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Irish General Election 2011: IBEC Jobs Manifesto calls for public sector and welfare reform; Thin gruel on inspiring ideas for jobs
By Michael Hennigan, Founder and Editor of Finfacts
Feb 8, 2011 - 5:39 AM
Irish General Election 2011: IBEC, the principal Irish business lobby group on Monday launched its
Manifesto for Election 2011 (pdf) and called for public sector and welfare reform
while providing thin gruel on inspiring ideas for jobs.
IBEC director general Danny McCoy said:
"A new government must
reform how the country and the economy is governed. We must learn from our
mistakes and ensure that they are not repeated. The economic crisis demands an
overhaul of the welfare system and labour market rules, major reform of the
public sector, and a definitive solution to the banking crisis. Only then can we
hope to restore our international reputation and move forward with confidence."
It may seem strange that given the ostensibly pious aspirations for reform of
both the "the country and the economy," that the former Economic and
Social Research Institute (ESRI) economist would avoid the issues of reform of
the protected private sector which imposes more cost burdens on business than
for example commercial rates.
The health area for example straddles both the public and private sectors in
regard to the need for reform.
Health insurance premiums have been rising at significant real rates for
years as have GP charges - - you pay your doctor twice; directly for a
consultation and also for the payments made to him or her from tax funds; follow-up
consultations are usually charged at full rate and it's likely that many drugs
are included in the medical prescription system to provide income support for
the various intermediaries in the process.
The cost of Irish State financed drugs schemes doubled from 2002 to over
€1.6bn in 2008. Fees and other income earned by pharmacists doubled accordingly.
It cost the taxpayer an exorbitant €640m to get €1bn of drugs from factory gate
to patients in the community in 2008.
A 40% drop in the price of up to 300 commonly prescribed drugs coming
off-patent, came into effect in Ireland on February 01, 2010 and was expected to
save the State up to €94m in a full year.
However, some generic drugs are now 50% more expensive than their branded
equivalents - - a situation "unique in Europe," the Clinical Director of
the National Centre for Pharmacoeconomics told the Irish Medical Times.
Describing this as "an extraordinary situation," Dr Michael Barry stated
that while GPs were prescribing generic medicines, the patient would pay a
premium for the generic product.
“Doctors are encouraged to prescribe generics on the basis that it enhances
cost-effectiveness, but this is no longer the case. It is ridiculous: there is
no other country in Europe where the original proprietary drugs are cheaper than
the generic equivalents,” Dr Barry told Irish Medical Times.
Minister for Health Mary Harney told the Oireachtas Joint Committee on Health on
February 09, 2009 that as a result of the new agreement reached with
pharmaceutical producers, some generic products would now be more expensive than
the products that come off patent.
Generic drugs had traditionally been priced, on average, between 5-10% below
their branded equivalents (which in itself was ridiculous). However, the 40% price cut on off-patent medicines
has meant many generics are now considerably more expensive than the brand
The Irish Pharmaceutical Healthcare Association (IPHA), which represents the big
manufacturers agreed to cut off-patent drugs prices after Minister Harney agreed
that the State wouldn't interfere with the cost of their proprietary or branded
drugs for another 18 months. The new deal takes the IPHA up to March 2012.
A 2006 Irish agreement provides that the price to the wholesaler of any
medication will not exceed the average wholesale prices in Belgium,
Denmark, France, Germany, Netherlands, Spain, Finland, Austria and the UK.
The Minister said she was appealing to the manufacturers to reduce their prices.
In 2009, the Government introduced cuts of up to €133m in payments to
pharmacists over a 12-month period by reducing from 50% to 20% the retail
mark-up payable under the community drugs schemes.
Drugs companies claim that high prices are necessary to promote innovation.
However, research published in the American Journal of Public Health disputes
On the economy, IBEC projects GDP growth of 1.8%
this year, but suggest GNP recovery will be more muted. It said Irish firms are
currently benefiting from a marked improvement in export conditions as a result
of further recovery in the global economy and a substantial improvement in Irish
competitiveness. With regard to employment, IBEC said the labour market will
remain very weak this year with new employment struggling to offset the impact
of further job losses.
IBEC chief economist Fergal O'Brien
said: "After the exceptional resurgence in global trade
last year, Irish exports will be the main driver of economic recovery this year.
Export growth will be close to 6% in 2011 and 4.5% in 2012. Importantly, Irish
firms will continue to increase their share in global markets.
"The ongoing decline in construction activity means that investment will
continue to drag a little on growth, but nothing like at the level of what we
experienced in recent years. Encouragingly, firms look set to increase their
investment in machinery and equipment, as many postponed investments in recent
years and some are now facing capacity constraints.
"The cost and availability of credit remains the single biggest challenge facing
the employment-intensive SME sector. A new government should prioritise this
issue and also take further steps to strengthen Ireland's competitiveness