Not such a bitter pill for pharmacists
The disgraceful decision of pharmacists to withdraw the methadone distribution service from some of the most vulnerable people in society, recovering drug addicts, brings into focus the high costs of medicines and profits of pharmacies.
With profit margins of 33pc, Irish pharmacists enjoy the highest profit margins on medicines anywhere in Europe, according to a competition law expert.
A recent independent study by Declan Purcell, a senior Competition Authority official, found that pharmacists have an average retail margin of 33pc on all prescription drugs.
This translates into an operating profit of €33 on every €100 of medicines sold.
Mr Purcell pointed out that the price of medicines in Ireland is significantly higher than other EU countries, despite the fact that the pharmacy sector is less heavily regulated in the Republic than elsewhere.
In a report published in 2004 by the Policy Institute at Trinity College, Mr Purcell outlined how Irish pharmacists enjoy margins from 19pc to 45pc across a range of medicines.
The report is a little dated now but there has been no new research on pharmacy profit margins in the meantime.
Not surprisingly, the Irish Pharmaceutical Union (IPU), which represents more than 1,400 pharmacists, challenged these conclusions.
It has long been known, by those who have ever looked at the pharmacy sector in any detail, that private prescriptions are the most profitable line for the pharmacists.
All of this needs to be kept in mind as the pharmacists engage in industrial action, targeting recovering addicts by pulling out of the methadone service.
The pharmacists are angry that the Heath Service Executive (HSE) has lowered the reimbursement they receive on drugs for medical card holders.
The Irish Pharmaceutical Union (IPU) says this will slash profit margins for its members and, in some cases, lead to drugs being sold at a loss.
IPU members have claimed the average pharmacy will see an income reduction of between €70,000 and €80,000 a year. The union claims the HSE cuts will come straight off their bottom line.
If that happens we should have little sympathy for them. Retail pharmacy in Ireland is extraordinarily profitable. The margins, as outlined above, are sky-high and pharmacies are changing hands for as much as €4m per outlet in urban areas.
The public, and in particular the buyer of private prescription medicines, has been fleeced for years.
It is high time pharmacists stopped bullying recovering addicts and accepted the cuts in their fees for General Medical Services (GMS) medicines.
Pharmacists: you have lost this one, now go and take your medicine.
- Charlie Weston
