Charlie O'Connor (Dublin South West, Fianna Fail)
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Question 278: To ask the Minister for Health and Children her views on the proceedings of the meeting of the Joint Committee of Health and Children on 12 February 2008 attended by the Health Service Executive and the Irish Pharmaceutical Union; if her attention has been drawn to the need for acceptable solutions in the matter; and if she will make a statement on the matter. [6309/08]

Dinny McGinley (Donegal South West, Fine Gael)
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Question 289: To ask the Minister for Health and Children if, in view of the possible withdrawal of services of pharmacists from 1 March 2008 and taking into account the urgency of the situation, she will approve the appointment of an independent arbitrator who will report within a specific period of time in order that the crisis can be averted from 1 March 2008; and if she will make a statement on the matter. [6412/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 278 and 289 together.

The meeting of the Joint Committee on Health and Children on 12 February 2008 allowed for a frank and open discussion on the issues of concern to pharmacists arising from the decision to introduce revised wholesale pricing arrangements from 1st March 2008. The meeting also enabled the Health Service Executive (HSE) to outline its plans in respect of the interim pharmacy contract with a flat rate dispensing fee, which it is offering to pharmacists on a voluntary basis to address concerns about the alleged impact of the new wholesale pricing arrangements on GMS-dependent pharmacists, in particular.

I am concerned, in particular, to support pharmacies which have a high proportion of medical card patients and where a dispensing fee of €3.27 applies for most transactions. Many of these pharmacies are in rural or inner city areas and provide an important social and health service. With my support, the HSE has indicated it is prepared to offer a higher fee, of no less than €5 per item dispensed, to community pharmacists, on the basis of an interim contract which would be essentially the same as the existing contract.

The Government is firm in its view that the wholesale mark-up paid on the price of drugs should be reduced to a level that is fair to both taxpayers and wholesalers. The existing mark-up in the range of 15-17.6% is neither reasonable nor sustainable. The decision to pay an 8% mark-up from 1 March, and 7% from 1 January 2009, will go ahead.

At this point, the HSE has not been formally notified by any community pharmacist of their intention to withdraw services under the present pharmacy contract.

I met with the Irish Pharmaceutical Union last week and heard their point that there should be an independent assessment of the fees offered. In the light of this, I am establishing an Independent Body to begin work immediately to assess an interim, fair community pharmacy dispensing fee of at least €5 to be paid for the medical card scheme, the Drugs Payment Scheme and other community drug schemes. This Body will be chaired by Seán Dorgan, former Head of IDA Ireland. It will take submissions from all sides and will carry out its own analysis. It will be asked to make its recommendations by the end of May 2008. Its recommended fee level, subject to Government approval, will be backdated to 1 March 2008. The development of the substantive new contract will get under way immediately and will be completed as soon as possible; this will be done under the auspices of an agreed facilitator and it too will be priced by the Independent Body.

The terms of reference of the Independent Body are: To advise the Minister for Health and Children on the appropriate level of dispensing fee to be paid to community pharmacists for existing services provided under the GMS and community drug schemes having regard to; (i) the overall public interest including the issues of patient safety and continuity of supply; (ii) the fee of €5 per item which has already been offered; (iii) the reasonable costs incurred by pharmacists in providing services under the schemes and the value of the professional service of dispensing; and (iv) the statutory obligation on the HSE to use the resources available to it in the most beneficial, effective and efficient manner to improve, promote and protect the health and welfare of the public; and to submit a report on the matter to the Minister for Health and Children.

The requested date for submission of the report is 31 May 2008. Both the HSE as the contracting body and the IPU as the representative organisation for community pharmacists, along with other stakeholders, will be entitled to make submissions to the Independent Body addressing whatever factors and issues are of concern to them.

The Independent Body will also be entitled to engage whatever outside expertise it requires to assist it with its task. Based on its consideration of submissions received and its own independent evaluation, the body will recommend an appropriate dispensing fee to my Department that would, in its view, represent a fair and reasonable price to be paid for the pharmaceutical service currently being provided by community pharmacists to the HSE under the GMS and community drug schemes.

Each pharmacist will have three options: to avail of the interim contract as outlined by the HSE letter of 2 January 2008 immediately; to accept the interim contract upon the report of the Independent Body; or to stay with the existing retail fee structure until the agreement of a substantive new contract. I believe this provides all concerned with a reasonable way to make the transition to a fair and transparent method of payment for present services and, I hope, greatly developed pharmacy services in the near future.