Seanad debates

Wednesday, 31 January 2007

7:00 pm

Photo of David NorrisDavid Norris (Independent)
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I wish to express my gratitude to my colleagues who allowed me to speak first because I have an engagement.

Rory Kiely (Fianna Fail)
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Senator Norris has five minutes

Photo of David NorrisDavid Norris (Independent)
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The matter I wish to raise is a question involving pharmacists and their right to be represented by a trade union in their wage or fee negotiations. This right is being denied, which is very regrettable. A legal precedent exists in this regard. This is by no means the first time I have come across this issue, which is the crazy notion of competition. Competition should benefit the citizen. It is perfectly clear in this case that it is not doing so, particularly in light of the pharmacists' case. The previous case involved actors who are the most poorly paid section of the community. Irish Actors Equity and the actors' trade union, SIPTU, got in touch with me because actors were being denied the right to be represented by their union in dealing with the moguls of the film industry in getting fees for voice-overs and such matters. What we are doing here tonight in the Seanad is representing the little man, woman and citizen against big interests and their right to a level playing field. Competition should underpin and not undermine that.

I have received a number of letters in this regard and I am sure the Minister has also. One letter from a well-known chemist in Clontarf said that pharmacists' right to be negotiated for is being undermined. The letter stated:

This move comes on top of a series of attacks on the ability of a community pharmacist to make a living. The HSE has been avoiding entering talks on medical card payments for three years. Both the Department and the HSE have failed to implement a mediation process, as agreed, on the over 70's Agreement or to implement the Monitored Dosage System agreed in 2001, while I find myself undertaking a large amount of extra work and expense for patients who cannot manage their medication without blister packs, while I am only paid a ridiculous basic fee, and no mark up. Pharmacists feel under constant attack, and our only means of negotiation (when the HSE or Department bother to negotiate, or stand over agreements) is now being removed.

This is one letter. I will quote from a similar letter, which reads as follows:

Dear Senator David Norris,

I am extremely concerned that the Health Service Executive (HSE) is challenging my right as a pharmacist, to have my trade union (the Irish Pharmaceutical Union) negotiate on my behalf fees for services I provide under public [sic] funded Community Drug Schemes. This approach, I understand, has the support of the Department of Health and Children. This position is totally unacceptable to me and my colleagues and I am calling on you to have this decision reversed immediately.

It is rather flattering that this gentleman thinks I can have it reversed immediately. I cannot do so, but I can make some representations. Once again, it looks to me as if the Department or the HSE are trying to pick off people individually in order to place them in a weak situation. Once again, one has a large enterprise, the HSE, refusing to deal with a representative group of similar size and power on the other side and picking off the easy targets one after the other.

The final letter I wish to put on the record comes from Sligo because I do not want it to appear to be a Dublin-centric matter. The writer of the letter stated that he was a pharmacist working in the community. The letter stated:

The HSE wish to reform the fee structure for these schemes as they have every right to do so. However, I am extremely angry at the way in which the HSE have chosen to approach this matter. I am an independent Pharmacy owner and am normally represented by my union — the Irish Pharmaceutical union in matters which affect the industry as a whole. The HSE is now challenging my right as a pharmacist to have my union negotiate on my behalf fees for the services I provide under the Community Drug Schemes.

The letter stated that this affects not only this pharmacist in question but also the employees. The letter from the HSE is fascinating and quotes the law. One paragraph of the letter states:

I wish to inform you that the HSE has been advised that Section 4(1) of the Competition Act 2002 ("the Act") prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the restriction of competition, including in particular agreements to fix prices, unless the agreement, decision or concerted practice meets certain conditions.

That is supposed to be against cartels. It is not supposed to be against individual pharmacists and poor, unfortunate, out of work actors. There is something lousily wrong here. The Minister of State may well say the Government's hands are tied and that this is what the Oireachtas passed. If so, the Oireachtas should re-examine the matter because it is absolutely indefensible.

The letter goes on to state that "it should be noted, in particular, that the entering into of an agreement, making of a decision or involvement in a concerted practice in contravention of Section 4(1) of the Act is a criminal offence". We are actually threatening pharmacists, who are respectable and decent people, and out of work actors with criminality because they want to be represented by a union. This is a frightful situation and I can tell the Minister of State that I was here when this legislation was passed and that this was not in the mind of the Oireachtas. We did not think we were going to penalise the small person and have a skewed playing field. It is perfectly clear this is what we have here.

Rory Kiely (Fianna Fail)
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The Senator's time is up.

Photo of David NorrisDavid Norris (Independent)
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That is fairly appropriate because I think I have made the principal points. I know the Minister of State's script has been already prepared by civil servants for him to regurgitate. This is the way with everybody. The Minister of State is a decent man, but I ask him to take on board the arguments and see if we can have an amelioration on this issue because it is the small person who is being affected.

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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I thank Senator Norris for raising the issue and apologise for the absence of the Minister for Health and Children, Deputy Harney.

In 2005, against a background of rapidly rising drugs costs in the general medical services scheme and community drugs schemes, a process was put in place by the Cabinet committee on health. This process aimed to examine all aspects of the drugs supply chain and achieve greater value for money in the pricing and supply of drugs and medicines to the health services, consistent with patient safety and continuity of supply. A HSE-led negotiating team, with representation from the Department of Health and Children, was set up to advance this process.

In mid-2006, the negotiating team reached agreement with the Irish Pharmaceutical Healthcare Association, IPHA, and the Association of Pharmaceutical Manufacturers of Ireland, APMI. As part of the process, the team then began discussions with the wholesaler representative body, the Pharmaceutical Distributors' Federation of Ireland, PDF. However, PDF advised the State that a legal issue prevented it from negotiating a new margin for supply to community pharmacies.

The HSE sought legal advice, which showed that the legal issue was wider than the PDF position and had implications under competition law and for negotiations with community pharmacists. Legal advice obtained by the Department of Health and Children confirmed the HSE advice on this issue.

The position is as follows. Section 4(1) of the Competition Act 2002 prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the restriction or distortion of competition. Those conditions are not met in this case. Wholesalers and pharmacy contractors are undertakings. PDF and the Irish Pharmaceutical Union, IPU, are associations of undertakings and come under section 4(1) of the Act. The coming together of wholesalers under the PDF or pharmacy contractors under the IPU to negotiate prices would be a breach of section 4(1). Acting in contravention of section 4(1) is a criminal offence and would expose those parties, their directors, managers and officers to the risk of criminal prosecution. In light of this advice, it is not possible for the HSE to negotiate with the PDF or the IPU on fees or margins.

In the interim, in order to determine new arrangements for wholesale services that comply with competition law, the negotiating team has begun a public consultation process, including an invitation to make submissions, coupled with an independent economic analysis of the Irish and EU markets. This process assumes continuation of current service levels. In view of the implications of the legal advice, the HSE wrote to all community pharmacy contractors, setting out the position in detail and indicating that the HSE is constrained from negotiating fees with the IPU, for the reasons outlined. The union has been fully briefed on the legal position.

The negotiating team will consider, following the wholesale sector review, how best to address this issue for pharmacy contractor services. Meanwhile, the negotiating team has been engaging with the IPU in an open and constructive dialogue. Both the Department of Health and Children and the HSE recognise the IPU as the collective representative body for its members. However, negotiations with the union must comply with the law. All contractual matters other than fees may be negotiated. The negotiating team is considering proposals from the IPU for resolution of this issue, with a view to agreeing a process for contract review that would comply fully with competition law.

Accordingly, the Minister is satisfied there is, and will continue to be, ongoing dialogue with the IPU as the representative body for pharmacists, within the constraints of the legal advice received. I assure the House the Minister wishes to see that dialogue proceeding in a constructive manner.

Photo of David NorrisDavid Norris (Independent)
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I thank the Minister of State for his constructive reply. I have no brief for pharmaceutical combines. I am all in favour of the consumer, as I am one myself. I am currently taking pills. It was stated the recognised union can negotiate for everything except fees. That is nonsense. In light of what I said, I appeal to the Minister of State to urge the Minister for Health and Children to address this anomaly. I thank the House for its indulgence.