Dara Calleary (Mayo, Fianna Fail)

Every Member of this House has had representations on this issue since we returned in October. It is time that the dispute between the HSE and the IPU is resolved once and for all. We were given assurances before Christmas that an independent process would be initiated to properly adjudicate the varying claims made by both sides. Everybody agrees reform is needed to the general medical scheme and the drug payment system and that prices should be reduced, but the manner in which the issue is being approached is akin to hammering the community pharmacy sector.

Two specific issues arise, the pharmacy discount scheme and the contract which affects the fee per item. The current proposal from the HSE, known as the interim contract, provides that pharmacists will be paid 8.2% less for medicines supplied by community drugs schemes, including the medical card scheme and the drug payment scheme. That any organisation would make such a crazy suggestion reveals a lack of willingness to engage in meaningful discussions. Any discount or rebate scheme received by pharmacists is used to subsidise the current community drugs schemes. The proposal that the discount scheme be attacked means pharmacies will be required to operate schemes on behalf of the Government at a loss. No sector can be expected to manage such a scenario, regardless of how successful it is perceived to be.

Each pharmacy has different discount arrangements with its wholesaler depending on its level of business. The discount identified by the HSE is not necessarily the amount given to most pharmacies. A small rural pharmacy, for example, would have a smaller discount than one in a large town. The proposal for using one discount rate for the entire operation is a false one and it is leading to serious concerns about the future viability of community-based and rural pharmacies. In recent weeks, I have met pharmacists in my county to examine their audited accounts, which they willingly presented. The current interim contract proposal, which proposes a minimum fee of €5 per transaction, could result in the loss of three jobs in every rural pharmacy in the county. The pharmacists are willing to make their figures available for inspection. Nationally, approximately 3,500 jobs could go in the pharmacy sector, with an annual wage loss of €15 million.

The town from which I come, Ballina, has a proud history of wholesaling. United Drug was established in the town 60 years ago by local GPs who wanted a different way of supplying drugs. The company is now one of the biggest drugs wholesalers in Ireland and Britain and employs 120 people. It is important to note that United Drug does not own any individual pharmacies. Its ethos is to support local pharmacies. I am concerned that the HSE's current attitude will have an impact on the company's 120 employees who provide annual wages to our town of €3.5 million.

Since I was elected last June, the one issue that regularly arises in this Chamber is that the HSE is not working. However, the one part that works very well is the local pharmacy. As I travelled here today, I listened to an advertising campaign by the HSE encouraging people to attend their local pharmacies or GPs before presenting to accident and emergency units, yet, at the same time, the executive proposes to undermine the sector. On 11 January, the HSE issued a letter to Oireachtas Members indicating its intention to enter into discussions with the IPU and other parties. However, before doing so, it is proposing to undermine the sector by forcing people into this interim contract. I am aware that all sides of the House are anxious for a resolution. The Fianna Fáil Parliamentary Party held a vigorous meeting on the issue earlier this evening and asked the Minister for Health and Children to meet us. The Joint Committee on Health and Children will also discuss the issue next week. Given the 1 March deadline for acceptance of the interim contract, it is important this House is seen to act.

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