Jimmy Devins (Sligo-North Leitrim, Fianna Fail)

I am taking the Adjournment debate on behalf of my colleague, Deputy Mary Harney, Minister for Health and Children.

I welcome this opportunity to inform the Dáil of the current position. The recently announced changes by the Health Service Executive to the wholesaler arrangements for the supply of drugs and medicines to community pharmacists, for dispensing under these schemes, were informed by a comprehensive consultation process when it became clear that the HSE could not negotiate with pharmacists or wholesalers for legal reasons.

Under section 4 of the 2002 Competition Act, the Pharmaceutical Distributors Federation, representing wholesalers, and the Irish Pharmaceutical Union, representing pharmacists, may not collectively negotiate fees, prices or margins on behalf of their members since both bodies constitute undertakings under the Act. Accordingly, it is not possible for the State to negotiate with the PDF or the IPU on fees or margins as such negotiations would place these bodies at risk of prosecution. I have already outlined in detail how the legal issues evolved in recent written replies to several Deputies, and in the Seanad last week.

Following the completion of public consultation by a HSE-led negotiating team and informed by independent economic analysis carried out by Indecon Economic Consultants, new reimbursement arrangements were announced by the HSE on 17 September 2007. The new price arrangements involve revised rates for community and hospital supply. For community supply, the reimbursement rate of cost of drugs and medicines to pharmacy contractors will be reduced from ex-factory price plus 17.66% for wholesale supply, the previous mark-up rate, to ex-factory price plus 8% from 1 January 2008 and 7% from 1 January 2009, the new mark-up rate. For hospital supply, there will be a new interim mark-up rate of 5% for wholesale supply from 1 January 2008, with further discounts for efficient ordering and supply in that sector.

In its examination of the issues involved and in determining the new arrangements, the negotiating team considered a reimbursement level that reflected the market value of pharmaceutical wholesale services, and security and continuity of supply at current levels to patients. The evidence on which the decision is based, following examination of the issues involved, direct consultation and independent economic analysis, all indicates that the State is currently paying a premium for the services in question. It is possible and necessary for revised arrangements to be put in place without a substantial impact on the delivery of such services. Pharmacists' arrangements with wholesalers for the supply of drugs and medicines are private commercial arrangements. The HSE's role is confined to setting the most appropriate reimbursement rates for community pharmacies. The basis for the new reimbursement arrangements was set out in detail by the chief executive officer of the HSE on 17 September 2007.

To address concerns expressed by the IPU on behalf of community pharmacists about the implications of the legal advice on competition law for their right to negotiate fees through the union, a process of dialogue was established, chaired by Bill Shipsey SC, to explore ways in which these concerns could be addressed, having regard to the legal position. A number of meetings have been held, involving both the IPU and the HSE, under the auspices of Mr. Shipsey. At a meeting on 11 October, the IPU informed Mr. Shipsey that it continued to have difficulties, as the trade union representing pharmacists, with the fact that it was precluded from negotiating fees or margins with the HSE on behalf of its members.

The pharmacists' action in withdrawing from supplying methadone to patients is currently mainly in the Dublin area, with a threatened escalation country-wide later. This is the second time in recent years that pharmacists have targeted this scheme in response to unrelated issues, although on the previous occasion the threatened withdrawal of service did not take place. It is completely wrong that certain pharmacists have chosen to target some of our most vulnerable patients, recovering drug users who are stable enough to be treated in the community setting, in this way. As of Monday 15 October, some 140 pharmacists in the Dublin area have withdrawn from the methadone protocol scheme. This action affects approximately 3,000 patients. I am sure Deputies will join me in calling on those pharmacists to withdraw this action.

Since last Monday the HSE has been implementing a contingency plan and made alternative arrangements for the emergency dispensing of methadone to the patients involved in 13 centres. Arrangements have been put in place to enable patients affected by this action to be informed of these alternative arrangements. The HSE's drug helpline is available on a seven days a week basis to provide information for clients about the contingency arrangements. The situation in the rest of the country is being monitored closely and arrangements are ready to be implemented in the event of an escalation of the action nationwide. The contingency arrangements are being overseen by an emergency planning group which is liaising with other agencies as necessary. The HSE has indicated that to date the contingency plan is operating satisfactorily.

In an effort to address concerns on all sides, a meeting has been organised this afternoon with the Irish Pharmaceutical Union and the HSE under the auspices of Mr. Shipsey who, I understand, has put some proposals to both sides.

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