This will allow the state to get better value for money on drug costs over the life of the agreement, given that prices drop over time in other basket countries. PCRS reduction (Community schemes): the discount on PCRS (currently 4%) will be increased to 5.25% from 1 June 2016 and from 0.25% to 5.5% from 1 August 2018. Hospital discount: A new measure of this agreement is that a discount of 5.25% from 1 June 2016, which increases to 5.5% from 1 August 2018, now applies to hospital products. Discounts for small molecules in case of loss of exclusivity: the price of existing expired medicines is reduced to 50% of the initial ex-works price. There will be no gradual reduction to 50%, as was the case in the 2012 agreement. Reduction of biologicas when biosimilars enter the Irish market: the price of biologics is reduced by 20% and the discount is increased to 12.5% upon entry into the biosimilar market. Biosimilars play a key role in improving the cost-effectiveness of the drug bill in the coming years and this clause strikes the right balance between reducing the price paid by the HSE and promoting new biosimilars on the markets. New reimbursement principles: A revised set of principles and processes, in line with the 2013 Health Act, will support the evaluation process for new medicines with greater transparency and security. The deal was welcomed by Health Minister Simon Harris, who said the pricing rules were a “significant improvement” over previous agreements.