The Irish Pharmacy Union has warned of medicine shortages if prices continue to fall.
The Oireachtas Health and Children Committee heard that the average price of medicine dispensed now is at the price it was 13 years ago.
The committee heard from representatives of pharmacies and pharmaceutical manufacturers on the cost of prescription drugs.
The IPU said Ireland will never have the lowest prices for prescription medicines because it would result in shortages.
IPU Secretary General Darragh O'Loughlin was asked why medicine is cheaper in Spain where there are no shortages.
Mr O'Loughlin replied that there are shortages in Spain.
He said Ireland is a small market and Irish people visiting Spain will discover that there are a lot of other things cheaper there, including coffee.
He said Spain has a low cost economy whereas places like Brussels have a high cost economy where items are more expensive.
IPU President Kathy Maher said: "The cost of most medicines is falling and will continue to fall over the next number of years, and the public and the Exchequer will continue to see considerable savings on their medicines bills as a result."
She said pharmacists are legitimately concerned that constantly falling prices may, in some cases, worsen existing medicine shortages, with the consequent negative impact on their patients' treatment.
Ms Maher said pharmacists have no role in price setting saying "pharmacists are price takers not price makers".
She said the introduction of generic substitution and reference pricing in 2013 has further substantially reduced medicine prices, with prices for many off-patent medicines falling by as much as 85% in the last 12 months.
Ms Maher added "Switching more medicines from prescription-only to non-prescription status empowers patients to take better care of their own health.
"This allows the patient speedier access to appropriate treatment, saving the time and cost of a GP visit, while saving the State the cost of the medicine and freeing up GP time to deal with more complex cases."
President of the Irish Pharmaceutical Healthcare Association Leisha Daly said that under the current pricing agreement Irish prices are set at the average of prices in nine other EU member states.
She said when a member company proposes a new medicine to the Health Service Executive it must offer it at a price which is at, or lower than, the average of its price in those member states.
Ms Daly said a study carried out by a third party last summer showed that "prices for patent-protected medicines were within 1.8% of the average of the nine countries."
"Prices in Ireland are neither the highest nor the lowest in Europe."
Fianna Fáil's Billy Kelleher asked if we pay higher medicine costs in Ireland as a sweetener to bring multinational companies here.
Ms Daly said: "Our parent companies do have significant investments in Ireland but the methodology for pricing medicines is completely independent of that."
