Paul Gogarty (Dublin Mid West, Green Party)
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Question 50: To ask the Minister for Health and Children her views on the threat to jobs in the pharmaceutical sector posed by the proposed changes in reimbursement of pharmacists for drugs dispensed under the medical card scheme, both at wholesale and at retail level, as outlined in the submissions of representatives of retail pharmacists and of a company (details supplied) to Indecon, and implied by the warnings of potential negative impacts and market disruption contained in the Indecon report on pharmacy wholesale margins; if the potential negative impact of these changes in terms of economic competitiveness and viability on young pharmacists who have incurred high set-up costs in recent years is of particular concern to her; and if she will make a statement on the matter. [31763/07]

Paul Gogarty (Dublin Mid West, Green Party)
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Question 57: To ask the Minister for Health and Children the progress that has been made towards a resolution of the issues involving pharmacists and the Health Service Executive over changes to the scheme for reimbursement of drugs dispensed under the medical card scheme; the role independent arbitration can play in achieving a resolution; and if she will make a statement on the matter. [31764/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 50 and 57 together.

I have previously outlined in detail to the Oireachtas the legal provisions under competition law which prevent the Health Service Executive (HSE) from negotiating with the Irish Pharmaceutical Union (IPU) on fees, prices or margins for their members. When it became clear that the HSE could not negotiate with pharmacists or wholesalers on fees or margins, a detailed, fair and transparent consultation process, including independent economic analysis and public consultation, was carried out to inform the final determination of the new reimbursement pricing arrangements for drugs and medicines under the GMS and community drugs schemes. 161 submissions were received by the HSE, of which 143 were from community pharmacy contractors. These new arrangements were announced by the HSE on 17th September 2007. The new price arrangements for community supply were planned to take effect from 1st January for wholesalers and, due to the structure of the reimbursement system, would have come into effect from 1st December 2007 for community pharmacists. The independent economic analysis was carried out by Indecon Economic Consultants and was published by the HSE on 13 November 2007. All aspects of the Indecon analysis were considered by the HSE in making its determination. Full consideration was also taken of public submissions received.

In regard to the new reimbursement prices, the main wholesaler companies have confirmed to the HSE that when the new arrangements are given effect, they will charge community pharmacists the same price for these drugs and medicines as pharmacists will be reimbursed by the HSE for these products. Furthermore, there are no changes planned by the HSE to the operation of the GMS medical card and community drugs schemes, and all patients continue to receive their entitlements in the normal way.

My Department understands that the HSE has not received formal notification from any community pharmacist regarding cessation of services under the GMS or the various community drugs schemes. They will be required to give three months notice in writing of any intention to cease providing this service.

To address concerns expressed by the IPU, on behalf of community pharmacists, about the implications of the legal advice on competition law on their right to negotiate fees through the Union, a process of dialogue was established, chaired by Bill Shipsey SC, to explore ways in which concerns raised by the IPU about the implications of this legal advice might be addressed. I am also exploring, in consultation with the Attorney General, the other relevant Government Departments and the HSE, the best way of progressing the development of a new contract with pharmacists. There is ongoing engagement between the Irish Pharmaceutical Union and the HSE under the auspices of Mr. Shipsey and, in view of the progress in this regard, the HSE has decided to defer the implementation of the new reimbursement rates planned to take effect for community pharmacists on 1st December 2007 to a later date.