Mary Wallace (Meath East, Fianna Fail)
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Question 141: To ask the Minister for Health and Children if she has reviewed a briefing note (details supplied); if, in view of the figures presented in this submission, she will confirm if her original published figures remain correct; if she will provide an explanation for the €36 million difference; and if she will make a statement on the matter. [26615/09]

Mary Wallace (Meath East, Fianna Fail)
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Question 142: To ask the Minister for Health and Children if she has reviewed the submission (details supplied); her views on these proposals and the suggestion that €85 million can be saved from these proposals; and if she will make a statement on the matter. [26616/09]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 141 and 142 together.

I have seen the briefing note from the Irish Pharmacy Union (IPU) referred to by the Deputy. The briefing note was circulated by the IPU in response to my announcement of a series of measures, under the Financial Emergency Measures in the Public Interest Act 2009 to tackle the rapid growth in the cost of distributing and dispensing drugs in Ireland. These measures are absolutely necessary for two reasons. Firstly, the cost of the community drugs schemes has doubled since 2002 to over €1.6 billion in 2008: and fees and other income earned by pharmacists have doubled accordingly. Secondly, it cost an exorbitant €640 million to get €1 billion of drugs from the factory gate to the patient in the community in 2008. This has to be reduced. Given the current financial circumstances of the country - indeed, in any circumstances - this growing level of cost is unjustifiable and unsustainable.

Savings from the combined effect of these measures have been estimated at €55 million for the remainder of this year and €133 million on a full year basis. This is almost exactly what would have been saved if I had imposed an across the board 8% reduction in fees and retail mark-ups and re-imposed the reduction in wholesale mark-up to 8%, as attempted by the HSE last year. However, I have decided to achieve broadly the same level of reduction through a revised common fee structure for dispensing, a reduced retail mark-up, removal of the special payment for over-70s dispensing which is no longer appropriate given the changes in medical card eligibility arrangements, along with the lesser wholesale reduction.

The approach I have taken addresses pharmacists' concerns that the current GMS dispensing fee is inadequate and provides for a standard dispensing fee structure across schemes. This will benefit pharmacies serving remote areas and socially deprived communities.

My Department and the HSE are continuing to examine all aspects of pharmaceutical expenditure with a view to containing costs. The potential savings identified by the IPU, apart from an amount relating to pharmacists' dispensing fees, refers to items which are already being pursued. In regard to the greater use of generic medicines, the report of the group chaired by Dr Michael Barry made recommendations which are the subject of ongoing assessment by Departmental, HSE and IMO representatives. These include specific measures that would deliver more cost effective prescribing by GPs, greater use of generic preparations and quality prescribing indicators.

In regard to the agreements with pharmaceutical manufacturers, a separate report published by the National Centre for Pharmacoeconomics in May 2009 has concluded that an estimated total of €248.5 million will be achieved in savings due to off-patent price cuts, up to August 2010, when that agreement ends. Finally, the HSE is already exploring options for greater efficiencies in the procurement of drugs under the High Tech Drugs Scheme.

I am satisfied with the accuracy of the figures quoted above regarding the current costs to the state of drugs and medicines and also the impact the new measures announced will have. I do not propose to speculate on the calculations presented by other stakeholders. However, if the Irish Pharmacy Union wishes to elaborate on the method by which it made its calculations, I will examine that fully. The IPU has not identified what they believe the total amount their members earn this year from the HSE schemes through fees, mark-ups and discounts; nor have they have they put such an amount in the context of the substantial growth in earnings under the schemes in recent years or in the context of total turnover of the sector.