Pharmacist wins court injunction halting HSE drugs plan

A PHARMACIST has secured a temporary High Court injunction preventing the HSE from changing the way he is paid for dispensing drugs to medical card holders under a controversial new payments scheme.

The proceedings by Niall O'Sullivan will have implications for other pharmacies unhappy with the scheme. Yesterday's injunction, granted by Ms Justice Mary Laffoy, will apply pending the outcome of the proceedings.

Mr O'Sullivan, owner of five pharmacies and beauticians in Limerick, was granted the injunction restraining the HSE from departing or altering the system of payment or means of calculating payment under the new GMS scheme.

He claims the changes to the scheme have more than halved the mark-up of the wholesale price of medicines. He also claims the HSE is in breach of its contract with him under its previous price structure scheme and, as a result, the jobs of his 43 staff were at risk and his business in danger of insolvency.

The HSE denied the claims and argued Mr O'Sullivan was late in bringing his injunction application because he had known about the new scheme for a long time.

Granting the injunction yesterday, Ms Justice Laffoy said she agreed on the evidence provided to her that, as a matter of probability, Mr O'Sullivan's business would be "pushed to the edge" if the change to the scheme went ahead.

She did not think there had been a delay in bringing the injunction proceedings and Mr O'Sullivan could not be faulted for refusing to participate in an interim scheme which the HSE had argued provided for higher dispensing fees for pharmacists.

The court heard that, up to March 1st last, the HSE had paid pharmacists the "ex-factory" or wholesale price plus 17.66 per cent for the medicines. Under the new scheme, that mark-up was cut to 8 per cent and it was further proposed to reduce it to 7 per cent at the end of this year.

In an affidavit, Mr O'Sullivan said there was a unilateral decision to change the terms of an agreement with pharmacists in place since 1996 which breached his contract with the HSE and was therefore unlawful and void.

Although the scheme was already in place, its effects would not be felt until April when payments fell due, he said. He added that he had invested in his business on the basis of the old scheme.

In recent years, he said he had suffered accumulated losses of €1.6 million but, thanks to a financial review, he had managed to turn in a small profit last year.

If the cut in payments was allowed, it would have a "devastating" effect and leave his business facing "definite insolvency".

In an affidavit, Mr O'Sullivan's accountant said the business was likely to suffer an additional loss of €258,433 over a 12-month period under the new scheme.

Opposing the application, John Gordon SC, for the HSE, said Mr O'Sullivan's application appeared to be "somewhat contrived", particularly as Mr O'Sullivan knew the change was on the way in September last.

There was no documentation provided to the court to show Mr O'Sullivan would suffer the loss he was claiming, Mr Gordon said.

There are two pending actions in the Commercial Court by other pharmacists against the new payment scheme and Mr O'Sullivan's case will join them, the court heard yesterday.