HSE set flat pharmacist fee without prior approval

A DRAFT interim contract for community pharmacists which set out a new flat-rate dispensing fee was sent out by the Health Service Executive (HSE) without the agreement of either the Department of Health or Department of Finance, it has emerged.

The contract was issued on January 2nd by the HSE to pharmacists, and offered a new flat rate dispensing fee of not less than €5 in most of the community drug schemes.

The HSE maintained that this would directly benefit pharmacists with a greater number of medical card patients, and address concerns about the impact on their businesses of controversial new arrangements to reduce the margins paid to pharmaceutical wholesalers.

However, within days, the Department of Health wrote to the HSE stating it had made it clear previously that the proposed draft interim contract should have been submitted to it and the Department of Finance for approval in advance.

The HSE replied that the inclusion of an indicative fee in the draft contract sent to pharmacists had been based on legal advice.

The HSE told the Department of Health that it believed it was important it moved to introducing the new wholesale margin arrangements.

"HSE management felt, in that new environment, it was critical to write directly to all community pharmacists outlining our proposals and providing as much information as possible to them. Hence the decision to forward the updated contract and specify an indicative flat fee," it said.

In subsequent correspondence, the Department of Health said that the key issue in the situation was that the HSE had undertaken to pay a new minimum flat fee without getting its prior approval.

In a statement yesterday, the HSE said it had prepared a draft interim contract last December and that a copy had been sent to the Department of Health at the end of that month seeking its observations.

"A copy of the draft contract with covering letter dated January 2nd was then forwarded to each community pharmacy contractor for comments and feedback as part of a consultative process.

"Contractors were given three weeks to consider contents and provide feedback. On January 11th, the department advised the HSE that it required its approval prior to offering the contract."

The HSE said that, on foot of the feedback received, a number of changes were made to the draft interim contract and a revised document was forwarded to the Department of Health on February 19th.

"On February 21st, the department advised that the interim contract should be offered to the cohort of community pharmacy contractors," it stated.

It is understood that few, if any, pharmacists have opted to take up the new interim contract on offer.

An independent body is currently pricing a new contract for pharmacists.

Under their existing contract, pharmacists are paid a fee of €3.27 for each item dispensed to medical card patients.

Under this new scheme, they receive no mark-up on the drugs, which are sold at cost price. For patients claiming under the drug payment and long-term illness schemes, pharmacists receive €2.86 per product and a mark-up on drugs of 50 per cent.