The establishment yesterday of an independent body to assess how much pharmacists should be paid for dispensing drugs to medical card holders seems unlikely to end a bitter dispute between the Health Service Executive (HSE) and pharmacists.
This is because the HSE still plans to reduce the amount it reimburses pharmacists for drugs dispensed to medical card holders from March 1st in a bid to cut costs by €100 million a year.
The independent body, announced by the Minster for Health Mary Harney, will be chaired by Sean Dorgan, former head of IDA Ireland, and has been requested to report back by the end of May.
Ms Harney said the body would recommend a new community pharmacy dispensing fee after taking submissions from all sides and after carrying out its own analysis.
She said its recommended fee level, subject to Government approval, will then be backdated to March 1st.
The Irish Pharmacy Union (IPU) said it was extremely concerned that Ms Harney was supporting the proposal by the HSE to reduce payments to pharmacists from March 1st.
"This is being done without any evaluation of their impact on community pharmacies or on patient care. It is particularly disappointing in light of the concerns expressed by public representatives of all parties last week about the need to avoid making unilateral changes to existing payment arrangements pending the outcome of an agreed independent review," it said in a statement.
However, it said the setting up of the independent body was "a step in the right direction" but it is concerned it was not consulted on its membership or terms of reference.
Ms Harney said the existing mark-up paid on the wholesale price of drugs at almost 18 per cent is "neither reasonable nor sustainable" and the HSE's plan to pay an 8 per cent mark-up from March 1st would go ahead. Around half of this margin goes in "kickbacks" to the pharmacists.
"Wholesalers have passed on part of their mark-up to retail pharmacies by way of discounts, with larger discounts given to larger pharmacies," said Ms Harney.
"Wholesaler discounting has been described by pharmacists as a method "to prop up" the fees paid on medical card prescriptions. I believe dispensing fees should stand in their own right, without external, artificial props," the Minister said.
The HSE said that while the independent body is reporting, a provisional flat fee of €5 per item dispensed will be offered to pharmacists, which is an increase on the existing dispensing fee of €3.27.
New contracts for pharmacists are also being developed and these too will be priced by the independent body.
Pharmacists have threatened not to dispense drugs to medical card holders if the new fee structures are implemented without agreement on March 1st. However, they have to give three months' notice to the HSE of any such action.