Generic drug prices in Ireland are similar to the branded equivalent, according to a report from the Economic and Social Research Institute.

As a result, the increased use of generic medicines has not led to substantial savings to the State or cash-paying patients.

This is despite the fact that the market share of generics for the leading drugs in the medical card scheme has doubled in recent years to 50%.

The ESRI report examined drug prices, use of generics and prescribing practices.

It looked at prices paid by the HSE, not retail prices.

The report revealed that relative to other EU member states, in-patent drug prices are higher in Ireland and off-patent drugs are lower.

Where doctors in Ireland have a choice between different medicines within the same therapeutic group, such as cholesterol-lowering drugs or medicines to counter hypertension, prescribers tend to select the most expensive pharmaceutical product.

In contrast, doctors in the UK tend to prescribe the least expensive product.

ESRI research professor Paul Gorecki has called for more transparency and the release of data on a monthly basis on the volume and cost of various drugs prescribed.

Extensive discounting of generics to pharmacies is also reported to be in operation.

Under legislation, which came into force this month, pharmacists can select a lower-priced drug than that prescribed by the doctor for an interchangeable pharmaceutical product.

The report said the lack of clarity and precision as to how prices will be set under the Health (Pricing and Medical Goods) Act 2013 means that it is not possible to predict with any certainty that originator and generic pharmaceutical prices in Ireland will fall vis-à-vis other countries.

The ESRI said there is also increasing use of "patient access agreements" in Ireland as an alternative mechanism for setting pharmaceutical prices.

Under this system, prices are negotiated between the State and manufactures but kept confidential.

It said the growing use of this mechanism should prompt a wider discussion about transparency and how the benefits of new drugs should be evaluated.

Ireland promised to conduct this study of drug prices and prescribing as part of a condition of the EU-IMF programme for financial support.

The Irish Pharmaceutical Healthcare Association, which represents the manufacturers of branded medicines, has welcomed the findings.

It said this confirms a study carried out recently on behalf of IPHA.

The IPHA said it has already demonstrated that the new Health (Pricing and Supply of Medical Goods) Act has the potential to make savings in the region of €50 to €70 million a year, which could be used to reinvest in ensuring patients have access to innovative medicines.

The Association of Pharmaceutical Manufacturers Ireland, which represents the generic medicines industry, said that generic pricing is determined by the Department of Health and historically has been a percentage of the off-patent original.

Its chairperson Fergal Murphy said there has never been a mandated generic prescribing or dispensing mechanism in Ireland and this led to historically very low generic penetration levels.

He said the introduction of reference pricing later this year will further reduce the prices of generics.