The Irish health sector - and patients in particular - deserve a mature analysis of how to develop world-class pharmacies here, writes Richard Collis in response to a draft consultants' report presented to the Pharmacy Review Group
One of the lowest points in the ongoing debate about how Irish pharmacies should develop came yesterday. A selective leak of a draft consultants' report presented to the Government's Pharmacy Review Group lead to headlines that distort the reality of drug dispensing in this country.
The leak and the report are obviously geared towards advancing a particular agenda.
But one must question the validity of a report that makes a series of flawed assumptions, misinterprets relevant statistics and shows no clear understanding of the pharmacy sector in this country.
The most glaring imbalance in the report is the selection of three products for price comparison when the average pharmacy has anything between 10,000 and 20,000 products in stock at any one time.
Are we seriously meant to conduct an analysis of one element of the health service chain on the basis of such a superficial study?
As mentioned already the draft report by Indecon Economic Consultants conducted a "price comparison" on just three different products: the antibiotic Augmentin 500, Band-Aids and cough mixture (unspecified).
Not only is this an astonishingly narrow basis for comparison, given the range of products sold in pharmacies, but the report ignores the fact that one of these products, Band Aid, is widely available in any corner shop in the country.
The antibiotic Augmentin 500 is available across the counter in many European countries but here Government regulations dictate that it is only available on prescription.
Much play is made of supposed price increases but the report ignores the fact that the prices of prescription medicines have been fixed by the Government since 1993 and therefore individual pharmacists have no control over what prices they charge for such goods.
Hardly the basis for wild profiteering by individual pharmacists!
When you scratch the surface of the pharmacy sector even a little bit, which the consultants obviously failed to do, you would develop a clearer picture of the situation regarding the gross profit margins for the sale of medicines.
It is not commonly known, but 72 per cent of prescription medicines dispensed in pharmacies in Ireland have no percentage mark-up applied. The pharmacists receive a fee per item - fixed by the Department of Health.
The consultants report does not make this distinction clear.
OF THE remaining 28 per cent of medicines dispensed, a margin of between 25-33 per cent applies, a figure comparable or lower than most other retail sectors.
The Indecon report also presents some figures on the growth in turnover amongst pharmacies over the last five years.
However no analysis is given of these figures and no breakdown between growth in spending on medicines and growth in general retail spending.
Another stick that the report tries to beat the sector with is the issue of the number of pharmacy outlets in the country.
The reality is that Ireland has the third-highest number of pharmacies per head of population in the EU.
In Ireland there is a pharmacy for every 3,100 people, while in the rest of the EU there is a pharmacy for every 4,500 people.
This clearly demonstrates that Ireland is well serviced in terms of access to outlets.
Indeed, given that the population of the country has increased from 3.6 million to 4 million in the last five years - while the ratio above stayed constant - the number of pharmacies increased directly in proportion to the population served.
All through the draft report there are flawed arguments. Headline numbers are thrown about without any understanding of their origin.
AN INCREASE in the spend on medicines over the last five years is presented as a simple cash windfall for pharmacists as a result of supposedly exorbitant prices being charged.
Given that we do have an increasing population base, we do have an ageing population, we are more affluent (expenditure of health products and medicines tend to increase with the wealth of a country) and we have had high levels of inflation for three or four years, one might expect some of these factors to have been cited as explanatory variables given an increased spend in this area.
When you then understand that prices have been fixed since 1993 by the Government and that there is no margin charged on 72 per cent of drugs dispensed, you get a slightly more rounded appreciation of what is happening in the pharmacy sector.
Unfortunately for all of those interested in the development of the pharmacy sector in such a way that service levels and professionalism are maintained, this report represents a very simplistic and superficial analysis.
The Irish health sector, and in particular patients, deserve a more mature analysis of how the market currently works and how best to design a world-class pharmacy model for the future.
Richard Collis is president of the Irish Pharmaceutical Union