Report highlights new medicines’ huge economic benefits to State

New medicines in the three areas responsible for most Irish deaths could deliver a massive economic benefit for the State, according to a new report commissioned by the pharmaceutical sector. It says they have allowed patients live for a cumulative total of 1.36 million years more than would otherwise have been the case.

The report, Value of Medicines in Ireland, was carried out by the Wifor Institute of applied economic research for the Irish Pharmaceutical Healthcare Association (Ipha), which represent the research-based pharma sector in Ireland.

It finds that spending on new medicines delivers a return for the economy and for society and argues that spending on medicines should be seen as an investment in socioeconomic growth, not simply as a budget “cost centre”.

The report says new medicines for cancer, heart disease and respiratory diseases are generating almost €52 billion in socioeconomic value for Ireland over the 20 years to 2025, adding that, for every euro invested by the State in paying for new drugs, €3.80 flows back into the broader economy over the period.

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New agreement

The report is published on Thursday as the Government and Ipha look to hammer out a new agreement on drug pricing and supply. The current agreement has been extended on two occasions, but a review is expected next month, with a new deal scheduled to come into force in July.

The Government has traditionally looked to contain spending on new drugs largely within existing budgets as savings are made on the spending on older medicines. The pharmaceutical industry is arguing for an appreciation of the broader economic benefit of new medicines.

Cancer, cardiovascular and respiratory disease between them account for almost 72 per cent of deaths in Ireland, the report states, quoting CSO data.

It says new medicines have cut the number of years of life lost to heart disease by 34 per cent in the 20-year period alongside an 8 per cent fall in years of disability. That, the authors say, delivers a €25.8 billion economic benefit in terms of productivity.

For cancer, new drug launches have reduced years lost by 16 per cent with a €16.8 billion boost to the economy, while the benefit in the area of respiratory diseases is €9.1 billion on the back of a 25 per cent reduction in the number of years of life lost and an 11 per cent fall in years lived with disability.

All told, this delivers a €51.8 billion socioeconomic benefit to the State in terms of avoided productivity losses, the Wifor report says.

The added productivity delivered by new medicines amounts to a fifth of the money spent by the State on health over the 20 years, it says, with the average annual benefit of €2.5 billion exceeding the €2.2 billion spent on medicines in 2019.

‘Priority’

The report says that “timely treatment of diseases through universally available, affordable and high-quality drugs should be a priority” for the State, adding that it does not currently seem to be.

Ipha chief executive Oliver O’Connor said his industry group had been keen to quantify the “real-world value of medicines innovation”.

“This groundbreaking study, the first of its kind in Ireland, demonstrates the impact of new medicines on patients’ lives, looking at indicators such as life years lost without new treatments and the ability to work,” he said. “It underlines the necessity to find a pathway for the sustained, predictable reimbursement of new medicines for patients.

“It shows the positive impact of medicines innovation on patients’ lives, on our economy and on the healthcare system,” said Mr O’Connor.

Wifor Institute chief executive Dennis Ostwald said the report was designed to be a constructive input into evidence-based policymaking.

“Our analysis... illustrates the transformational impact of medicines innovation on mortality and morbidity,” Prof Ostwald said.

He said the study showed the productivity gains generated by new medicines through gains in life expectancy, workforce participation and a reduced burden on the healthcare system.

“We hope this work can be a constructive input into healthcare policymaking, with a focus on value creation across society and economy rather than just considering medicines through the narrow prism of price,” said Prof Ostwald.