Two sides deadlocked over drug fees as deadline looms

Why are 776 pharmacists withdrawing from dispensing to customers under State drug schemes from August 1?

They are protesting at the decision of Health Minister Mary Harney to reduce their payments since July 1.

Pharmacists' payments come in two parts from the State -- they get a fee for dispensing to private patients availing of the Drug Payment Scheme and also for medical card holders.

They also get a mark-up for the private patients but not for medical card holders.

The minister reduced this mark-up from 50pc to 20pc. But the way the fees are calculated, they were restructured on a sliding scale which the HSE says will see pharmacists doing better than before the change.

They will lose out on the mark-up for private patients but this accounts for just 25pc of their State business.

The minister also reduced the wholesale mark-up for wholesalers who deliver drugs to pharmacists from 17.66pc to 10pc. The overall aim is to save €50m this year and €133m over a full year.

• What are the pharmacists' views on this?

They say that the cuts will remove €84m from the community pharmacy sector and not €55m as claimed by Ms Harney. It will eliminate over 70pc of the net profit in the sector and put 5,000 jobs at risk.

• Does the Health Service Executive (HSE) realise their difficulties?

The HSE says the way the pharmacists calculate their figures is disingenuous. They received €300m in fees and €130m in mark-up payments last year. The HSE says they need to factor in the mark-up as income. On top of this the pharmacists get €100m in discounts from wholesalers, it claims.

The €133m taken out of the sector is €77m from the wholesalers who received €210m last year and €56m from the pharmacists who got €430m in fees and mark-up, says the HSE.

Undoubtedly, some pharmacists will be in financial trouble as a result.

But the HSE insists that the State income is just one strand of a pharmacist's business and they also have their private income from non-prescription drugs, cosmetics and other products.

The pharmacists insist they have suffered a loss in these areas too, like most retailers in recent months.

• Is there any way out of this deadlock?

The two sides cannot negotiate on fees because it is against competition law. The Irish Pharmacy Union can make a submission on fees. It says it is willing to take some pain but it has to be proportionate.

There is no sign at this stage of the minister backing down. She said the previous cost to the taxpayer of delivering drugs under State schemes to the customer was unsustainable.

The pharmacists have a point when they highlight the failure of the Government to work out an agreement with the drugs companies here to save millions by use of more generic rather than expensive branded drugs. Ms Harney says they are due to start negotiations on a new pricing agreement with the companies and this will definitely be on the agenda.

• What is going to happen from August 1?

According to the HSE, around 867 pharmacies will continue to dispense drugs under the schemes as normal. But there will be blackspots where pharmacists are withdrawing services in Mayo, Donegal and west Kerry.

The HSE is to set up dispensaries to cater for people in various locations in these counties. But people should plan ahead next week and have their prescription filled to avoid having to go to the temporary dispensaries.

Regular pharmacists point out that staff at these dispensaries will not know the medical history of patients.