James Bannon (Longford-Westmeath, Fine Gael)
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Question 289: To ask the Minister for Health and Children the reason the right of pharmacists to representation by their union, the Irish Pharmacy Union is not recognised; the reason the Health Service Executive has, without negotiation, imposed a new payment structure on pharmacists, ignoring the main Indecon advice which was commissioned by the HSE; the reason there is a lack of analysis by the HSE of the effects of such a payment structure on the delivery of pharmacy services throughout the country; and if she will make a statement on the matter. [14667/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I would point out that the Government and the Health Service Executive (HSE) recognise the Irish Pharmaceutical Union (IPU) as the representative body for its members.

I have previously outlined in detail to the House the legal provisions under Competition Law which prevent the HSE from negotiating with the 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 transparent consultation process, including independent economic analysis by Indecon Economic Consultants, was carried out to inform the final determination of the new reimbursement pricing arrangements for drugs and medicines under the medical card and community drugs schemes. These new 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.

A process of dialogue was established under Mr. Bill Shipsey SC to address concerns expressed by the IPU, on behalf of community pharmacists. At a meeting between the HSE and the IPU under Mr Shipsey SC on 5 December 2007, a proposal was outlined to the IPU to (i) address their immediate concerns regarding the alleged impact of the proposed revised wholesaler arrangements on GMS-dependent pharmacies and (ii) to provide a basis upon which discussions on a new substantive contract could commence. The IPU was not prepared to accept this proposal from the HSE and, accordingly, no further discussions have taken place under Mr Shipsey's aegis since then.

In response to demands from community pharmacists to address the alleged impact of the new wholesale pricing arrangements, the HSE has offered a voluntary interim contract with a flat rate dispensing fee of not less than €5 for all dispensing under the GMS and community drugs schemes.

I have also established an Independent Body to assess an interim, fair community pharmacy dispensing fee to be paid for the medical card and community drug schemes. This Body is being chaired by Mr Sean Dorgan, former Head of IDA Ireland. It has been asked to make its recommendations by the end of May 2008.

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. If approved by Government, it will be backdated to the date from which any individual community pharmacist may choose to avail of the HSE's offer.

Accordingly, each community pharmacist will have three options: to avail of the interim contract as recently offered by the HSE; 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.