Frank Fahey (Galway West, Fianna Fail)
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Question 139: To ask the Minister for Health and Children if, before an arbitrary decision is taken to cut fees of pharmacists from 1 March 2008, consideration will be given to the setting up of an independent evaluation of pharmacy services and for a fair and reasonable price to be paid for those concerns, taking into account the concerns and interests of Galway pharmacists; and if she will make a statement on the matter. [7540/08]

Brian O'Shea (Waterford, Labour)
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Question 203: To ask the Minister for Health and Children the proposals she has regarding the concerns of a person (details supplied) in County Waterford; and if she will make a statement on the matter. [8016/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 139 and 203 together.

I would like to reiterate that the revised pharmaceutical pricing arrangements for wholesale delivery were arrived at following a detailed consultation process accompanied by independent economic analysis. This process involved direct discussion with wholesaler companies and a call for public submissions, published on 20th December 2006, in response to which a total of 161 submissions (including 143 from community pharmacy contractors) were received.

Following the completion of public consultation, and informed by the independent economic analysis, carried out by Indecon Economic Consultants, new reimbursement arrangements were announced by the HSE on 17th September 2007. The report by Indecon was published by the HSE on 13 November 2007. All aspects of the Indecon report were considered by the HSE in making its determination.

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.

However, 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.

I met with the Irish Pharmaceutical Union recently and heard their point that there should be an independent assessment of the fees offered. In the light of this, I have established 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 is being chaired by Seán Dorgan, former Head of IDA Ireland. It will take submissions from all sides and will carry out its own analysis. It has been 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 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 Independent Body held its first meeting on 25th February 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 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.

In response to a request to all 1600 community pharmacy contractors from the HSE, two community pharmacists have confirmed their intention to withdraw services under the present pharmacy contract. There are no changes planned to the operation of services under the GMS and community drugs schemes and all patients continue to receive their entitlements in the normal way.