Ivor Callely (Fianna Fail)

I was interested to hear the words of various contributors. A view was put forward that in the market place we do not have normal market forces. We know in the grocery industry, and a good friend of mine is involved in the wholesale end of grocery, that issues arose with regard to below-cost selling, hello money and various other matters. Whether one changes the name and it is called "13 for 12", a space on a shelf, bin-end or service, it is a market force.

If the Minister states that we have a group of people who are good marketeers and who have developed their pharmaceutical chain to include a number of pharmacies and are consequently able to use their clout to demand more, then so be it. It is wrong to state that because United Drug, Cahill May Roberts and Uniphar have a number of interests to defend we are now changing market forces.

The current situation is not in the best public interest. I will put on record my understanding of the party of which I am a member, Fianna Fáil. It has always adopted a caring philosophy and put people first while at the same time ensuring value for money and managing the nation's affairs in the people's best interest and benefit. The personnel involved in the pharmaceutical negotiations, particularly the HSE, seemed not to have adopted this caring philosophy. The proposal, and manner in which it has been pursued by the HSE, has done enormous damage.

I am aware the HSE proposal has been on the table for a considerable period of time. I have heard the cases for and against both sides. The positions presented indicate huge variances and it is regrettable that we find ourselves in this position. The HSE has advanced its process of review of the pharmaceutical supply chain and I understand agreements have been made between the HSE and the wholesalers.

I understand that €877.98 million was paid to manufacturers in 2006 and an agreement has been reached with the wholesalers for savings of €65 million. The fees and mark-up paid to pharmacists in 2006 was €321.7 million, of which we now seek to save approximately €100 million. Perhaps the Minister would confirm the accuracy of those figures.

I concur with previous speakers on the service provided by community pharmacists. No community pharmacist would have cut required methadone provision to an addict when it was used as a lever. It may have been threatened but I know many pharmacists went to great lengths to ensure that if an addict would not get methadone in their pharmacies an alternative arrangement was made.

The emphasis on reimbursement and the new contract is causing serious difficulties for community pharmacists and the Minister knows this. It is also causing heightened anxiety among patients. I have heard people talk about the savings to the public. I am not sure what great savings will be made with the various schemes which operate, including the GMS, the LTI and the DPS.

The Minister made a comparison with the North with regard to vaccines. How much of the figure of €1.6 billion, referred to in this debate, is spent on vaccines? I would think it is a minute percentage. The comparison made by the Minister is unfair. I also understand there are only two or three suppliers in the vaccine area. It is a specialised area and some people are prepared to carry loss-leaders or a product for the sake of turnover or other reasons.

The Minister stated she sought the advice of the Attorney General. Did she seek his advice with regard to the HSE changing the contract in place on 1 March and what was the Attorney General's advice with regard to reimbursement?

We all welcome the group established by the Minister. However, is it fair to state it is only examining one matter? We know other issues exist and that this dispute is not only about fees. I would welcome the Minister stating the group will examine not only fees but also reimbursement prices along the lines mentioned by her.

The Minister mentioned facts and figures earlier and I wish to outline others. It has been brought to my attention that pre-tax and pre-interest profits currently run at 13.5% in pharmacies and the impact of an 8.2% reduction in reimbursement prices will hit pharmacy profits by approximately 4.3%. The effect of the interim contract removing the mark-up taken by pharmacists on the DPS and the LTI schemes would be to remove a further 6.5%. The interim contract increase on the script, from 3.26% to 5%, would add back 1.5%. The combination of the 8.2% reduction in reimbursement together with the impact the interim contract would have if implemented would reduce pre-interest and pre-tax profits from 13.5% to 4%. This would mean that 77% of existing pharmacies would be unable to meet their debt commitments to banks. I cite these to also illustrate that we can all marshall facts and figures to sustain our arguments.

The Minister has said she wishes to avoid anxiety among patients or frustration among pharmacists. The pharmacists do not know if they hold €50,000 or €150,000 worth of stock. They do not know what the reimbursement rate will be, how it will be calculated or what mechanisms will be put in place. The community pharmacists have assisted on many other fronts and are willing to reach agreement on this matter.

I have been involved in the health services on both sides, as a Minister of State at the Department and in pharmaceutical sales. This is a very complex matter in which I support the Minister. If we want to attract multinational pharmaceutical company investment, research and development, we cannot prescribe generic pharmaceutical products.

It is regrettable we were not able to ensure harmony and agreement between all players in the dispute. I believe, however, it is still possible. I look forward to the Minister's response and hope she outlines how best we can get a resolution. A three-man independent body only examining one issue will not be the solution.