Shane Ross (Independent)

This is a delicate issue that has caused a great deal of anxiety among pharmacists. It relates particularly to medical card holders.

When artificial prices are being imposed or negotiated between various State bodies, it is important that there be a minimum of interference. In a situation where the State, rightly, has decided that medical card holders must be subsidised, a difficult negotiation between various bodies results, in this case the HSE, the wholesalers and the pharmacists. The issue to be decided upon is the mark-up that is taken by various bodies and the eventual profit that pharmacists actually receive. As the Minister knows, the mark-up wholesalers receive from the HSE on drugs supplied to pharmacies for medical card patients is to be reduced next year from 17.65% to 8%. In January 2009, the figure will be reduced further to 7%. I do not know where these figures came from and I have heard no rational reason why it was ever set at 17.65%, or why it is now being reduced to 8% and then to 7%. Admittedly, there is a difficulty when one introduces figures of this sort, which tend to be arbitrary.

However, the decision to do so arbitrarily, without consultation with the pharmacists, is wrong. It shows a misconception of where pharmacists make money. They make money on the medicines they dispense to medical card patients through deals they negotiate with wholesalers. It is a complicated series of circular transactions, but initially they got a proportion of the 17.65% that wholesalers received. As I understand it, it was up to individual pharmacists to negotiate their own deal with the wholesalers, after which they would be reimbursed by the HSE. This new measure will reduce pharmacists' profits by half or more. It is difficult to say, but it appears that from the lobbying of many pharmacists, some of them will be asked to sell at a loss. If so, we cannot ask them to continue to operate in this fashion. They maintain the new measure will force them to cut corners and reduce overheads.

An additional difficulty is that many pharmacists are claiming the effect of this measure — and we are only talking about medical card holders — will be to threaten closure of pharmacies in the most vulnerable areas where customers include elderly and poor medical card holders. If pharmacists are not making money from selling medicines to medical card holders, the majority, or a large percentage, of their business will be lost. As a result, if what they are saying is correct, it will mean the most vulnerable medical card holders will not have pharmacies in their areas. Therefore, those who are least capable of doing so will have to travel much further to access pharmaceutical services.

I applaud the fact that the HSE is seeking to cut costs in all sorts of areas, but there is no justification for the executive to cut costs if it means the most vulnerable will suffer. The HSE has many problems and there are many areas in which costs could be cut. However, if cuts are made to payments to pharmacists, who are not popular and it is a slightly populist measure, thus forcing them to reduce overheads while operating in a competitive market, the result will be that the weakest consumers may suffer. The Minister is cutting costs in the wrong place. I ask her to examine whether there is room for renegotiating this arbitrary cut. She should consider asking the HSE not to implement cuts in this area.