a political question rather than a HSE one.

On the national disease plan, in terms of moving and changing the assessment processes around new drugs, as a public servant I would say the Health Act is clear. It has not made any changes that allow the HSE in any way to treat orphan drugs any differently to other drugs. If the view of the Oireachtas is strongly that there should be a separate process, there will be a requirement for legislative change. It is something we have to say. In terms of the 50% longer than ordinary delay in time on orphan drugs, there is no doubt orphan drugs are more challenging for an assessment body to consider. As the levels of evidence are on occasion less robust than they are for other medicines, they present challenges for decision-making bodies but they also come with significant budget impacts. Orkambi was for a rare disease but it came with a budget impact worth hundreds of millions over five years. Decisions to fund such drugs have implications for the rest of the service. Those are decisions that have to be made carefully after robust engagement from pharmaceutical companies on the price and offering they have made.

I will keep going down through the list of questions.

Mr. John Hennessy

I might deal with the savings issue to give Mr. Shaun Flanagan a chance to draw breath. I might ask Professor Barry to elaborate a bit more on the rare disease plan as well.

Senator Colm Burke and Deputy O'Connell raised issues about savings and what has been achieved under the 2013 legislation. I will give the committee a flavour of that. The big change in the 2013 legislation was the enabling of reference pricing. To date, more than 40 products have been reference priced in Ireland with price reductions of up to 90% achieved on many of the commonly prescribed items. The overall savings achieved under reference pricing to date since the Act was commenced are in excess of €120 million. Generic prescribing, where it is appropriate and empowered, is in excess of 70% compared with approximately 30% as recently as five years ago.

On the various price agreements with the pharmaceutical industry, which have been involved since 2006, our calculation of cost reduction and cost saved in the period from 2006 to date is €1.5 billion. The current agreement, which is scheduled to run to 2020, is expected to produce savings in excess of €600 million by our calculations. While IPHA companies will assess it as being slightly higher than that, we assess it at about €600 million.

Could Mr. Hennessy explain the difference between the two different assessments and how IPHA's figure is different from the HSE's?

Mr. John Hennessy

I wish I could.

Mr. Shaun Flanagan

I can try to answer that. The HSE looks at the reimbursed market; I am guessing the IPHA looks at the entire market. The HSE does not pay for every medicine in the State. I am assuming the IPHA estimates take account of the fact that their companies are taking a hit of that amount in the private market. That may contribute to some of the difference. There are two savings that are arrived at independently. IPHA did its bit and the HSE did its bit. Clearly, the HSE would always have to be conservative and absolutely certain that it will deliver what it says it delivers because it has implications for health pricing. It might very well be in another party's interest to be conservative the other way. Both parties will always be conservative within their own constraints and decision-making. There is a public market and there is a private prescription market as well and IPHA companies will take a hit there from price reductions. There is no doubt about that.

Senator Burke wants to come back in at this point.

On generic drugs, are the witnesses telling me that in the past three years, there has really only been a saving of less than 10%? It is €2 billion per annum and if we take €120 million out, is that €120 million over three years or €120 million per annum? If it is €120 million per annum then it is a minute saving of around 8% out of €2 billion.

Mr. Shaun Flanagan

It is important to remember that 70% of the HSE spend is on medicines from monopoly suppliers. Generic substitution cannot help in a scenario where monopoly suppliers are available. There can only be generic substitution in an area where there are competitive companies.

In real terms then, we are making no progress on drug cost savings for the HSE.

Mr. Shaun Flanagan

I addressed the challenge in my initial responses to the Senator's question. There are two good points at which we can impact on the cost of medicines. The first is on introduction, because we control when we put it on and ultimately control the price in a negotiation. The learning historically is if one does not challenge companies when one introduces medicine, one pays for that over a decade or longer while the company has patent control. Within our medicine containment policies, an essential part is we must challenge companies when they are applying for reimbursement. We must do our best to attack unreasonable and unfair pricing. If we do not do that, we will be left in a scenario in which we are overpaying for medicines for a decade.

The second point is when a medicine goes off patent. There is then an opportunity because suddenly competitors come in. The competitors can be leveraged in and within that the reference pricing and generic substitution can impact. Within the agreement, as we moved from 2006 to 2016, we moved from a scenario where we had a five-country basket to one where there is an average of 14 countries, which is very close to what the previous committee recommended. That basket now includes countries such as Portugal, Italy and Greece, which are low price countries. That impacts on the price of the medicines that are coming to us and has a long-term life cycle impact on the price of medicines. We have made very good efforts to reduce the cost of medicines both at the start and at all the trigger points where we have leverage. There can always be improvements.

My problem is that per head of population, we are paying far more than an awful lot of other EU jurisdictions. When one goes back to the German situation, the Germans are not paying out the price the pharmaceutical companies are asking for because they can strike a very good bargain because they are dealing with a bigger population. We seem to be coming out of the wrong end when we are negotiating for orphan drugs because we have far fewer numbers who can benefit from the medication so the drug companies are very much in the driving seat. It is a huge problem. It is a case of trying to find a solution.

The Senator has made that point. Can we resume going back through the questions and then the Senator will have an opportunity-----

Can the answer given to me also be clarified please?

Okay, that is fair.

Mr. John Hennessy

I do not agree with Senator Colm Burke and his conclusion because very considerable progress has been made on generic substitution. It is constrained as Mr. Shaun Flanagan mentioned. Products have to be declared interchangeable in order for generic substitution to apply. Anybody who regularly purchases some commonly prescribed drugs and medicines will have seen the vast change that has occurred in the cost over the past three years.

On the point about the international dimension, which was mentioned by Senators Colm Burke and Mullen, the Minister, Deputy Harris, and the Department of Health have been making considerable progress on this with colleagues within the European Union. The size of the Irish population and the jurisdiction are factors and perhaps opportunities of scale can be achieved by collaborating with other smaller States. It is at preliminary stages.

Progress is being made and this clearly represents an opportunity for smaller states with smaller populations. This is probably still in its early stages, however. Part of that agenda would presumably facilitate the adaption of certain European standards. There might also be possible economies of scale with regard to assessments, as these could be carried out on a collaborative rather than an individual basis with each member state.

I will ask Professor Barry to come in at this point to talk about some of issues around rare diseases and the rare disease plan, with particular regard to the time involved in assessing and processing applications for new drugs.

Professor Michael Barry

Our assessment process has been in operation for approximately 19 years now. There is no doubt, however, that things have changed significantly in recent years. In 2012, we looked at about 20 products between rapid reviews and full HTAs. This year that figure will amount to 70 or more, which has been the case for the past three years. We are seeing an avalanche of newer, high-cost medicines. We are about to assess our first product to cost €1 million per patient per year. That gives the committee an idea of the challenges we face.

It is important to consider that, because of the NCPE process and the subsequent follow-up with the HSE, we are regularly able to achieve price reductions on products of between 20% and 50%. That is money that is now available to go into other areas in the health service.

Deputy O'Connell spoke about the cost of orphan drugs. As I mentioned, we are now facing our first drug to cost €1 million per patient per year. I do not know where these costs arise from so I cannot say if they are justified. That is what we are dealing with.

Orphan diseases are, by definition, rare but taken together they are not so rare. More than 50% of our current assessments are for orphan drugs, while a total of 80% are for orphan and cancer drugs. That should point to where the major areas lie. Matters are growing more complex because these are new biological medicines rather than the simple molecules we used to deal with before. Getting back to rare diseases, I am aware of the rare diseases plan and of recommendation No. 30 in particular, which highlights whether we can carry out the assessment process for orphan drugs in a better way. The answer to that is yes, we can always improve our processes. With that in mind, we are establishing a rare diseases technology review committee. I was asked to chair this and I agreed to do so in June of this year. The idea is that this committee would look not only at the methodologies for assessing orphan drugs but also at the views of patients, caregivers and at the wider societal issues that go into health technology assessment. We are only just in the process of establishing this committee but it is a welcome development.

Mr. John Hennessy

In response to some of the points raised by Deputy O'Connell, I will now ask Mr. Flanagan to discuss the issues around prioritising rare conditions over more common ones, the justification for the cost factors, and the extension of patents for rare diseases. I would also like to clarify that while cystic fibrosis medicines are certainly extremely expensive, they do not quite amount to the annual cost of running a maternity hospital.

Can I just come in to clarify a few matters?

Very briefly, Senator Mullen. Other people are also trying to get in.

I understand that and I will be very brief. Is Mr. Flanagan saying that legislation would be needed to activate the OMP assessment pathway envisaged in the 2014 national rare disease plan? If not, are there any remaining obstacles? Is there unfinished work set out in the plan that ought to have been completed by now? Were Ireland to match Germany in the provision of orphan medicines at the same price currently paid by the Germans, do the witnesses have an estimate as to how much that might cost?

I am going to ask Senator Mullen to hold his questions for now because other members have indicated and I know they are under time pressure.

I will be brief because both of my questions have already been asked. It is not like me to be brief, Chairman.

I did not say that.

I thank the witnesses from both bodies for their honesty in answering our questions, as this is obviously a very emotional topic. I will digress here slightly. There are media reports out today about the drug Entresto. The issues around this particular drug have been talked about for some time now. Seeing as they are here with us today, perhaps the witnesses will clarify the situation because we need to get to the bottom of this and this is a life-changing drug. On what date did the NCPE pass Entresto? When did the HSE receive that recommendation? When did the HSE pass that recommendation on to the Minister? Is it true that it took ten months, and if so, why? Is it true that the HSE claims it cannot afford Entresto? If that is the case, that is fine, but it means the Minister must make a decision on this. A total of nine drugs were passed together and the Minister said that they would cost approximately €120 million, although I do not want to misquote him here. Of those nine drugs, is it true that this drug is cost-effective? If it is, that differentiates it from everything else.

The figures I have gone through indicate the cost of the drug amounts to less than €5 a day, adding up to approximately €1,700 a year per patient. We are looking at approximately 20,000 patients. The real issue for me is that the average cost for someone who has to go into hospital with cardiac problems amounts to approximately €8,700 a year. We get figures all the time at this committee. The differential here amounts to more than €6,000, meaning that the new drug is cost-effective. It has been passed across a whole range of other European countries and has also been passed at rapid speed across all states in the US, which is in itself quite unusual. Not alone will this drug help approximately 20,000 patients in Ireland change their lives, it will also save the taxpayer money. I ask the witnesses to tell me please if I am wrong on any of this. We need to get to the bottom of what is going on here, so we need the dates of when this was passed, why the HSE took ten months if this is in fact true, whether it has been referred on to the Minister, whether the witnesses have any awareness of where the matter stands, and whether it is cost-effective and life-changing compared with other drugs.

When the HSE says it cannot afford certain drugs, it can pass the matter on to the Minister to make a decision. I understand the Minister's situation and the difficulty around having to fund a range of different drugs. A package of nine drugs has supposedly been referred on to him. If there a serious cost attached to these drugs, that has to be taken into consideration. What I want to tease out, however, is if the differential involved makes the drug cost-effective and it will help 20,000 people, why did it take so long, from July of last year to May of this year, for the HSE to pass this on to the Minister on the grounds that it could not afford it? Why did this take ten months? How many people in this country have been affected by this, and possibly even have died, while this vacuum has been in place?

I welcome the witnesses and thank them for attending the meeting. I have some general questions. We have heard that approximately 14% of the health budget is spent on drugs. Could we get a breakdown of how much of that 14% is spent on high-tech or orphan drugs in order that we can make comparisons?

Could Professor Barry tell us where we lie in comparison with other EU countries on drug spend and high-tech drug spend? The German model has been mentioned. Once a drug has been approved by the European Medicines Agency, EMA, it is available and the price is negotiated. A drug would often be paid for at a specific rate and between ten and 18 months later a price would be agreed and the company would reimburse the state any overpayment. German people and governments are known for their efficiency. A model based on that one would be well worth considering, even if we need legislation to introduce it. We need to do something about orphan drugs. There are many patients with different conditions who are as deserving of care as any other citizen and we have a responsibility to provide that.

How many people work in Professor Barry's office full time to back him up in the important work he does? How often do they meet to decide on specific drugs? Deputy Kelly referred to delays and the feedback we get is that it takes a long time to get a decision over the line. If that has to be reviewed the process takes an inordinate length of time. When Professor Barry started out he was considering 20 proposals a year, now he is considering 70. Have his resources increased in the same proportion? If not they should. Those issues are interlinked.

A compelling case has been made to me about Respreeza-Alpha 1. One of my constituents has the condition and I have met others who are on the drug and those who are not. Even speaking to people a doctor could tell automatically if a person was taking it. The difference in their quality of life is huge. I cannot stress enough the importance of getting that drug over the line. When will the decision be made on that?

Does Professor Barry interact with, and refer back to, the many patient advocacy groups? They do a great deal of valuable hard work and I sometimes get the impression that when a decision is made, the drug company is informed and they are left out of the loop. That needs to be corrected. All advocacy groups need to be kept informed as fully as possible.

I concur with many of the points my colleague mentioned, particularly in respect of Respreeza. It is bad enough to have a chronic obstructive pulmonary disorder, COPD, condition due to smoking but it is a terrible condition to have as a result of alpha-1-antitrypsin deficiency. I would also like a timeline for when that product may be available.

I know there was some discrepancy about the savings mentioned. Approximately €150 million in savings was mentioned since the agreement with the Irish Pharmaceutical Healthcare Association, IPHA in August 2016. Since then only 11 medications have been approved for reimbursement. That seems a low figure. Can we do better? I take on board what Professor Barry said about dealing with 20 drugs in 2012 compared with 70 now. Does the National Centre for Pharmacoeconomics, NCP, need more resources?

The important point to remember about rare diseases is that they have very high mortality rates. Up to 30% of the kids with these diseases die before they reach the age of five. Treatment exists for only 5% of these patients. I understand that it can take up to 50% longer for orphan drugs to go through the process of reimbursement, even up to two years. The national rare disease plan identified the current process as disadvantaging orphan drugs. Are the HSE and the NCP tracking the time taken to reimburse medicines, orphan or traditional, from the initial application to the final decision and do they know the orphan status of the drug and the clinical data implications associated with such small patient populations when assessing the applications?

A point was raised about reimbursement and figures that I got in response to a parliamentary question indicate that there are nine drugs that have cleared the hurdle and await approval of some form from the Health Service Executive, HSE. That ties in with many of the questions being asked this morning. People who watch this process closely do not do it for fun. They do it because they have a vested interest in it because it affects a loved one. The questions about the nine drugs are similar. There are hurdles in place but when one thinks they are cleared the drug ends up on the Minister's desk or the HSE list which is approved but not reimbursed. Can the witnesses tell us, for the sake of those watching, particularly in respect of Respreeza, that when the hurdles have been cleared there will not be another hurdle or that the approval will not simply sit on another person's desk while people are in desperate circumstances.

Mr. John Hennessy

We will try our best to answer the questions and I will refer certain aspects to colleagues. We are very conscious of this and have huge sympathy for the patients caught in the middle of a dreadful situation. These patients and their families are desperate for solutions.

At the same time we have to strike a balance in that we must comply with legislation which obliges us to proceed or pursue a particular process. Unfortunately, that process takes time. There are some extremely difficult tests to be passed to determine clinical effectiveness and affordability, which is a hard reality. The legislation sets out the rules we must follow.

We have to follow it. The majority of applications get through and get approval, but we have to have regard to the resourcing and the availability of funding. Some previous speakers mentioned drug approvals this year. Six or seven new drugs have been approved already this year and are in reimbursement schemes. Approximately nine from the first half of the year will require additional resourcing to bring them into a reimbursement scheme.

I ask Mr. Hennessy to be very specific and not vague. When he says that we will require additional resourcing, is he saying that, as we sit here, the money is not available to fund these, so those people who are waiting for those nine drugs may as well forget waiting, because there is no point and that is not going to happen? Is it going to happen? Saying that there is a funding issue is not what people want to hear. They want to hear an answer in a fairly definitive way.

Mr. John Hennessy

I appreciate that, but the investment required for those particular nine drugs is €120 million over five years. That is a major investment.

Some €120 million over five years for all nine?

Mr. John Hennessy

Correct. I think, in fairness, it will require some time to secure the resources to afford to do that even where we would be keen and anxious to do it and where those clinical effectiveness and affordability tests have been passed.

Presumably they have passed the clinical effectiveness tests at this point.

Mr. John Hennessy

They have.

The clinical effectiveness test is not an issue. The issue then is the €120 million over five years.

Mr. John Hennessy

The issue is affordability, yes.

And that is all that it is?

Mr. John Hennessy

Correct.

Does Mr. Hennessy have any indication of whether it in the HSE's plans, budgets or is any movement going to be made in this regard, or will those nine drugs simply sit waiting? When Mr. Hennessy talks about effectiveness, outcomes and such, all of those hurdles have been cleared and now we find ourselves with nine drugs sitting somewhere in some sort of funding-related limbo which they may never get out of; Mr. Hennessy certainly does not seem very hopeful, unless I am misreading it.

Ultimately, is this a matter for the Department of Health?

Mr. John Hennessy

The honest position on this is that we have multiple demands on the health service, which I am sure the committee hears about all the time. This is one. There are many others. We go through an estimates process to secure resources in order to proceed with those and that is the position with regard-----

I asked a very specific question. Ultimately, the NCPE has passed these nine drugs. It would cost €120 million over five years, and I thank Mr. Hennessy for clarifying that. The NCPE has gone through its process and the HSE has gone through its process. The matter is now sitting on the Minister's desk. This is not a political attack and I ask that it not be taken that way. I know Mr. Hennessy has to do his job and is representing the HSE, which reports to the Minister. Ultimately, is the scenario that these are on the Minister's desk, and it is up to him, working with his officials, to make difficult decisions with regard to funding some of these? If that is the case, will Mr. Hennessy answer my question, which is that the drug I refer to, Entresto, which was passed by the NCPE-----

There is a large number of questions that the witnesses have to get through, and we will make sure that they are answered. I am conscious that there is another group of three, and one more Deputy indicating. We will go back to the questions. I ask the witnesses to focus on very specific answers.

On a point of order, how do the witnesses put a price on our lives? That is the question.

I ask the Deputy to hold his questions until we have a rota in operation.

Mr. John Hennessy

I think my colleagues will be able to help with the issue of putting a price on a life. We do not put prices on people's lives. I will not go into the specifics of any individual medicine because I am conscious that these medicines are going through a formal process, and a process of communication is required under the legislation with the companies.

That is not acceptable. I asked a specific question and I want an answer.

Mr. John Hennessy

I am not going to speak to a particular named drug in this forum. We have a process under legislation that we have to follow, and that requires communication with the pharmaceutical company.

That is not acceptable.

I do not believe that there is anything in legislation that precludes Mr. Hennessy from answering the specific question that was asked.

Mr. John Hennessy

I am answering the question but I will not be referring to a specific drug.

A specific drug was referred to, so, verbal gymnastics aside, I do not know how Mr. Hennessy is going to be able to answer the question without addressing the drug. It was Deputy Kelly's question and related to a specific drug.

Mr. John Hennessy

I can address the question without referring to a specific drug.

As long as the answer is about that drug and Mr. Hennessy does not name it, that is fine.

Mr. John Hennessy

There were nine products that I mentioned earlier that have been considered and have been through the formal process of assessment by the drugs committee and the leadership team. They all represent additional resourcing requirements, including in the current year. That resourcing is not in place in the 2017 HSE service plan, and additional resourcing will have to be found in order to proceed with implementation.

Mr. Hennessy still has not answered the question.

Mr. John Hennessy

I think I have.

Mr. Hennessy has not. Is this a cost-effective drug as recommended by the NCPE? If so, in that scenario, is that unique? Why has it not been funded?

Mr. John Hennessy

In order to come through the assessment process, they all have to be deemed cost effective, not necessarily by NCPE, but by the drugs committee. They have to be recommended for reimbursement, on balance, between effectiveness-----

The answer to that question is that this drug is cost effective, then.

Mr. John Hennessy

Will the Vice Chairman repeat the question?

I was surmising that part of the answer to the question is that the drug is cost effective. We can tick that box, that it is cost effective.

Is Mr. Hennessy saying that every drug recommended by NCPE is cost effective?

Mr. John Hennessy

I ask Professor Barry to answer that.

Professor Michael Barry

Drugs can come through-----

Professor Barry does not work for the HSE, so maybe he might elaborate on the questions that I asked, because they do not always have to be answered by the HSE.

Mr. Shaun Flanagan

I think it is important that we all understand the difference between cost effective and cost saving. Cost effective means that, in the course of normal events, it is a reasonable additional investment to make. It does not mean that there is a net saving to the HSE.

Fair enough.

Mr. Shaun Flanagan

That is the first thing. The matter of drugs within the HSE is not a binary cost effective "Yes" or "No" test. There is a list of seven criteria which the HSE has to consider. The HSE has to balance the magnitude of a clinical effect, of cost effectiveness, of the budget impact and of the unmet need, and has to try to arrive at a blended decision for a drug.

Is this cost effective?

Mr. Shaun Flanagan

It is a statement of fact - the NCPE website report is there - that Entresto is on the NCPE website as meeting the cost-effectiveness test, if one accepts that the cost-effectiveness test has a result of €45,000 per quality-adjusted life year. If that is the Deputy's definition of cost effectiveness, it is cost-effective.

Mr. John Hennessy

That does not mean that it can be afforded. It still represents an additional cost.

Mr. Shaun Flanagan

The NCPE website also makes clear that the budget impact is approximately €25 million.

To tease this out, are the witnesses saying that there would be no cost-saving?

Mr. Shaun Flanagan

There is an additional requirement - this is public knowledge, in the NCPE's published assessments - of approximately €25 million.

What about the stake-----

Mr. Shaun Flanagan

I am working from memory because it is not a rare disease drug.

I appreciate that, and Mr. Flanagan is not going to be locked in to what he said on that point. I am not going to hang him on that. Has he taken into consideration the saving in acute hospital expenditure because that drug is being used?

Mr. Shaun Flanagan

Absolutely, and the additionality is still €25 million.

Some €25 million?

Mr. Shaun Flanagan

Over five years.

We are going down the road of being very specific about one drug in this regard.

Does Professor Barry want to comment?

Will Professor Barry respond to that? Then we can move on to getting answers to the other questions that were asked.

Professor Michael Barry

I will be specific about Entresto. It is for heart failure. We started the assessment on 7 March and we finished it on 8 July. That took us four months, which is reasonably quick. That is our component of the delay. It was cost effective and I guess, as Mr. Shaun Flanagan was saying there, having taken everything into account, it was value for money. However, it requires additional expenditure and that is where the affordability issue comes in. The real issue here is that there are 40,000 people with heart failure. Some 20,000 would be eligible and 20,000 would not be. The issue then is to ensure that the appropriate patients get the drug and for it not to seep into the remainder of the 40,000. That is where the budget issue comes around, but it is right-----

And it is easy to distinguish.

Professor Michael Barry

Yes, in the sense that one would do an echo test of the heart and tell heart function. We can differentiate it and it is important to do that so as to ensure that, where there is a proven benefit, people receive it.

I am conscious that questions from Deputy Brassil and Senator Swanick have not been answered yet. The witnesses might address those, please.

Mr. John Hennessy

I might refer the issue raised by Deputy Brassil about whether the German assessment system is better to Professor Barry. I will also refer to him the issue of the resourcing of the National Centre for Pharmacoeconomics, NCPE, in which he probably has a personal interest.

Before I do that, I will make a point so that people do not get a different impression. Where possible, there is no attempt to hold back or slow down products. If it is possible to get a new product that will benefit patients into the system and into patients, we do everything we can to ensure that happens. This is particularly the case where new products substitute for existing ones where there is no affordability question. Our track record on that speaks for itself. Where it is clear that there is cost effectiveness and clinical benefits, but a substantial bill attaches, it represents a challenge to secure resources. Most people would understand that. The sums of money under discussion are enormous, running to hundreds of millions of euro, and investment is substantial. Sometimes, it takes a bit of time to secure the approvals and necessary resourcing.

Professor Michael Barry

Germany essentially has free pricing. One goes in with the price that one nominates and, as Deputy Brassil rightly said, that price lasts for a certain period, in this instance at least 12 months. There is a negotiation around the pricing. From our point of view, it is not a model to be followed. This is due to the significant budgetary issue with which it would leave us. For example, if we did not assess any medication in 2016, it would have added €1 billion over five years to the drugs budget. There are implications in following those patterns. There is heterogeneity throughout Europe in respect of assessments.

Regarding the NCPE, our rapid reviews are always done in under four weeks. We consider a drug, assess it and determine whether we are happy to recommend that it go through. No one could do it faster than that when one is examining upwards of 70 products.

As to full assessments, Entresto was done in four months, for example. The full assessment is a complicated procedure when large dossiers that are complex to analyse are received from the industry. Full assessments are usually done within six months. That is the approximate average. The process from market authorisation to the patient getting the drug slows down, and we take approximately six months out of that.

Regarding resources, we have three additional staff members compared with when I joined 19 years ago. A recent review suggests that we need nine additional staff members, particularly in technical areas because this work has grown quite scientific, with a great deal of mathematical modelling, statistical analysis and data analysis. These are the types of people that we want and we need more of them.

Outside, did Professor Barry say that his team had four people?

Professor Michael Barry

No. Our team comprises nine whole-time equivalents.

It needs nine more.

Professor Michael Barry

We cannot just go out and find these people. They are difficult to get, so we grow our own. Most of the people with us are our PhD students, who have thankfully stayed with us. Without them, we could not operate. It is as simple as that.

Have the nine extra members been approved?

Professor Michael Barry

No.

The NCPE is working at 50% of capacity.

Professor Michael Barry

There is no question-----

Actually, I will rephrase that. The NCPE needs 100% more staff to do the job required of it.

Professor Michael Barry

To be assured of meeting the timelines. For me, quality is probably important as well. As I always tell the industry, it is important to have quality people assessing its dossiers, in that it leads to a better outcome and the work is done properly. We have managed to keep to the timelines as much as possible.

What of a review of a drug that does not pass assessment?

Professor Michael Barry

Entresto did. With Respreeza, for example, we believed that the cost and health benefits did not match, in that it was not cost effective. Usually, that outcome sends the company into a negotiation with the HSE. As such, it is not a "No", but a recommendation. The HSE will follow up on that. This is often where the price reductions are obtained. One can achieve price reductions of between 20% and 50%, but not in all cases. As my colleague beside me who handles these negotiations will tell the committee, not all drug companies are prepared to negotiate in a meaningful way. That leaves us with a significant problem.

We make a recommendation. We usually know the price at which a drug would be value for money. That is the recommendation that we forward to the HSE.

Mr. Hennessy or Mr. Flanagan might say when there will be a further decision on Respreeza. A number of patients have been operating on a month-to-month basis, which is unsatisfactory, as the witnesses can imagine.

Mr. John Hennessy

The preliminary stages - the NCPE assessment, the drugs committee assessment and the leadership team - are done. This particular product did not pass the tests set out in the legislation or the criteria that I mentioned. It is at the final stages and a part of this involves an opportunity for the company involved to make representations. Those representations have been received and must be considered fully before the final decision is taken. We are at that point.

Mr. Hennessy was asked for a date. He said that the process was in the final stages. What does that mean?

Mr. John Hennessy

Within weeks.

I am in the final stages of renovating a house, and my view on how long that will be is very different from what the people who are building it believe it will be. How long is a piece of string? If the process is in the final stages, are we talking days, weeks or months and will Mr. Hennessy give us a date?

Mr. John Hennessy

We are talking weeks, by which I mean within three to four weeks.

I thank Mr. Hennessy.

Mr. John Hennessy

I might refer to the resourcing issue that Professor Barry addressed. It is an accepted fact that the applications are increasing at a phenomenal rate and that we must resource that process. We are in considerable dialogue with the pharmaceutical industry on this front, and the committee will appreciate that the industry is concerned that the system is not able to cope with the demand and volume. The HSE has made a clear commitment to resource the process well so that delays do not occur for the want of resourcing at that level. I appreciate that not too many of the type of personnel needed for this work are walking around looking for employment. They are not easy to secure.

Deputy O'Connell will ask the quickest question in the world. Two other members have indicated.

Some members have sought clarification.

We can revert to that.

Professor Barry referred to the complexity of the dossiers that the NCPE was receiving. Is there a set standard operating procedure by which companies submit information or does the NCPE just get a large box of stuff and has to root through it? If the approach is not streamlined, one can see how it might clog up the system.

Mr. Hennessy stated that some companies were not prepared to negotiate. Is that company specific or indication specific? Do some companies not play ball or do they view the Irish market as not being worth their while to reduce prices in respect of certain illnesses?

I thank the Deputy, who said that she would be brief. Senator Mullen asked a question, so the witnesses might address it. Three more members have indicated and will be taken next. The witnesses might keep their answers brief, but specific.

Dr. Lesley Tilson

We have a standardised format with regard to the dossiers that are submitted. The format is on our website so people can follow very formalised processes and criteria for submission. Notwithstanding this, there is a lit of variability within the dossiers themselves and what is submitted. We have regular communications with IPHA, the Irish Pharmaceutical Healthcare Association, the industry representative group, on all of that to try to ensure it is a standardised process as much as possible.

Professor Michael Barry

It is important to say that when we do the assessments we are tick tacking over with the companies that are, in general, very co-operative in this. Where we do disagree then at least we know where we disagree. That is the value of this system. It is very transparent and we know exactly what the sticking points are.

Mr. Shaun Flanagan

I may have confused the issue. I said that ultimately the decision-making process is formulated on the basis of the legislative process. On the issue of rare diseases process - which may be where the confusion relates to - there is a plan to change the rare disease process. Ultimately, however, the decision making around all drugs, including orphan drugs, is set by the Health (Pricing and Supply of Medical Goods) Act 2013. The HSE cannot make different decisions for orphan drugs. It must be considered under the same criteria. That is by way of clarification.

Is there undone work that was envisaged in the 2014-----

I must remind Senator Mullen that I am conscious there are people-----

I did ask the question very specifically. A lot of other extraneous issues have been brought up here. I am dealing with the issue of orphan medicinal products. I asked the witnesses if there is undone work in terms of the 2014 national rare disease plan and if this is the case, why? I also want to know if Ireland were to provide the drugs on the same basis as is done in Germany, so that the same number of drugs of the orphan medicine would be available, what would be the extra costs? I imagine it is some percentage of €1 billion, but would the witnesses know what the figure is?

Can I ask the witnesses to keep their responses as brief as they can because I am conscious that there are very patient committee members also waiting to come in?

Mr. Shaun Flanagan

The simple answer around the question of pricing in Germany is that the information is not available. I can tell the Senator that on the basis of the products we have in front of us to consider, if we had €200 million we probably would not have enough money over the next five years to say "Yes" to everything. That is pretty clear.

On the question of undone work, Professor Barry has outlined the main finding. I am responsible for the application process for all new drugs. I am not responsible for the implementation of the rare diseases programme. I am not part of the rare diseases programme. I am operating outside of my comfort zone here; I am here to discuss the processes and criteria used when evaluating orphan drugs. It is my understanding that in respect of drugs the outstanding action in the plan is a separate process that would involve a rare disease committee. Professor Barry has already described that and he has been asked to chair it.

Professor Michael Barry

The model of this committee is very much alongside the national cancer control, programme. When we do our assessments, for example, not only do we send our report to the HSE, we also send it to the national cancer control programme technology review group. That allows other stakeholders, especially clinicians with expertise in the area, to comment and to highlight unmet need or other areas that may not come out on a technology assessment. It is envisaged that the rare diseases technology review group or committee would behave in a similar manner. That would allow various stakeholders such as patients, patient groups, carers and clinicians to have a say in the process. We accept that ideally this would be done for everything.

I thank Senator Dolan and Deputies Murphy and Durkan for their patience.

I thank the Chairman. Patience is what it is all about today, in respect of patients waiting too long and the terrible situations they are in. Professor Barry stole a line from me when he said there is nothing rare about rare diseases. In round terms, how many people across their lives will have, or are likely to have, a rare disease? With scientific, technical and medical advances are there likely to be more people diagnosed with rare diseases over time?

I want to discuss timelines. Because of my own background with the disability movement, I know a lot of the people, patients groups and organisations. The representatives from the Alpha One Foundation and Muscular Dystrophy Ireland are coming in to the committee soon. The days, weeks and months matter in giving relief and in keeping and arresting the decline in quality of life for people. In other words, let us be clear and blunt about it; delays have economic and social consequences in the impact on families and family attrition. What can be done? Are there some ways to actually improve the timeliness? I am not long a member of this committee. I have been here for one year and I am struck by the timelines. Is it going to be drug by drug, patient group by patient group, year by year coming back in to the committee trying to sort it out case by case? A way has to be found. We would all be annoyed by that timeline but that is nothing to the impact it has on the people affected. There must be some better way. I am struck by the idea that there must be rare conditions across the cancer family but I am not hearing those issues getting raised in the same way I hear about these other conditions. Am I right or is there some aspect of how we deal with the cancer family that we are not bringing into play here? Maybe it is not as simple as that.

My final point is about the small numbers. It seems to be an issue. Consider the community rating. Rather than saying there are only so many with a condition would it be a fairer and more reasonable way to look at the issue by taking the burden off the two dozen or 200 people who have a condition in their families and say that the genetic cards could drop differently and this is something that could happen to anybody? Should we look at the basket and say that rare conditions are not so rare and could possibly become less uncommon in the future so we must take the burden of the costs off the shoulders of named people?

I invite Deputy Durkan, the master of brevity.

I thank the Chairman. I will do my best to keep up to that standard.

My first dealing with this particular subject was about 25 years ago, and it has not changed since. Then there were two aspects to it. One was the degree to which Ireland paid, above and beyond every other European country, for our drugs in general. We have added to that the orphan drugs and the high-tech drugs and I cannot understand it. We are playing around with the edges and we are not going anywhere fast. I do not accept the notion that we should have a quantum of 14 or 15 countries within which we should operate. We are within the European Union and the Single Market and that is the place we have to go. That is the place we have to be. That is the market that can negotiate with the pharmaceutical companies. Nobody else can do it to the same effect that the EU can.

I shall now turn to the issue of people who are dependent on high-tech drugs. What is actually happening is that the pharmaceutical companies create the drugs, create and feed the markets and then blackmail the governments in order to get what they want in return. Sadly, the patients are the jam in the sandwich. That situation cannot continue because it is unacceptable. I cannot understand why we are assessing these drugs ourselves. Why are these drugs not being assessed at EU level? Why not make one game of it all over and finish with it? The drugs are either acceptable and safe or they are not safe, in which case the European Union, with a market of 500 million people, is in a very good position to negotiate with anybody. There is no possibility that a countries the size of Ireland, Cyprus or the smaller countries of the EU are going to get any kind of fair play in dealing with that market situation. The only way it can be done is by simply invoking the Single Market and the power of the 500 million people. Is Ireland duplicating assessments that are taking place across the EU? I presume we are, we must be. Why is Ireland doing something ridiculous like that? Why does Ireland not engage with a central agency? There are many of them right across the EU.

Reference was made to Germany, which has a population of over 80 million. That is what the Germans are at. It is a bulk market that involves bulk buying. Why have we not invited ourselves into that circle? I know the Minister is very anxious to do that because I spoke with him about it and he is pursuing the matter. However, there are so many things to be pursued simultaneously and time is not on our side. Time is not on the side of the patients and those who rely on rare drugs to make life bearable. That is the issue. On leaving here today, will the witnesses engage with the pharmaceutical companies, through the medium of the EU, and cut out the nonsense about which we have been talking, namely, going round in circles and having this deal for one year and another deal for the next or putting in place an arrangement in respect of a particular drug for six months or a year. This is all nonsense and it is making us a laughing stock. When we are seen to be operating like that, we are noted for our weakness. When we are weak, we will not create waves anywhere. It is a simple and straightforward question. How soon can the witnesses do that to which I refer or are they in a position to do it? Can the HSE do it? Can the process be started now? In the context of all of this, is it possible to quantify the benefit of the entire drug market to our economy? Would it also be possible to quantify the benefit to be obtained for that group of patients who must rely on rare drugs in order to have a reasonable quality of life?

I will be brief unlike some of my colleagues

I have no doubt.

I thank the witnesses for coming before us. It is very important that we remember that behind every decision lies a person and his or her family. This must be utmost in the witnesses' minds when they are discussing matters. When it comes to money, figures, etc., the person can often be forgotten about. I would like to highlight that people are behind all of these cases.

Professor Barry said that the NCPE could do with nine more staff but that they are very hard to get. What is the reason for this? Is it education?

Professor Michael Barry

Yes.

Professor Barry might comment further on that.

I welcome the fact that we will have a decision on Respreeza in three or four weeks. A constituent of mine was lucky enough to be part of the trial but she is now at her wits' end, living from month to month not knowing what is happening. I welcome, therefore, the fact that we will have a decision soon. Is there is a specific comparison between a patient who is being treated with Respreeza and a patient who is not, particularly in the context of hospitalisation and the cost associated with that?

I will be brief. I appreciate the opportunity and thank the witnesses for being here. For years, I have been dealing with patients who rely on the drug Respreeza. I thank the Alpha One Foundation for great work it does. Unfortunately, patients have had to come to the Dáil to highlight their plight. The witnesses are well aware of patients, families and, as has already been said, real people who are literally living on borrowed time and who do not know whether they will have the drug for next month. It is an awful way to live one's life. I appreciate that the witnesses are very respectable people doing a job and living within the constraints that are there but, as I asked a while ago, what price can one put on a human life? One cannot put a price on it. I agree 100% that the companies must be made accountable for the money they charge and must be made aware that they cannot charge outrageous prices. Those companies have a social responsibility to ensure that people can live their lives. All these people want is the bare minimum as regards quality of life in order that they will know that when they go to bed at night, they will be able to get up in the morning, that the drug will be available for them and that they will be able to continue to live with their families. That is all we want. I have pleaded with the Minister and I am aware that he understands the situation 100%. I have asked how we could say to people that we cannot afford to provide the drug for them. There is a social responsibility. I am not putting this all back on the witnesses or the Department. I am saying that it relates to the companies.

There is a thing called respectability. The message should go out from here, on an cross-party basis, that we are outraged by the way companies are holding people's lives to ransom. To those people who put such a high charge on the drug, I would say that I respect the fact that they must make money and be profitable but there is such a thing as extortion. Just because a company can charge an extraordinary amount of money does not mean it should do so. I would like this message to go out from the committee. I appreciate the work the committee is doing here. I do not want to put anybody above anybody else but the work being done by this committee is more important than anything else. We want to tell citizens of this State that when they require a drug, they will get it regardless of cost. At the same time, we do not want to the Government to be fleeced.

Obviously, any decisions taken by the committee will not be taken in public, as is the custom. Will the witnesses respond to the questions? Banking questions is not ideal so could witnesses go through them? Members reserve the right to come if anything is missed.

Mr. John Hennessy

I will make a start on that group of questions. Again, I will be relying on colleagues to come in on aspects of the questions.

In response to Senator Dolan, my sense is that it is not necessarily the case that more rare diseases or rare conditions are being diagnosed but that perhaps more products are being developed to deal with rare conditions than would have been the case in the past. Obviously, that is good news and something we are all delighted about. The less attractive element of it is the extremely high prices that tend to accompany those products. The fact that new products are being developed for conditions that might not have been treated in the past is positive. My colleagues may have something more to say about that.

On the issue of delays, I repeat that the investment outlay required in respect of some of these conditions is quite considerable. It is for precisely this reason that the strict assessment criteria that are now in place were introduced. Professor Barry outlined earlier that we hope to refine this process as much as possible. He alluded to the arrangements for cancer care where some very high-priced products and drugs are coming on stream. That refinement aims to capture, in a more comprehensive way, the input of patients and the clinicians dealing directly with those patients, bring it into the heart of the process and ensure that these perspectives are taken into account when the product comes to the drugs committee and the leadership team. That approach has benefited cancer care here and, hopefully, we will see a similar benefit for rare diseases with which we are dealing this morning.

Deputy Durkan mentioned a few concerns that I will address. I will also rely on colleagues. The concern that we are paying too much is always there. It is for this reason that the 2013 legislation, controls and structures were introduced. Is there duplication? I suspect there is duplication across the EU on this. It does stand out as a really attractive opportunity to rationalise that. Colleagues may have views on this but I suspect the reason it has not happened up to now is because larger jurisdictions may be able to secure better discounts on behalf of their populations and may be less interested in doing this than smaller jurisdictions. The Deputy is right. The Minister has been pursuing this matter with colleagues from smaller states. It does look like an opportunity. I suspect that the HSE cannot proceed with that unilaterally in so far as it would need the agreement of health services across the EU to secure it. Again, it would be difficult for one small health service to determine that but I know the Minister is working on that approach and I hope it will progress.

I absolutely concur with Deputy Murphy O'Mahony that there are real patients and real families involved in every element of this and they are at the centre of it. With regard to the Respreeza clinical trials, I am pretty sure the hospitalisation dimension, or the avoidance of hospitalisation, was factored into the assessment, but I will ask Professor Barry to comment on this.

I apologise for interrupting, but the point was made on the benefit of keeping people out of hospital. When we speak about the nine drugs awaiting approval, has this been factored in by the HSE?

Mr. John Hennessy

It is fair to say, and colleagues will know better, from the reports I see the impact on the avoidance of hospitalisation is generally included as a factor in the assessment.

When we say those nine drugs would cost €120 million over five years-----

Mr. John Hennessy

It is net of-----

Mr. Shaun Flanagan

A common misunderstanding put out in the media is that the HSE does not consider all of the cost offsets. It does. The actual additionality we are asking for is additionality after every saving has been considered, so it is the additional bit we need.

Apologies for the interruption.

Mr. Shaun Flanagan

This featured a lot in the media in the Orkambi discussion, that the HSE did not consider the net cost of hospitalisation. We did. We were fully aware of all of these factors and we still needed hundreds of millions of euro.

Mr. John Hennessy

I will answer Deputy Healy-Rae's point and Professor Barry might come in on it also. The Deputy raised the issue of putting a price on life, or appearing to put a price on life. That is not what we do and Professor Barry may have thoughts on this. I concur with Deputy Healy-Rae on the responsibility that lies with pharmaceutical companies to behave in an ethical manner on these issues, because patients and families are directly involved. I refer in particular to the occasional practice of putting patients on clinical trials, providing access for the duration of the clinical trials and then threatening to withdraw the drug. In fairness, most pharmaceutical companies do not engage in this practice but some obviously do, and this would not be regarded as ethical behaviour by the HSE. Professor Barry will deal with the price on life issue.

Professor Michael Barry

This is something that has come up quite a bit over the years. We are not actually putting a price on life, but what we are putting a price and a money value on is the benefit the drug will give. If we think about it, we have to value in some way to get some idea of whether we should invest in it. It is putting a price on the benefit the drug gives and not a price on a person's life. The other important issue concerns my belief that all drugs should be assessed on the basis that simply because it is an orphan drug or a cancer drug it does not mean to say it works very well. This is the simple issue. Many of them do not work very well and this is why we assess them. There is an old saying in this game that if it is not clinically effective it certainly cannot be cost effective. For many of the drugs to which we say "No", money is a factor, but clinical effectiveness is a major factor. In fact, some of the clinical trials show very poor evidence the drug actually works. The point about it is if we invest millions of euro into a drug that does not work very well somebody else will lose out. This is called opportunity cost and this is the reality. Will we see this again and again? Yes we will. This is what we will see. There is a conveyor belt of high-cost medicines. Yesterday, I got one for €500 million per patient per year. This is now a common occurrence.

I presume all of the witnesses have professional bodies which have a central agency or organisation in Europe. I know this is correct. I am not asking the question because I know it is true. Could the witnesses use the strength of their professional bodies at European level to bypass some of the obstacles we have spoken about? With regard to constant assessing, I would have presumed Ireland could refer the results of our assessments to our European colleagues and let us have one assessment. We do not have to reassess again and again and go through the same process all over again.

My question is along the same lines. In any walk of life, organisation or process review a decision is reached based on best knowledge and information, which is very much respected. Is there a review mechanism with regard to the final decision of the witnesses, whereby somebody else can take a clean look at it? Two outcomes can differ. I am not saying the witnesses' analysis would be wrong, but somebody could look at it, see it from a different point of view and come up with different outcome.

Mr. Shaun Flanagan

The National Centre for Pharmacoeconomics is a recommending organisation, which the HSE asks to commission a health technology assessment. This involves the HSE drugs group, a committee of which 50% to 60% are actually clinicians. It reviews and assesses the assessment and evidence synthesis Professor Barry has done. It also challenges my unit, which is responsible for the commercial negotiations, on whether we have done a good enough job. There are steps within the process. The HSE drugs group makes a recommendation to the HSE leadership team, which looks at everything de novo and challenges all of the assessments and judgments made throughout the process and comes to an ultimate decision. There are steps in the process where all of us are challenged internally in the HSE. Obviously we also have a significant amount of external challenge and viewpoints on which we must reflect. All the way through the steps no single person is responsible for the decision. Everyone is answerable, everyone's recommendations are challenged and my work on negotiations with pharmaceutical companies is challenged by the drugs group. I am frequently sent back to try harder and do better. This is part of the process.

Deputy Brassil asked an earlier question on the frequency of meetings. The HSE drugs group is scheduled, and when it was incorporated it was scheduled to meet four times a year. It has already met six times this year, so it meets monthly to try to get through as many products as it possibly can.

Another meeting is probably necessary at this stage.

Mr. Shaun Flanagan

Absolutely, and it has met six times already this year.

Professor Michael Barry

To expand, we meet every week and review all of the drugs. In the assessment process in Europe various agencies often examine and compare them. We find a positive decision can be made in one country and a negative in another, and if we think about it this should not surprise us. We have EUnetHTA, the European Union network of health technology assessment. I do not see harmonisation of assessments in Europe from a health technology assessment point of view and not from pricing happening any time soon, and I will tell the committee why.

What about European standards and minimum standards?

Professor Michael Barry

No, because the valuation of health benefits will differ significantly between countries and costs will also differ.

That is not correct.

Professor Michael Barry

It is true.

That is not correct.

Professor Michael Barry

Deputy Durkan might not feel it should be right but that is the way it is.

Minimum standards are laid down at European level on virtually everything we do in the course of our daily lives. We need to get the benefit of these minimum standards. I do not want to be offensive or cause any aggravation, but that does not stop me from saying what needs to be said. I have been a member of the European affairs committee all my life, so I know where standards are laid down and I know what they are supposed to do. They are not doing it, we are not availing of them and we are not getting the benefits of our membership of the European Union for patients throughout the country.

To be very clear on this, as a layperson it strikes me that science is science and tests are tests, so I share Deputy Durkan's surprise there are not standards throughout the European Union by which these things can be assessed. When a purely scientific analysis is done on outcomes, a person is a person and it does not matter whether he or she is in Lithuania, Azerbaijan or Dublin.

Dr. Lesley Tilson

There are a number of steps within the health technology assessment, HTA, process, and we are participating in joint assessments for relative effectiveness assessment, which is based on scientific evidence, including clinical trials. When we go a step further, to the full HTA process, it can be much more complex. For example, the standard of care and health system delivery here can be different to other countries and that can affect the cost effectiveness result, leading to different conclusions.

Are they governed by European standards?

Dr. Lesley Tilson

They are, but we follow different clinical guidelines. What might be available here to be prescribed can be different to the UK. That affects the conclusions.

We are all in the European Union and so it applies right across Europe. Why are we not included in that?

Mr. Shaun Flanagan

We are flagging that there is an EU process called EUnetHTA which has been in place for around a decade. It has struggled to standardise this scientifically. If one is doing a cost benefit analysis one has to consider the benefit and the costs. We may pay our clinicians and nurses differently to how Germany does. That all builds in to the cost benefit analysis. The Deputy can shake his head, but that is the actual truth.

I am not going to interrupt again, but that is not acceptable. I want to repeat that we are all governed by European standards at the present time. We are part of a single market, the much-vaulted market that we are reminded of again and again, and there are huge benefits from it. It is a huge market of some 500 million people. We have been talking about small countries having individuals deals with pharmaceutical companies and such nonsense. We are wasting our time. We are playing around at the edges, and while we are doing so people are suffering or worried or may not have access to new medicines and may have to pay more for any medicine they use. It was mentioned earlier that some medicines have dropped dramatically in price. The reason for that is because of the type of discussion that we are having here now, but I can assure the witnesses that I do not accept the notion that we are not entitled to the same as every other person living in any other part of Europe.

The Deputy's point is well made. We will move on.

Mr. Shaun Flanagan

We are not arguing with that.

Professor Michael Barry

There is a difference between negotiating on price, which I completely agree on, and the assessment process. There are no agencies in some eastern European countries. Germany will not accept the parameters that we would accept in an assessment. We are closer to the UK and Holland. France will not carry out a formal cost effectiveness analysis. Different things go on in different countries, and that makes it difficult from an assessment point of view. On the issue of negotiation on pricing I find it hard to disagree with the Deputy.

I thank the witnesses.

Mr. John Hennessy

No one is arguing with the logic of what Deputy Durkan is saying. Of course we should be availing of cross-European opportunities. I do not presume to speak for our Department of Health colleagues on this, but I am aware that there is work going on in this area. It does involve the areas of information and knowledge sharing. The complexity of that should never be underestimated. It certainly involves leveraging the purchasing power of the 500 million people that the Deputy spoke of in order to get better value and better contracts with drug suppliers. There is no argument with the logic of what the Deputy is saying.

I have some short questions for the witnesses. On the potential for developing our own drugs, we have a thriving third level sector and a huge amount of money is being invested into skilling-up our scientists and fitting out our universities. Is there a reason why we are not developing more of our own drugs, and with the involvement of the State in the provision of those services can we not then expect a dividend? Unlike Deputy Healy-Rae I am never shocked when big business behaves slightly less than ethically, but if we have made a contribution to the development of these drugs - and I genuinely believe that we have - is it not in order that we should expect a dividend?

There was a huge amount of discussion around the 2013 Act and the protocols and the necessary procedures laid down. Is it the view of the witnesses that for orphan drugs we would need an entirely separate process, be it legislatively underpinned or otherwise? Would we need to revise the legislation or somehow find a way around that?

Mr. John Hennessy

In terms of companies producing drugs in Ireland and getting better value because of that, I am not sure that it actually works that way. Quite a number of the pharmaceutical products marketed worldwide are actually made in Ireland.

I am talking about development. Where they are physically made is not that important. Our universities are working in tandem and in partnership with these multinationals and yet we do not seem to get any benefit. We are still building the labs and staffing them, and yet we are not getting any benefit back. From the witness's reaction I can see that that is not happening, but it strikes me as a bit of a wasted opportunity if the Department of Education and Skills is putting large amounts of money into the universities to ensure that they have scientific labs and we are not extracting any benefit from that.

Mr. John Hennessy

The vice chairman is getting into a very big question about the model of development for drugs and medicines. The reality is that the model we have at the moment is what we have, and it is based on commercial entities producing medicines under the blanket of patent protection afforded to them by states. The question then arises as to whether the state, on behalf of its patients, get value for money for those products. At the moment the answer is yes in some cases and in other cases no. To change the model would require significant investment, and the affordability of replacing the current system would be a big question. The system that is there is protected by that patent blanket of protection, and it is a good question whether that produces good value. In the long term that question is most likely one for the political domain.

The question as to whether an entirely separate process is now needed for rare diseases on foot of the 2013 Act is a big question that can probably only be settled in the political domain. The measures that we have been taking to try and refine the current system, as laid out in the 2013 Act, have been on the back of the rare diseases report, in order to get a better appreciation for the differences that apply to rare conditions. Arguably the legislation could be amended, and of course we would implement whatever legislation is determined as necessary for that.

I thank Mr. Hennessy, Mr. Flanagan, Mr. Mitchell, Professor Barry and Dr. Tilson for their time and their answers.

Sitting suspended at 11.30 a.m. and resumed at 11.35 a.m.