Máire Hoctor (Tipperary North, Fianna Fail)

I will respond to this Adjournment matter on behalf of my colleague, the Minister for Health and Children, Deputy Harney.

Following the completion of new IPHA and APMI agreements with drugs manufacturers in 2006, the HSE announced new arrangements for the wholesale margins on 17 September 2007 which affect the price basis for the supply of drugs and medicines to the State. This is distinct from the dispensing fees paid to community pharmacists under the GMS and the drugs payments scheme. The new pricing arrangements for community supply were planned to take effect from 1 January 2008 for wholesalers and due to the structure of the reimbursement system would have come into effect from 1 December 2007 for community pharmacists.

The Minister has previously outlined in detail to the House the legal issues arising under competition law in regard to the collective negotiation of fees, prices or margins by undertakings or associations of undertakings. A process of dialogue was established under Mr. Bill Shipsey, SC, to address concerns expressed by the IPU about the implications of legal advice on competition law on the right of the IPU to negotiate fees or margins with the HSE on behalf of community pharmacists. In view of the engagement under Mr. Shipsey at the time, the HSE decided to defer the implementation of the new reimbursement rates which were planned to take effect for community pharmacists on 1 December 2007. The HSE continues to keep community pharmacists informed of its intentions regarding implementation of the new arrangements, which is now planned for 1 March 2008.

In consultation with the Attorney General, other relevant Departments and the HSE, the Minister has been exploring the best way of progressing the development of a new contract with pharmacists. To this end, a process was proposed to the IPU at a meeting on 5 December 2007 by the HSE under Mr. Shipsey's aegis to address pharmacists' immediate concerns regarding the alleged impact of the proposed revised wholesaler arrangements on GMS dependent pharmacies and provide a basis upon which discussions on a new substantive contract could commence. The IPU was not prepared to accept this proposal from the HSE and, accordingly, no further discussions have taken place under Mr. Shipsey.

Notwithstanding the failure to reach agreement, the HSE has offered a draft interim contract to pharmacists to address their main concerns regarding the alleged impact of the proposed revised wholesaler arrangements on the GMS dependent pharmacies. The details of the draft interim contract, and the HSE's other intentions in this regard, were set out in a letter to individual community pharmacists on 2 January 2008. The HSE intends to implement the deferred revised wholesaler arrangements from 1 March 2008. The executive also recently held preliminary discussions with the IPU on the development of a new substantive pharmacy contract.

The Minister has asked me to assure the House that the Department is working to develop appropriate arrangements for the negotiation of contracts and setting out the fees payable in respect of contracts with private sector undertakings for the provision of health services on behalf on the HSE. These arrangements may include the establishment of an independent body which would consider the nature of the services to be provided and all other relevant factors in each case and make recommendations in regard to the fees it considers appropriate. The composition of such a body, its terms of reference and the timescale for its work are among the matters to be considered. In line with the legal advice received, the HSE may enter into discussions with community pharmacists on the non-fee aspects of their contract with a view to developing a new substantive pharmacy contract.

The Minister wishes to find a way of adapting the traditional process to arrive at revised pricing arrangements for pharmacy contract, consistent with the legal advice she has received.

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