Mary Harney (Dublin Mid West, Progressive Democrats)

I am very happy to be here to respond to the debate. I wish to correct the record, I have spoken on this issue in this House on two occasions since last summer. This is not the first time I have come to address the issue relating to pharmaceutical pricing and my view has not changed in the intervening period.

There is no change in the contract between pharmacists and the Health Service Executive. Pharmacists have a contract with the Health Service Executive which provides for the payment of a dispensing fee of €3.26 for items on the GMS and for a mark-up of 50% and a dispensing fee of €2.60 for the DPS. That is the contract and it has not been broken. In 2005 pharmacists, by way of fees, got €293 million; in 2006 they got €321 million; in 2007 they got €367 million. That figure is not being altered. I remind Senator Doherty that these payments amount to, on average, €100,000 more than is paid to pharmacists in Northern Ireland. I accept there are caveats when comparing different jurisdictions.

The Government does not have an agreement with the pharmaceutical sector in Ireland. Ireland is now part of a basket of nine countries where we pay the average price. Unfortunately, with pharmaceutical products, the normal market does not apply because in most instances there are monopoly suppliers of various drugs. One does not have the option of putting an advertisement in the newspaper for different companies to supply drugs across the whole range of medicines that are required in the health service. Therefore, Ireland, like all other Governments, negotiates with the producers of those goods. We have negotiated, from a position where we were part of a basket of five countries — the most expensive five in Europe — to a position where we are now part of a basket of nine countries and we will pay the average price in that basket. That basket includes countries such as Spain where drugs are substantially cheaper than in Ireland.

As a result of this decision to reduce the distribution cost I was asked why we do not take it from the wholesalers. We do not have a contract with the wholesalers. There has never been a contract between the State and the wholesalers. When the HSE and the Department negotiated in good faith with the wholesalers they produced the legal advice. They were the first to do so. I reiterate what I said here, we have a virtual market. Some 400 pharmacies own UniPhar, one of the big wholesalers, a further 150 pharmacies have been financed by a financial wing known as IPOS. Cahill May Roberts is the owner of Unicare, which has 72 pharmacies and United Drug has put €300 million into pharmacies. Given that, perhaps, between 700 and 900 pharmacies are owned by the wholesalers. We do not have a separation in the way many of the Senators tried to portray.

In 2002 when my predecessor, the Minister for Health and Children, Deputy Martin, removed the restriction which essentially provided that a pharmacy could not be opened within a certain short mileage of another pharmacy — it prevented many places in the country from having pharmacies — I could embarrass some Members here by telling them what their party said. Some said it would bring to an end the pharmacy in the rural Ireland, they would not be viable, they would not be economic and so on. He was heavily criticised in this House by the then Opposition and in the other House. We know that since then there has been an increase of 26% in the number of pharmacies.

I am usually attacked here and elsewhere for supporting the private sector. The party opposite accuses me of Americanising the health service and supporting private companies. This is private enterprise. The pharmacists are health care professionals who have invested in private businesses. Nobody more than me wants to see people getting a decent return on risk taking, innovation and making their business work. That is the reason why in the 2005 Bill, when we published our proposals, which was only passed in 2007, we facilitated liberalisation here ahead of many other European countries. It used to break my heart to meet Irish pharmacists who qualified abroad, due to the restrictions on trying to become a pharmacist here because there was only one school, and who could not open a pharmacy. Nobody more than me wants to facilitate the development of pharmacy.

In the legislation passed we have provided for the regulation for the first time in Ireland of corporate entities, heretofore it was just pharmacists who were regulated. We have also provided in respect of conflict of interests between those who prescribe and those who dispense because a huge concern was expressed by pharmacists, which I shared, to the effect that groups of doctors were coming together, one person would be asked for a huge amount for key money and it would be very hard for other pharmacists to compete in the environs where the patients come from the doctor and they have their prescription. We have provided very strong provisions in the new pharmacy legislation to prevent that occurring and to eliminate those conflicts.

I do not need any lectures here about supporting the pharmacists and the pharmacy profession. We have to get value for money. We have to get better value for money, for the patients and for the taxpayers. Some 70% of the bills are paid for by taxpayers and we are entitled to ensure we get the best possible value.

In regard to the Dorgan group — I regret very much what Senator Ross said about the individuals — these are highly skilled professional people whose professional reputations matter to them. They are people whom I know individually, personally and professionally. I know them to be people of the highest integrity. In regard to their appointment, I discussed it only with one of my advisers and with the Secretary General of my Department when I was seeking to put a group of what I regarded as fair-minded competent citizens together to look at this issue.

The pharmacy profession, through its union or through whatever other source, can make the case as strongly as it wishes to that group of people. There are no restrictions in terms of sums of money that I have placed on that group, except that we want them to come forward with a recommendation for a flat fee for the interim contract. We have not broken the contract. This will simply be an interim flat fee that we will pay to those who opt for that. I decided to take this course of action because the IPU was of the view — it made that point strongly to me when I met it — that the mechanism for devising the €5 flat fee was not an independent mechanism and, perhaps, if it was it may be more acceptable. I understand that. That is the reason it is important to have the independent group. Furthermore, we have said that when it makes its recommendations by the end of May we will backdate, subject to Government approval, whatever it recommends to 1 March. That is very reasonable.

It is the future I am concerned about and we all need to focus on it. I hope we can enter into negotiations with the IPU for a new contract for the community pharmacist. Clearly, we cannot set the prices in that context. We must have a different independent group to set the price but there is no point establishing such a group until we know what we are asking it to price. In particular, I want to see the role of the pharmacist more involved in primary care, in chronic illness management and dealing with many of the issues involving waste which many Members have mentioned.

Senator Norris mentioned the training places for those who are currently studying pharmacy at Trinity College. This is an issue I have discussed with the pharmaceutical society and the regulatory body during the past fortnight. I hope we will be able to address the perceived difficulty that exists which, in fairness, may be a real one. We do not want to train and educate potential pharmacists without giving them the opportunity to complete their training with a view to establishing themselves as pharmacists, hopefully in the Irish health care system. I hope that issue can be resolved.

In regard to the contingency arrangements and the phone line, I understand there have been approximately 300 calls, most of which came before last week, although the line is still available. The patients have all been reassured. Contingency plans will be put in place and I accept what many Senators said. I commend the comments of the president of the IPU and others. I know these situations are difficult for all organisations but I commend the comments made and the fact that, to date, patients have not been used in this conflict between the Health Service Executive, the Department of Health and Children and the pharmacy profession. I hope that continues to be the case. I am more than happy to take specific questions from any of the Members.

I understand the HSE pays 14 working days after the bills are submitted. With regard to pricing, invoices and so on, I am not a party to how the wholesalers deal with invoices between them and pharmacists — that is a matter for them. What I am certain of is that no pharmacist will be asked to pay more for a product than he or she will be reimbursed by the HSE. Nobody would expect anyone to do business with them if they were to charge them more than they were to be reimbursed. I do not buy that.