THE GOVERNMENT is to introduce cuts of up to €133 million in payments to pharmacists over the coming year.
The move was strongly criticised by the Irish Pharmacy Union (IPU), which represents about 1,900 community pharmacists. It said up to 5,000 pharmacy jobs could be lost as a result of the cuts and that frontline health services would be seriously damaged.
Minister for Health Mary Harney said that as a result of the new measures, pharmacists’ income under the various State schemes would fall back to the levels paid in 2006.
She said that the cost of the drugs and medicines under the Drug Payment Scheme (DPS), the Long-Term Illness Scheme (LTI) and other community drug schemes – including ingredient costs, payments for wholesale delivery and pharmacy dispensing fees and retail mark-ups – had doubled since 2002 and now totalled over €1.68 billion in 2008.
“Put simply, it should not cost €640 million to get €1.04 billion of drugs from the factory gate to the patient,” she said.
Pharmacists are currently paid by the State in a number of ways and the Government plans to introduce changes in many of these areas.
At present, pharmacists receive a dispensing fee of €3.60 per item under the medical card scheme while under the DPS and LTI schemes for private patients, they receive a dispensing fee of €3.16 plus a 50 per cent mark-up on the ingredient cost of the drugs.
Under the new reforms, these arrangements will be replaced by a new common dispensing fee structure based on a sliding scale. This will see pharmacists paid €5 for the first 20,000 items, €4.50 for the next 10,000 items and €3.50 for the remaining items.
The Government is also to reduce the 50 per cent mark-up under the DPS and LTI schemes to 20 per cent.
The Government is also to abolish a €33 million payment paid collectively to pharmacists for dispensing to patients over the age of 70, which was introduced following the deal to give everyone over that age a medical card.
It is also to reduce the “wholesale mark-up” reimbursement price paid for delivery of drugs to community pharmacies, from 17.66 per cent to 10 per cent.
In a briefing note to Oireachtas members yesterday, Ms Harney said that in theory, the wholesale margin was intended to cover the price paid by pharmacists to their wholesale suppliers for the delivery of pharmaceutical products. “However, on average half of the wholesale mark-up is retained by pharmacists by way of discounts from wholesalers,” she said.
Ms Harney said that she recognised that the payment cuts would pose a challenge.
“However, not making these savings will be even more challenging for health services and would mean significant, immediate cuts in hospital and home-based services for patients,” she said.
The Minister said that there were 1,600 pharmacies in the State and that they would still receive substantial fees and income from State schemes.
“In the absence of any action now, total income to community pharmacists from these sources in 2009 would amount to €550 million – about €343,000 per pharmacy on average. With these measures, this income in 2009 will amount to €495 million – €309,000 per pharmacy on average, a reduction of €34,000 per pharmacy this year.”
IPU president Liz Hoctor stated: “These cuts announced today amount to a 36 per cent reduction in the current level of payments to pharmacists. These massive cuts are utterly disproportionate and totally unsustainable.”
“Although pharmacists are not responsible for rising health costs and have always provided value for money, we had indicated to Government that we were willing to accept a cut equivalent to 8 per cent of our fees in the national interest.
“This was in line with cuts being proposed in other parts of the health service.”
