New legislation aimed at encouraging more generic prescribing and introducing a system of reference pricing for drugs under State schemes has now formally come into operation.

The Health (Pricing and Supply of Medical Goods) Act 2013  provides the Irish Medicines Board (IMB) and the HSE with a robust statutory framework for the introduction of generic substitution and reference pricing on a phased basis, Helath Minister James Reilly said.

Currently, when a specific brand of medicine is prescribed for a patient, a pharmacist can only supply that particular brand, even when less expensive generic versions of the same drug are available.

The Act permits pharmacists to substitute medicines prescribed, provided that they have been designated as safely interchangeable by the Irish Medicines Board.

The IMB will will initially review 20 active substances, which equates to approximately 1,500 individual medicines.

It is expected that the first List of Interchangeable Medicines, containing groups of atorvastatin (lipid-lowering) products will be produced by mid-August.

The IMB will publish subsequent lists for other groups of medicines on an ongoing basis.

The HSE will then set a reference price for these groups of drugs with a view to having the first reference prices implemented by November.

Reference pricing involves the setting of a common reimbursement price, or reference price, for a group of interchangeable medicines, above which the HSE will not cover the cost.

One reference price is set for each group or list of interchangeable medicines, and this is the price that the HSE will reimburse to pharmacies for all medicines in the group, regardless of the individual medicine’s prices.

A reference price will be set for each group of interchangeable medicines published by the IMB.

"From the end of the year onwards, hundreds of thousands of prescriptions will be subject to generic substitution, which will offer choice and reduced prices to patients." Dr Reilly said.

The name of the Irish Medicines Board is to be changed to the Health Products Regulatory Authority next year.