Decision
Mr K and Health Service Executive Primary Care Reimbursement Service
From Office of the Information Commissioner (OIC)
Case number: OIC-53233-L4Z0D3 (180315)
Published on
From Office of the Information Commissioner (OIC)
Case number: OIC-53233-L4Z0D3 (180315)
Published on
Whether the HSE was justified in refusing to fully grant access to minutes of the HSE Drugs Group under sections 30(1), 35(1), 36(1) and 40(1) of the FOI Act
28 August 2019
On 25 May 2018 the applicant sought access to the minutes of both the Directorate and the Drugs Group of the HSE for the period 1 January 2018 to the date of his request. The HSE appears to have processed the request in two parts. This review concerns the decision of the HSE on the request for access to the minutes of the Drugs Group, which was handled by the HSE Primary Care Reimbursement Service (PCRS). On 6 June 2018 the HSE refused the request, citing section 30(1)(c) of the FOI Act, which is concerned with the negotiations of public bodies.
Following an internal review, the HSE decided to part-grant the request. It granted partial access to minutes of five meetings of the Drugs Group that took place from January to May in 2018, some of which were heavily redacted. The HSE cited section 30(1)(c) in support of the relevant redactions.
On 13 August 2018 the applicant sought a review of that decision by this Office. During the course of the review, the HSE invoked additional exemptions as grounds for withholding the information at issue (namely sections 35(1)(a) and (b), 36(1)(b) and (c), and 40(1)(a) of the FOI Act). It also cited previous decisions of this Office that found information such as that withheld in the present case to be exempt under section 40(1)(a), i.e. Cases No. 170395 and 170452 (the latter of which arose on foot of a request by the applicant for records similar to those at issue in this case). The HSE also cited Case No. 060054 in relation to the application of section 30(1)(c) and the public interest.
Subsequently, however, the HSE published fuller versions of the minutes. In correspondence with this Office it stated that issues which were under deliberation when the FOI request was being processed and which are now no longer under deliberation are unredacted in the published minutes. The minutes of the meetings of February and March have been published in full while the minutes of the meetings of January, April, and May have been published with minor redactions.
Mr Flood of this Office brought this, and related matters, to the attention of the applicant, following which the applicant indicated that he wanted this Office to issue a binding decision on the matter.
I have now concluded my review in this case. In conducting the review, I have had regard to the communications between the parties as set out above and to the communications between this Office and both parties on the matter. I have also had regard to the full contents of the records at issue and the previous decisions cited by the HSE.
As the minutes of the February and March meetings have been released in full, there is no longer any issue to be considered in respect of those records.
I also note that the first of two redactions on page 5 of the published version of the January minutes was previously released to the applicant. As such, I do not propose to consider that redaction any further.
The applicant has indicated that he requires the remaining minutes to be released in full. Accordingly, my review is concerned with whether the HSE was justified in refusing to release the remaining information that has been redacted from the published versions of the minutes for the January, April and May meetings under sections 30(1)(c), 35(1)(a), 35(1)(b), 36(1)(b), 36(1)(c) and 40(1)(a).
There are a number of comments I wish to make before addressing the substantive issues arising. First, I note that the applicant made a number of points regarding the level of redaction of the records that were initially released to him. A review by this Office is considered to be de novo, which means it is based on the circumstances and the law as they pertain at the time of the decision.
Accordingly, I am satisfied that it is appropriate to have regard to the published versions of the records at issue and to confine the scope of the review to the redactions contained in the published versions. I also am satisfied that it is appropriate to consider the exemptions that the HSE did not originally rely upon but subsequently cited during the course of the review.
Secondly, it is important to note that the remit of this Office does not extend to examination of the manner in which public bodies conduct their functions generally. Accordingly, I cannot comment on such matters.
The information redacted from the records at issue comprises information relating to specific identified medicines and drugs that was considered as part of the negotiation process with the various suppliers in connection with the medicines reimbursement process.
In essence, the HSE’s argument is that the information at issue is confidential and/or commercially sensitive information relating to the reimbursement process, the release of which would have significant implications for that process.
As I have outlined above, the HSE has relied on a number of provisions of the Act in support of its refusal to release the information at issue. In the circumstances of this case, I am of the view that section 40(1)(a) is the most appropriate exemption to consider in the first instance.
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 and the expectation that the harm will occur must be reasonable. In examining the merits of a body’s view that the harm could reasonably be expected, the Commissioner does not have to be satisfied that such an outcome will definitely occur. The test is not concerned with the question of probabilities or possibilities but rather whether or not the decision maker's expectation is reasonable. It is sufficient for the body to show that it expects an outcome and that its expectations are justifiable in the sense that there are adequate grounds for the expectations.
Before I consider the applicability of the exemption to the information at issue, it is worth repeating the HSE’s summary of the reimbursement approval process, notwithstanding the fact that the applicant is already aware of same.
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 (the Health Act) 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 terms of agreements in place between the HSE and industry representative bodies, including 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 current IPHA Agreement dated with effect from 1 August 2016).
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 European Union (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 conducted by the National Centre for Pharmacoeconomics (NCPE), part of the Department of Health. 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 the medicine, and the resources available to the HSE.
The HSE's Director General delegated authority for deciding on reimbursement applications to a member of the HSE Directorate team. The HSE also established a "Drugs Group" consisting of medical experts who assess reimbursement applications for expensive medicines based on the documents and submissions made by the applicant companies, any summaries of information prepared by the HSE Corporate Pharmaceutical Unit, and the HTA results and recommendations. The Drugs Group makes a recommendation to the Directorate, which, including the Director General, is given full copies of the documents that were before the Drugs Group. The PCRS administers the reimbursement applications, the decisions and the prices.
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.
Ultimately, following confidential negotiations and agreement, if reached, the agreed maximum reimbursement price for the relevant medicine is published on the PCRS website.
The HSE argued that 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. It argued that the confidential nature of the negotiations between the company and the HSE is paramount in eventually securing the best deal possible for the State and the taxpayer.
The HSE further argued that the outcome of negotiations around the approval of drugs and medicines for reimbursement have a major bearing on the finances of the State. It argued that the current system places a heavy emphasis on the need for confidentiality between all parties. It argued that in order to ensure the best outcome for the State and the taxpayer, this is the system within which the HSE must operate in its negotiations with pharmaceutical companies.
Furthermore, according to the HSE, as a result of the requirements of the 2013 Act and the IPHA agreement, there are significant checks and balances involved regarding the reimbursement price that can be achieved for any given medicine. These requirements ensure that Ireland remains in line with other EU Member States. Also, Ireland can, by way of the reference price system, take advantage of prices set by other EU Member States with greater negotiating power than Ireland, taking into account the size of Ireland's domestic market.
The applicant’s submission is primarily concerned with his arguments as to the public interest in favour of the release of the information at issue. I will address the matter of the public interest separately below.
The HSE has a limited budget to spend on novel drugs. It submits that the manufacturers of the drugs involved in this case have a monopoly position because there are no generic or “biosimilar” versions of these medicines.
It is possible for the HSE to be transparent if it agrees to pay the initial price quoted by the companies in their applications. The companies will enter into negotiations with the HSE about its first price/offer, which can result in better overall deals from a public expenditure perspective. However, as noted, according to the HSE these are contingent on confidentiality. The HSE submits that it has achieved savings of over €500m spanning the next decade as a result of such deals. It contends it must negotiate in this manner if it is to achieve the best outcome for the State and the taxpayer.
The HSE further argues that if it disclosed the details of any confidential negotiations and their outcome under FOI (effectively to the world at large), other pharmaceutical companies would refuse to negotiate with it. It also contends that disclosure could negate existing pricing agreements. The HSE considers that increased expenditure on the drugs these companies supply would either impact on budgets for other parts of the health service, or result in fewer drugs receiving reimbursement approval.
In the circumstances, as described, I accept that disclosure of records relating to the negotiations at issue could reasonably be expected to result in pharmaceutical companies refusing to enter into negotiations with the HSE in future. While the protracted nature of such negotiations can affect the speed at which persons may access the relevant drugs, the potential losses to the Exchequer arising from the discontinuance of such negotiations are considerable.
I accept the HSE’s statement regarding the monopoly enjoyed by the companies concerned. These circumstances seem to me completely different to those of the typical case of an FOI body tendering for the supply of goods or services in a competitive market.
I also accept the HSE's position that, in the circumstances, it has no scope to negotiate better deals with pharmaceutical companies other than in complete confidence. In addition, I accept its position that disclosure of records covered by this request could reasonably be expected to result in pharmaceutical companies refusing to enter into negotiations with the HSE in future.
Having considered the matter carefully, it seems reasonable to me to expect that granting access to the records in question could have a serious, adverse effect on the financial interests of the State. I find that section 40(1)(a) applies in the particular circumstances of this case. I will now address the public interest and the application of section 40(3).
Section 40(3) must be considered regarding a record to which subsection (1)(a) applies. Subsection (3) provides that subsection (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 request concerned.
In considering 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). It is noted that a public interest (“a true public interest recognised by means of a well-known and established policy, adopted by the Oireachtas, or by law”) should be distinguished from a private interest. Although these comments were made in relation to another provision of the FOI Act, they are relevant to consideration of public interest tests generally.
The FOI Act recognises a public interest in ensuring openness and accountability in FOI bodies. 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 HSE argues that the procedures for seeking reimbursement approval (including the details of the IPHA agreement), as set out in the Health Act, are transparent. It also says 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. Therefore, it contends, there is no additional benefit in the public interest to be gained through release of the records. The HSE also submitted that its accountability regarding this process is strengthened by the fact that list prices in Ireland can be compared to those in other countries.
The HSE also referred to sections 7(1) and 7(5) of the Health Act 2004. 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. The HSE argues that there is, accordingly, a clear statutory public interest in it using resources efficiently and achieving value for money. The Commissioner has previously accepted that sections 7(1) and (5) of the Health Act 2004 represent a true public interest that weighs in favour of refusing the grant of access.
The applicant's arguments are grounded in the provisions of section 11(3) of the Act, which he cited. Section 11(3) requires FOI bodies, when performing any function under the Act, to have regard to:
"(a) 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,
(b) the need to strengthen the accountability and improve the quality of decision- making of FOI bodies, and
(c) the need to inform scrutiny, discussion, comment and review 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."
More specifically, the applicant submitted that it is in the public interest that the duration of the processes at issue be known and, where there are delays, that it also be known whether there are objective factors which explain such delays and/or whether the HSE is operating effectively or not. I note that the HSE has acknowledged that the negotiations involved in this area can be quite protracted, at times due to companies submitting fresh applications following initial refusals. The applicant also highlighted the extent of public expenditure in this area and the significant consequences for the public arising from meetings of the Drugs Group, including the impact on persons awaiting access to particular drugs that may qualify for reimbursement. He also stated his view that there is a strong public interest in publicly-funded bodies achieving value for money and argued that release would enable the public to ensure the Drugs Group is managing its mandate correctly and is operating efficiently and effectively.
Further, he contended that the Minister for Health has accepted that the current system is failing patients. He argued that the records should be released in order that the public be fully apprised of the reimbursements process so that it may participate constructively in dialogue concerning necessary changes in this regard.
The applicant has also cited the judgment of Smyth J in South Western Area Health Board v Information Commissioner [2005] IEHC 315 to the effect that when the Commissioner is balancing the public interest with which the FOI Act is concerned (the Act of 1997 in that instance) against other constitutional rights, the principle of proportionality must be applied. He submitted that the principle of proportionality is recognised as a fundamental principle governing rights and freedoms of persons under the European Convention on Human Rights (ECHR) and that where, in the context of the FOI Act, the application of the public interest test conflicts with another right under the Constitution or ECHR, the Commissioner must apply the principle of proportionality to balance the interests concerned.
The applicant made these arguments in the context of his discussion of the extent of the redactions at issue which, in his view, were disproportionate and excessive. While he contended that the public interest favours release on this basis, he did not cite any particular provision of the Constitution or the ECHR, nor has he specified any such conflict. In the circumstances, I do not propose to engage in this regard any further.
Furthermore, much of the applicant’s concern related to the initial level of reaction of the records. As I have explained above, this review is confined to a consideration of whether or not the redactions to the published versions of the records at issue were justified.
In my view, the information placed in the public domain, alongside that already released, serves the public interest in openness and accountability in this case to a significant extent. I accept that granting access to the remaining records at issue would further serve that public interest because it could reveal the ultimate cost to the State of funding the various drugs involved, disclose the positions taken by the HSE in the relevant negotiations, and promote accountability for the HSE's overall decision making process on reimbursement approvals. This public interest is entitled to significant weight, particularly when one considers the extent of public expenditure in this area.
It must be recognised, however, that such details, by their nature, also disclose information about the negotiation tactics of the pharmaceutical companies and the deals ultimately reached with the State, which is information the companies require the State to keep confidential in order to do those deals. I also 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 medicines, including novel drugs, thus freeing funds for other such medicines and other health services.
Furthermore, in my view, the public interest represented by sections 7(1) and (5) of the Health Act 2004 weighs in favour of refusing access. Following careful consideration, I am satisfied that, in the particular circumstances of this case, the public interest in granting access to the records concerned does not outweigh the public interest in refusing access to them. I find, therefore, that the HSE was justified in refusing to release the redacted parts of the records at issue section 40(1)(a) on the basis that access to the information concerned could reasonably be expected to have a serious, adverse effect on the financial interests of the State.
Given my finding, I do not need to consider any other exemptions relied on by the HSE.
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the HSE's decision. I find the HSE was justified in refusing access to the information redacted from the records concerned under section 40(1)(a) of the FOI Act, on the ground that access to the redacted information could reasonably be expected to have a serious, adverse effect on the financial interests of the State.
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.
Stephen Rafferty
Senior Investigator