Bertie Ahern (Dublin Central, Fianna Fail)

There are three issues. The first relates to methadone, the second relates to ongoing negotiations between the HSE and the pharmaceutical organisations about prices and the third relates to the legal position in the context of competition law.

On the first issue, this is a dispute between pharmacists and the HSE over the price of drugs, which the former dispense and for which they are reimbursed. The HSE has set a new price which, because of competition law, could not be negotiated. This issue is separate from the level of fees paid to pharmacists under the community drugs schemes, which amounted to almost €300 million last year.

While disputes have to be resolved by negotiation, there is no justification whatever for bringing recovering drug addicts into a dispute, no matter whether it is called a commercial dispute or an industrial relations dispute. The dispute has nothing to do with people who are doing their best to recover from an addiction problem. The HSE has stated there is a significant clinical risk to clients who revert from a methadone maintenance programme to opiate use. In light of this the action of 140 pharmacists to withdraw services from approximately 3,000 methadone patients is totally wrong and the same applies to threats to withdraw from dispensing drugs to medical card holders. It should be noted that this is not an act of the Irish Pharmaceutical Union and I ask those who are doing this to drug addicts to stop immediately. The latter have nothing to do with the dispute in which the pharmacists are engaged and it is a very unfair way of fighting their cause.

On the wider issue, a number of difficulties are involved in the discussions, which are ongoing. The new price arrangements involve revised rates for community and hospital supply. In the existing arrangements for community supply pharmacists enjoy a wholesale margin of 18%, which is being reduced to 8% from next January and to 7% from January 2009. As regards hospital supply, the new interim margin of 5% will apply from 1 January 2008, with further discounts for efficient ordering of supply in the sector. Savings of approximately €100 million per annum are expected, almost all in the area of community supply, which will mean a reduced price base will apply for all medicines dispensed under the various GMS systems.

The pharmacists have arguments and difficulties with this but we do not have time to go into that. I accept the IPU has concerns on behalf of community pharmacists about the implications of the legal advice in respect of their right to negotiate fees within the State. To address these concerns the Minister agreed to the establishment of a process of dialogue, which is chaired by Mr. Bill Shipsey SC, to explore the ways pharmacists' concerns could be addressed, subject to the legal position. The HSE and the departmental negotiating team met with them last week to discuss implementation issues arising from the new wholesale arrangements and both sides have agreed to meet again. They met on 3 October and 11 October, under Mr. Shipsey's chairmanship, and have agreed to continue to engage. Summaries of the HSE's position are in the public domain and an information note has been given to Deputies. The discussions should continue.

The view of the HSE, with which the Government agrees, is that there is considerable room for savings in the overall supply of drugs. The drugs and medicine budget is going up astronomically every year. The figure is enormous and we believe that, using price margins and economies of scale, savings can be achieved. Wholesalers are also involved and have a role to play. As with all industrial relations and supply issues, I could make many arguments if the House had time but the resolution must come from the negotiations.

The legal position can be explained by competition law. Competition law has been examined by the Attorney General and, independently, the HSE and the Irish Pharmaceutical Union. The legal position is based on the Competition Authority view that to deal directly with a large group is to effectively create a cartel, which goes against competition law. The Competition Authority has also made that case in other areas. The legal opinion of the way the Competition Act 2002 is drafted is unanimous and there is no dispute among legal representatives of the parties. Some further examination is taking place but I do not know if anything can be done in that regard. My advice at the moment is to the contrary.

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