Whether the Department was justified in refusing to fully grant a request for Ministerial briefing notes and correspondence with the Health Service Executive (the HSE) relating to recommendations for drug reimbursement applications 

17 April 2018  

Background

On 3 July 2017, the applicant made three FOI requests to the Department. One concerned correspondence regarding a particular drug, and will not be considered further because the applicant did not appeal the Department's decision to refuse the request on the basis that such records do not exist. The other two requests sought:

All briefing notes for Minister Harris since May 2017 on drugs that the HSE have recommended for reimbursement but which are not yet reimbursed. 
All correspondence with the HSE in relation to drugs they have recommended for reimbursement but which are not yet reimbursed (correspondence since June 2016). 

The Department's decision of 21 July 2017 refused access to 26 records under sections 29 (deliberative process) and 36 (commercially sensitive information). The applicant sought an internal review of the Department's decision on 24 July 2017. The Department's internal review decision of 28 August 2017 granted partial access to record 3, and affirmed its refusal of the other records under sections 29 and/or 36. On 14 September 2017, the applicant sought a review by this Office of the Department's decision. In the course of the review, the Department granted access to records 1, 2, 4, 8, and 14 in full, continued to fully withhold records 11, 16, 18, 20, 22, 24, and 26 and granted partial access to the rest. It said that, while it was no longer relying on section 29 it was now seeking to rely on section 30(1)(c) (functions and negotiations of FOI bodies or the Government) in addition to section 36. 

I am now concluding the review by way of binding decision. In carrying out my review, I have had regard to details of the above correspondence; to details of contacts between this Office, the Department, and the applicant; to the content of the records; and to the provisions of the FOI Act. 

Scope of the Review

This review is confined to whether or not the Department has justified its refusal to fully grant the applicant's request. 

The Reimbursement Approval Process

To give this decision some context, it is useful to set out the following background information provided by the HSE inCase No 170395(Ms X and the HSE), which also concerned reimbursement applications for novel drugs: 

While there is a private market for medicines in Ireland, most pharmaceutical companies also want a HSE approved maximum reimbursement price for their medicine so that the medicine can be made available to patients who benefit from full or partial cover for their medicines' costs under various State schemes such as the General Medical Card Scheme and the High Tech Medicines Scheme. A maximum reimbursement price is the maximum price the State is willing to pay for a medicine that is so covered. 

Section 21(2) of the Health (Pricing and Supply of Medical Goods) Act 2013 sets out seven factors that the HSE must take into account when considering the price submitted by a pharmaceutical company. One such factor is the agreement between the HSE and the Departments of Health and Public Expenditure and Reform, and the pharmaceutical industry (which is represented by the Irish Pharmaceutical Healthcare Association (IPHA)), regarding the setting of prices for medicines (the IPHA Agreement). 

In essence, a pharmaceutical company submits an application form for a maximum reimbursement price to the HSE. The applicant specifies a maximum reimbursement price, which is calculated in accordance with the requirements of the IPHA Agreement (i.e. an average of the maximum reimbursement price for the same medicine in a number of specified EU member states).

If the cost is expensive (in the thousands of euro per patient), the HSE can send the medicine for health technology assessment (HTA). HTA is carried out by the National Centre for Pharmacoeconomics (NCPE), which is part of the Department of Health and based in St James' Hospital. It assesses the cost-benefit of the medicine based on clinical and cost-benefit data supplied by the pharmaceutical company. The NCPE sends the HTA results and its recommendation to the HSE. The HSE may still consider the medicine for reimbursement even if the HTA assessment is negative on cost grounds versus the patient benefit, but must follow the criteria set out in section 21(2) and Schedule 3, Part 3 of the Health (Pricing and Supply of Medical Goods) Act 2013. Schedule 3, Part 3 requires the HSE to consider nine criteria in deciding on the application, including the health needs of the public, the potential or actual budget impact of the medicine, the clinical need for it, and the resources available to the HSE. 

Generally, where the main issue with an application is the proposed maximum reimbursement price (as opposed to any efficacy concerns), and before the final decision is made by the HSE, there can be negotiations between the applicant company and the HSE, with the intention of reducing the price originally applied for. As noted above, that price is not freely determined by the applicant but is based on an average of the maximum reimbursement price for the same medicine in a number of specified EU member states. The HSE says that the pharmaceutical companies will not engage in price negotiations unless their pricing proposals and related information, and the general content of the negotiations, are kept confidential.

The Department says that where the HSE wishes to pay for a medicine but cannot do so from existing resources, it may inform the Department of its decision in this respect. The Minister for Health may, as he deems appropriate, bring a Memorandum to Government in relation to the funding implications and request consideration of same. 

Findings

Attachments to Emails - withheld because of their general nature
The Department withheld attachments to a number of emails (i.e. records 3, 11, 16, 18, 20, 22, 24, and 26). It says that the attachments are exempt from release for various reasons. However, I understand that the Department refused access to these records having regard to their general nature rather than their individual contents. 

It is not appropriate for this Office to decide on access to records in such circumstances. The most appropriate decision for me to make on these attachments is to annul the Department's refusal of them and to require it to undertake a fresh decision making process on them. The applicant has confirmed to this Office that he wishes to pursue his request in relation to the attachments. It is open to him to reconsider this in light of my decision below, however. 

Section 22(12)(b) and the burden of proof 
This Office invited submissions from the Department on 10 October 2017. It drew attention to the requirements of section 22(12)(b), which provides that a decision to refuse to grant an FOI request shall be presumed not to have been justified unless the head of the relevant public body shows to this Office's satisfaction that its decision was justified. The Department's submission of 24 October 2017 contained a number of assertions as to the harms that could result from granting access to the records. However, it did not explain how these harms could arise and, thus, why the various exemptions apply. It is well settled that a mere assertion that, or a summary statement as to why, a provision applies is not sufficient to meet the requirements of section 22(12)(b). 

However, in making my decision on this case I consider it appropriate to take account of the HSE's arguments in Case No 170395 as to why the records in that case were exempt from release. I also note that the Information Commissioner found section 40(1)(a) to apply to the records in that case. This provision seems appropriate to consider in the circumstances of this case also. 

The applicant says that I should not consider section 40(1)(a) because that the Department did not rely on it. He also says that an overly broad application of section 40(1)(a) could lead to it being relied on to refuse access to almost any record concerning state budgets. Considering the application of section 40(1)(a) is in keeping with the de novo nature of my review. Furthermore, each case is determined on its own merits. Any finding in this case that section 40(1)(a) applies does not necessarily set a precedent for all cases involving the expenditure of State monies. 

Section 40(1)(a) - information having a serious, adverse effect on the financial interests of the State
Section 40(1)(a) provides that a request may be refused if the head of the body is of the opinion that "access to the record could reasonably be expected to have a serious, adverse effect ... on the financial interests of the State". For section 40(1)(a) to apply, the potential harm that might arise from disclosure must be identified - a serious, adverse effect on the financial interests of the State - and the expectation that the harm will occur must be reasonable.

The HSE's arguments in Case No 170395 were that:

It has a limited budget to spend on novel drugs. Pharmaceutical companies have a monopoly on new and unique drugs, and they make 30-50 reimbursement applications each year. 

It is possible for the HSE to be transparent if it agrees to pay the initial price quoted by the companies in their applications. While the companies will enter into negotiations with the HSE about its first price/offer, which result in better overall deals from a public expenditure perspective, these are contingent on confidentiality. Confidentiality is a feature of all deals the HSE has made with pharmaceutical companies, as it is of Patient Access Schemes made by health authorities in other countries. It has achieved savings of, conservatively, over €500m over the next decade as a result of such deals. 

Various oversight mechanisms are in place, such as the Comptroller and Auditor General, who would have access to relevant records but would also be required to observe the confidentiality requirements imposed by the companies on the HSE.

If the HSE disclosed the details of any confidential negotiations and their outcome to the world at large (which is understood to be the equivalent of a grant of access to a record under FOI), other pharmaceutical companies would refuse to negotiate with it. The increased expenditure on the drugs that these companies supply would either impact on budgets for other parts of the health service, or result in fewer drugs receiving reimbursement approval.

Analysis

In Case No 170395, the Commissioner accepted the HSE's position that the manufacturers of novel drugs have a monopoly. He said that he considered the circumstances to be completely different to those of the typical case of an FOI body tendering for the supply of goods or services in a competitive market.

The Commissioner also accepted the HSE's position that, in the circumstances, it has no scope to negotiate better deals with pharmaceutical companies other than in complete secrecy. In addition, he accepted its position that disclosure of records relating to such negotiations could reasonably be expected to result in pharmaceutical companies refusing to enter into negotiations with the HSE in future. He said that, having regard to the content of the records, there was no doubt that difficult and protracted negotiations take place and that the conflicting demands pose a dilemma for all involved, not least the patients who will benefit from access to the novel drugs. 

The Commissioner's decision in Case No 170395 noted that the HSE publishes the prices it would have to pay for the relevant drugs if no deal was done (the "list price" of the drugs). He noted that one packet (a 28 day supply) of Orkambi, for instance, has a list price of €12,144 and, based on 700 patients needing 13 packets a year, this drug alone would cost €110,510,400 based on its list price. The Commissioner said that while Orkambi may be a particularly expensive drug, he had no reason to dispute the amount the HSE says it has saved as a result of deals it has struck with drug manufacturers. He accepted that the annual cost of treatment using novel drugs, in the absence of such deals, would be at considerable cost to the Exchequer.  

The Commissioner said that, in the circumstances, it seemed to him to be reasonable to expect that granting access to the records could have a serious, adverse effect ... on the financial interests of the State". He found that section 40(1)(a) applied in the particular circumstances of Case No 170395. 

Having examined the withheld records in this case, I also accept that protracted negotiations have taken place in relation to the reimbursement applications concerned. It seems to me that, having regard to the circumstances, the Commissioner's analysis and findings in Case No 170395 are relevant, and I adopt them for the purposes of my decision. In the particular circumstances of this case, I find that section 40(1)(a) applies to the withheld records. 

The applicant argues that commercially confidential information may require partial redaction but that this should not prevent the release of records such as those that have been fully withheld in this case. 

Section 18(1) provides, that "if it is practicable to do so", access to an otherwise exempt record shall be granted by preparing a copy, in such form as the head of the public body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). Generally speaking, this Office takes the view that neither the definition of a record nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from the remaining withheld details for the purpose of granting access to those particular sentences or paragraphs. Having examined the records, I am satisfied that it is not practicable to attempt to extract any details that might not, of themselves, qualify for exemption under section 40(1)(a) while at the same time ensuring that the ensuing copies are not misleading under section 18 of the Act. 

Section 40(3)
Section 40(3) must be considered regarding a record to which section 40(1)(a) applies. It provides that section 40(1) does not apply in a case where the public interest would, on balance, be better served by granting than by refusing to grant the FOI request concerned. 

On the matter of where the public interest lies, I have had regard to the comments of the Supreme Court in  The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v. the Information Commissioner[2011] IESC 26 (the Rotunda case). In particular, the Supreme Court indicated that a public interest is "a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law". Although this comment was made in relation to another provision of the FOI Act, I consider it to be relevant to consideration of public interest tests generally. 

The FOI Act itself recognises a public interest in ensuring that FOI bodies are open about, and can be held accountable for, how they carry out their functions. However, the Act also recognises a public interest in protecting information that is exempt under its provisions. Specifically in this case, there is a public interest in not granting access to information that could have a serious, adverse effect on the financial interests of the State. 

The applicant says that access is consistent with ensuring public access to information, would serve the public's need to be better informed and to be competent to comment on public affairs, and improve the transparency of public bodies. His arguments reflect section 11(3) of the FOI Act. This provision requires FOI bodies, when performing any function under the Act, to "have regard to the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principle of transparency in government and public affairs"; to the need "to strengthen the accountability and improve the quality of decision making of public bodies"; and the need to inform scrutiny by the public of the activities of FOI bodies and "facilitate more effective participation by the public in consultations relating to the role, responsibilities and performance of FOI bodies".

These matters to which public bodies should have regard seem to me to derive from the overall public interest of ensuring openness and accountability, as recognised by the FOI Act itself. That said, section 11(7)(b) is equally relevant, which states that "[n]othing in this section shall be construed as applying the right of access to an exempt record ... where the exemption operates by virtue of the exercise of a discretion that requires the weighing of the public interest, if the factors in favour of refusal outweigh those in favour of release."

The applicant also says that it is important that access be granted to documents clarifying whether it is the HSE or the Department that holds "practical authority" on deciding on applications for reimbursement.

In Case No 170395, the Commissioner noted the HSE's arguments that procedures for seeking reimbursement approval (including the details of the IPHA agreement), are set out in the Health (Pricing and Supply of Medical Goods) Act 2013. He also noted the HSE's arguments that summaries of the HTA recommendations, along with list prices and the minutes of the HSE Directorate board meetings recording outline decisions taken on reimbursement applications, are published on the NCPE and HSE websites, respectively. 

It seems to me that the information already in the public domain, including the records to which access has been fully or partially granted in this case, serves the public interest in openness and accountability to some extent. I accept that granting access to the withheld records would further serve that public interest, by revealing the ultimate cost to the State of funding certain drugs, and by promoting accountability for the entirety of the decision making process on reimbursement approvals, particularly that of the Department. As noted by the Commissioner in Case No 170395, the public interest in favour of the grant of access is entitled to significant weight, particularly when one considers the amount of public monies that are spent on novel drugs. 

It must be recognised, however, that the grant of access would also disclose information about the deals agreed between the pharmaceutical companies and the State via the HSE, which is information those companies require the State to keep confidential in order to make such deals. As the Commissioner did in Case No 170395, I accept that there is a significant public interest in ensuring that the State, through the HSE, can continue to negotiate better terms with pharmaceutical companies, which reduce the overall costs of funding novel drugs and thus make funds available for other novel drugs or other health services. 

I also note the Commissioner's comment that the current system of arriving at a reimbursement process for medicines in order for the State to secure the best possible terms may not be ideal in terms of transparency and determining the value for money resulting from the particular deals struck. However, he said that he can only consider the situation as it exists at present where there cannot be alternative suppliers. 

Having carefully considered the matter, I consider that the public interest in granting access to the withheld records (or parts of records) does not outweigh the public interest in refusing access to them. 

I also note that the Commissioner accepted that, as argued by the HSE in Case No 170395, sections 7(1) and (5) of the Health Act 2004 represent "a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law" that weighs in favour of not granting access to the records. Section 7(1) provides that the object of the HSE is "to use the resources available to it in the most beneficial, effective and efficient manner to improve, promote and protect the health and welfare of the public." Section 7(5) obliges the HSE to have regard to the resources, wherever originating, that are available to it for the purpose of performing its functions, and the need to secure the most beneficial, effective and efficient use of those resources. 

In the circumstances, there is no need for me to consider the other exemptions relied on by the Department in this case. 

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby vary the Department's decision. 

I annul its refusal of the attachments to records 3, 11, 16, 18, 20, 22, 24, and 26. I direct the Department to undertake a fresh decision making process on these records, and to inform the applicant of the outcome in accordance with section 13 of the FOI Act. 

I affirm its refusal to grant full access to the remaining records, albeit under section 40(1)(a) rather than the provisions explicitly relied on in it decisions and in its submission to this Office. 

I specify that, subject to sections 24 and 26 of the FOI Act, effect shall be given by the Department to my decision within five working days of the expiration of the 4 week period for the bringing of an appeal to the High Court from this decision as provided for at section 24(4) of the FOI Act.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal. 

Elizabeth Dolan
Senior Investigator