THE HIGH Court has ordered that the HSE must pay for the losses a chain of pharmacies suffered following the decision to reduce payments to pharmacies under General Medical Services (GMS) drugs and services scheme.
The HSE must also pay interest on the money involved. The exact amount of monies due to the pharmacies in the Hickey group will be decided later.
In the case the Hickey group of pharmacies claimed the “unilateral decision” of the HSE to reduce payments breached the Community Pharmacy Contract (CPC) of 1996 and would lead to losses of more than €2 million annually. The case was a test action for similar proceedings by hundreds of pharmacies around the country.
Last September, Ms Justice Mary Finlay Geoghegan ruled that the HSE had acted in breach of its contract with pharmacists, who were entitled to be paid the amounts due to them under their agreement with the HSE.
The HSE could not unilaterally alter the reimbursement price of medicines and should have consulted the Irish Pharmacy Union (IPU), she ruled.
Earlier this month, the judge heard arguments from both sides relating to the extent of the claim for damages.
Both sides agreed the issue was covered by a rule of common law which says where a loss is sustained by breach of contract, any damages must place a person or body in the same situation as if the contract had been properly performed.
The HSE argued the breach of contract was a procedural flaw in that a consultation process involving the Pharmaceutical Contractors Committee and the Minister for Health and Children had not taken place before the new rates of payment were implemented. Any damages should be nominal and only for such a period as the judge decided may have been necessary for such consultation to take place, the HSE said.
The pharmacies sought damages for the entire period in which the court had found the HSE had failed to perform the contract. They said they were entitled to damages from September 2006, when their mark-up was first cut, and from March 2008 when the mark-up was cut further.
In her ruling yesterday, Ms Justice Finlay Geoghegan said the pharmacies were entitled to damages on the bases claimed by them.
The judge said there had been no evidence before her that the Minister has yet conducted the consultation process and approved a new rate of payment.
It did not appear to her there was any evidential basis upon which she could conclude that the Minister, as a matter of probability and following consultation yet to take place, will approve the reduced rate of payment proposed by the HSE.
While the Minister had recently announced the consultation process will commence shortly, the court could only limit the period within which damages are sought if it had evidence of a decision arising out of that process, the judge said.
The judge also said the pharmacies are entitled to interest on the amount they would have received if the contract had been performed.