Paddy Burke (Fine Gael)

I welcome the Minister for Health and Children, Deputy Harney, to the House. This is a very important debate about an issue which goes to the core of our health service. The patient is at the centre of this issue. The pharmacists are providing a wonderful service throughout the country.

I ask the Minister to clarify who sets the prices of drugs with the drug companies in this country. Is it the Minister who sets the price? She is getting the credit for setting the price and I presume it is she who does so. I wish to know who is fully responsible for setting the price for drugs and that should be our starting point.

How did the Minister arrive at the price proposal whereby pharmacists will be paid the invoice price for drugs, less 8%? Why is the figure not 7%, for example, or 10%? How was the figure of 8% decided upon?

Senator Jim Walsh referred to the independent arbitrator but, unlike him, I believe the pharmacists and their union, the IPU, have acted very responsibly in this dispute, which has been going on for more than a year. The pharmacists' union should have been allowed to negotiate on behalf of its members. The pharmacists sought the appointment of an independent arbitrator. Why did the HSE not allow an independent arbitrator to negotiate and come to some agreement with the pharmacists? I believe it was because the Minister for Finance decided he would take €100 million out of the budget for health, end of story. The Minister for Health and Children found herself short €100 million and decided she could not afford to have an independent arbitrator in place because every month the dispute continued would cost the Department €8 million to €10 million. No-one could say when the independent arbitrator would report and every month the issue went unresolved, the Department would lose millions. That is why the Minister for Health and Children did not put in place an independent arbitrator.

It is incredible that pharmacists will invoice the HSE and will be paid 8% less than the cost of the drugs. I cannot get my head around this, to be honest. I heard the Minister state there is a mark-up of 17% on drugs. If that is true, why does the Minister not pursue the wholesalers? Why is she taking the pharmacists to task? The pharmacists do not know where they stand now. They must stock their shelves, heat and light their premises, put in place security measures and ensure a pharmacist is available at all times to dispense the drugs for which the HSE will now pay €5. I do not understand how the Minister arrived at the figure of 8%. She referred to a 17% margin but it is the Minister who sets the price of the drugs. The wholesalers do not seem to come into the equation at all. There is a 17% margin somewhere but the Minister is going to take it off the pharmacists.

Let us examine the 8% the pharmacists are supposed to be getting in rebates. The Minister referred earlier to the cost of money being in the region of 4% to 5% but I urge her to come into the real world. Where can one get borrowed money at 4% to 5% interest? Perhaps the HSE or local authorities can borrow money at 4% or 5% but I do not know any small business that can borrow money, on overdraft, at those rates. If it is possible to borrow money at those rates, perhaps that is the road the Minister should go down. She should give soft loans to pharmacists to stock their shelves with drugs and provide the services. Certainly all of the overdraft facilities of which I am aware are in the region of 10% to 12%.

The 8% rebate the pharmacists receive is not for only one element of the service they provide. It comes as a result of investments made in the past ten to 15 years. The system has been computerised and they pay in 30 or 60 days or pay cash on demand of invoice. This is from where their 8% comes. Hard-pressed pharmacists are providing wonderful services throughout the country and receive twice-daily deliveries from wholesalers. Will the Minister for Health and Children, Deputy Harney, tell us whether the HSE, will pay in 30 or 60 days or pay cash on demand of invoice? This is something pharmacists need to know.