The subject matter of motion No. 22 is at present under the jurisdiction of a Court. Motion No. 23 is adjourned by agreement. The next motion is No. 24 in the name of Deputy Dr. Browne.
Private Members' Business. - Pharmaceutical Products. Non-acceptance of Recommendations of Fair Trade Commission—Motion.
I move:
That Dáil Éireann is of opinion that the decision of the Minister for Industry and Commerce of the 4th July, 1957, not to accept the recommendations made by the Fair Trade Commission on 29th December, 1956 should be reconsidered so as to bring about price reductions by putting a stop to undesirable restrictive trading practices and price rigging devices whose purpose is to secure exorbitantly high prices for essential drugs, medicines, toilet preparations and baby foods in the pharmaceutical trade.
I do not think there is any doubt in the mind of anybody as to the grave concern, amongst many members of the medical profession as well as the ordinary public, because of the apparently high cost of medical drugs and preparations of one kind or another. In moving this motion, I hope to get from the Minister the answers to a number of puzzling questions in relation to the position here governing trading practices and prices in regard to drugs and medicines purchased from chemists and used in our health services generally. It is not clear as to who or what is, in fact, responsible for the high prices that obtain. It is not clear to me that, if we pinpoint the cause, it will be possible for the Minister to do anything or whether the Minister will be prepared to take the necessary steps to put the position right.
We must look for the cause of the high prices that obtain amongst the manufacturers abroad as well as at home, amongst the wholesalers and distributors, and amongst the retail chemists. It is obviously important to find out whether the cause is the retention of resale price maintenance schemes operated by the Irish Drug Association, the wholesalers, distributors, manufacturers, and retail chemists.
Price maintenance was condemned by the Fair Trade Commission in 1956. In spite of that condemnation it was not discontinued by order of the Minister for Industry and Commerce. To that extent the Minister is culpable and must bear some of the responsibility for the fact that the prices of essential drugs, medicines and proprietary preparations of one kind or another are frighteningly high.
In Great Britain at the moment the same interests are under fire in both the British House of Commons and the House of Lords. It is said that they are indulging in much the same practices there as obtain here. But the position here is much more serious because in Great Britain the sick person is at least protected against the high prices by the subsidy of which he is able to avail through the national health services. That protection is not available here. Our unfortunate sick are exposed to all the mercilessness of the restrictive practices carried on by wholesalers, by manufacturers, by retailers, or by a combination of all three.
It is important that we should understand the seriousness of the present development. It is possible that this aspect has not occurred to members of this House. A very significant change has taken place in the practice of medicine in the last 20 years. Not alone is it significant; it is also very important. Up to the early forties the practice was largely, though we in the medical profession would be the last to admit it, what one might describe as "rich doctor medicine". Certainly, on the medical side as opposed to the surgical side, one tended to hope the patient would get better. There was very little specific medical cure one could offer to a patient for diseases such as bronchial pneumonia, tuberculosis, fevers of one kind or another. There was no specific remedy for quite a variety of them. In the early forties there came on the market the sulphonamide drugs. They were followed by penicillin. Today we have the magnificent armamentarium of the average medical practitioner constituted of the unlimited and magnificent antibiotics now available.
Prior to 1940 I do not think it mattered very much really what the chemist, the manufacturer, or the wholesaler charged for medicines. With most of the medicines supplied up to that time the patient was just as well off if he poured them down the drain. Perhaps I exaggerate a tiny bit there. I do so merely to emphasise the fact that the antibiotics now available are of incomparable value in the treatment of disease. They can cure by virtue of the fact that they are specific remedies for erstwhile killer diseases. They can save life. They can limit the extent and duration of illness. They can restore a patient to fitness in a relatively short time. They can save a patient from disability and permanent incapacity. They can effect wonderful cures and there is now no question of "rich doctor medicine" at all. Present day medical practice is largely scientific and, because of the wonderful benefits that the medical profession can now make available to sick people, it seems to me wrong that any impediment should be placed between the sick person and these life-saving, painkilling drugs.
The British Medical Association cannot be accused of Leftism, Radicalism, Socialism, or anything else. Bar our own medical association, it is quite the most conservative medical association in the world. That very conservative organisation came out recently and said that the increased charges imposed in Britain constituted an impediment in the doctor-patient relationship. The increased charges to which the B.M.A. referred formed only a moiety of the total cost of the drugs. Here, the patient pays the full cost of the drug, with the exception of the patient in the lower income group. If the B.M.A. is right, then I maintain that most of our people here in the middle income group are faced with an almost insuperable impediment to efficient medical care, the efficient medical care we could make available to them if our hands were free and we had not to consider the financial aspect at all. They are faced with this insuperable impediment of getting ready access to these high quality drugs.
I shall give just one set of figures which I happen to have with me. There is a drug called Mystichin, a magnificent drug which could be used to treat very serious illness and since 1940, it is very often used in killing illnesses. It costs 55/8d. for 16 tablets. Six a day would be given for six days, that is, 60 tablets, and the total cost would be £11.12.8. If you want to treat a person properly, it costs £11.12.8, plus doctor's fees for a 10-day illness. Obviously, some people would not be bothered at that. It would be nothing to them, but to most of the people with whom we are concerned in the middle income group, who have no dispensary service—with all its failings —and no national health insurance— and there is a very high proportion of people in that position — it is quite clear that the cost of drugs is a very serious consideration, and one which I believe must result in a very high incidence of avoidable illnesses, belated recovery, and probably residual disability and incapacity of one kind or another.
That is merely one drug but most of the really good ones, Aureomycin, Acromycin, Terramycin, and all the others are all fairly costly. If one takes a long-term illness like T.B. in which Streptomycin and Dymicin are used, it is clear that you cannot possibly treat a patient with such drugs for a long period, unless there is a Government service like the T.B. service.
This whole question of the price of drugs is a particularly important one to the sick and, for that reason, it has always struck me that whatever right anyone has to make a profit out of illness the suggestion of excessive profit being made out of ill-health, sickness, pain, preventable illness of one kind or another, seems to me completely immoral, if it is true. There is no doubt that very considerable profits are being made out of the drug trade. The Minister recently told us that there is very little difference between the position here and in Great Britain. Possibly that is right, though I should like to question him about it at a later stage.
If we take the position in Great Britain, we find that there has been a remarkable increase in the profits of the drug trade. If that is so there, it is the same here presumably. In 1950, there were 217,000,000 prescriptions at a total cost of £34,000,000. In 1959, nine years later, there were 214,000,000 prescriptions at a total cost of £72.9 million—from £34,000,000 to £72.9 million for fewer prescriptions, 217,000,000 to 214,000,000. So costs have increased very considerably, even though there were fewer prescriptions and profits have gone up in a number of companies. In Glaxo, they went from £3.3 million in 1950 to £8.5 million in 1960; British Drughouse from £500,000 to £749,000; Boots' from £3.1 million to 10.9 million; Aspro-Nicholas from £600,000 to £1.3 million. Those are all British firms and their profits were something in the region of 70 per cent.
Great profits are clearly being made on the manufacturing side. Possibly that has not much application here in so far as most of our drugs are manufactured outside the country, but it is a factor in the end cost, the end price, and consequently one which must concern us in an effort to see if there is any way of getting around it and reducing the initial cost to the wholesaler or the retailer, if that is the cause of the drugs being so costly.
On the manufacturing side of the business there are extraordinary discrepancies. A drug called Hychothrazich costs £15 per thousand tablets in Britain and £5.10.0 per thousand in Italy. This drug is made by two subsidiaries of the one company, and one subsidiary make it for £5.10.0 per thousand tablets and the other for £15 per thousand tablets. It seems to me there is a variable factor—the price varies from one country to the other—and I want to know from the Minister if he has made any inquiries as to whether we are less well treated than other countries in this question of the pricing of drugs.
Again, there is the position of the drug called Tetrocycline, which is a most important and valuable drug. It is made in Britain by a United States subsidiary company and costs £64.10.0 per thousand tablets. Bought in Europe, the same drug costs £38.10.0 per thousand tablets, so there are those, to me, inexplicable or not readily explainable discrepancies. If it is possible for a firm to produce in one country at a lesser cost, I cannot for the life of me see why that cost cannot be applied uniformly.
It is also of interest in this regard that it is possible for the Minister to take some kind of action—which I shall discuss later—to try to see that our drug interests shop around the world and buy in the best market. They might possibly help in that way to reduce the cost of drugs.
I think everyone knows that the whole manufacturing pharmaceutical industry is, in certain ways, one of the most inefficient conceivable, taken over all. There is a most wasteful duplication and multiplication of effort. There is the absurdly costly advertising. Every doctor's wastepaper basket is filled to the brim every morning with unopened—I know mine are unopened—very costly-looking brochures of one kind or another, leaflets, enclosures in letters, advertisements of different medical preparations—one-sided advertisements, of course, with no real value from the medical point of view in so far as they contain no objective examination of the qualities of the drugs.
Unfortunate people have to go from one hospital to the next, trying to sell drugs. There is the multiplicity of these people and of the samples that are supplied. I suppose that worst of all is the dissipation of their energy and technicians and "know-how" in the multiplication of research projects of one kind or another being carried out at the same time with the diffusion of energy which could so much better be co-ordinated in a single organisation.
Then there are the overheads which we must pay for—the advertising, the canvassers, the motor car, the petrol and travelling expenses, the samples and the costly alvertisements in the journals. All these are paid for by the consumer. They do not come out of the profits. They are paid for by the cost of the end product to the consumer. Because of that, they are grossly wasteful. They are of little use to the doctor especially as the medical profession is in the process of providing a journal which will deal in an unbiassed and properly scientific way with the merits of different preparations.
This is a costly superstructure which is carried by the consumer and which is completely unnecessary. I do not see that it serves any useful purpose. In addition, we have a multiplicity of small chemist shops side by side in the average town and big city in Ireland all of which are selling the same products at exactly the same prices. There is no question of competition; that is very deliberately restricted by the rules of their association.
The consumer must pay for the multiplicity of tiny shops with their assistants and overheads of one kind or another. It is quite obvious that where there will be no competition—this alleged dynamic of private enterprise and free enterprise—there is no necessity for the multiplicity of small shops. It is as if there were six post offices side by side in Bray or in Wicklow Town all selling 3d. stamps and 5/- postal orders. It is completely absurd. It is one of the outrageous manifestations of the costly inefficiency of private enterprise in action. I should not mind if the cost came out of the profits of the shareholders but it does not. The cost is paid for by the consumer and it is to that aspect that I have the greatest objection.
A question I hope the Minister will take this opportunity of answering is that posed to him in August of last year in one of the Dublin papers. A Northern Ireland doctor gave a list of drugs. A remarkable discrepancy was shown to exist between the prices of the drugs here and in Northern Ireland. It is a very formidable and impressive list in his own handwriting which he alleged was supplied to him by pharmacists here. Let us consider the following discrepancies in prices:
|
Republic Prices |
Northern Ireland Prices. |
|
|
Sleeping Aid |
28/- |
12/- |
|
Vitamin Tablets |
8/6 |
1/7½ |
|
Vitamin Capsules |
10/- |
1/11 |
|
Arthritic Pain |
62/3 |
41/4¼ |
|
Pregnancy Sickness |
19/- |
12/- |
|
Worms in Children |
15/3 |
10/- |
|
Anxiety State |
5/9 |
3/1 |
|
Rheumatoid Arthritis |
185/- |
120/- |
|
Heart Failure |
60/9 |
11/10 |
|
Gynaecological and Pregnancy |
Test for30/3 |
20/- |
|
Thyroid Trouble |
16/6 |
10/6 |
|
Nervous Tension |
23/6 |
15/6 |
|
Anti-Allergy |
3/3 |
1/8 |
|
Blood Presure |
111/6 |
64/2 |
To these figures must be added purchase tax which I understand is a matter of pennies. That is a set of figures which deserves explanation. There may be an explanation. Is there that discrepancy? If so why does it exist?
Here is another set of figures related to specific objects giving the British price and our price as opposed to the Northern Ireland price and our price.
|
Republic Prices |
British Prices |
|
|
Agarol |
4/- |
1/10 |
|
Alophen |
2/9 |
1/11 |
|
Celevac |
19/6 |
14/2 |
|
Dulcolax |
3/2 |
5/5 |
|
Tonics |
10/- |
3/6 |
|
Metalone |
4/6 |
2/3 |
|
Neurophosphate |
6/9 |
3/4 |
|
Gelusil |
4/- |
3/- |
|
Roter Tablets |
21/9 |
12/- |
Those figures are taken from current lists, as far as I know, here and in Britain. Are they accurate ? If they are accurate, I should like an explanation of them.
It was rather interesting, in the controversy that sprang up in the Dublin paper in question, that one of the pharmacists from the Republic who replied gave a series of examples of costs here. In reply, the Northern Ireland doctor pointed out that the average cost of the examples given by the pharmacist in the Republic was 4/10d. while in Northern Ireland the average cost of the same examples was 2/- plus 3d. or 6d. If that is so, why should it be so? No ready explanation occurs to me.
It is bad enough to read of the fraudulent profits being made by American and British drug manufacturers which presumably imply exorbitant charges for drugs. Even if our charges were identical with the British charges, it seems to me they are exorbitant. If they are in excess of the British charges then the whole position here is outrageous. In the light of these facts—presuming them to be facts— if the Minister ignores the situation or washes his hands of the situation and refuses to take remedial action then his attitude is highly irresponsible.
The question of resale price maintenance was adverted to by the 1956 Commission and was discussed at considerable length. I do not think anybody questions the fact that there is this restricted practice in the sale of medical preparations of one kind or another. I do not know if the Minister has studied the report of the Commission and considered the case made by the manufacturers for the retention of the resale price mechanism. I have looked at it and it seems to me the most thorough-going hypocritical collection of evasions, misrepresentations and distortions that has ever been put forward by what should be a responsible and reputable body. It suggests that:
Where prices are fixed, the quality of the goods is relied on to sell them and there is an inducement for wholesalers and retailers to have good supplies for the customers.
It seems to me a complete non sequitur that if you have a fixed price, you can be sure of the quality. We have fixed prices for hundreds of things, for bus fares, for theatres, for cinemas for wireless and television sets, but we have no guarantee that because we have a fixed price, we can rely on the quality of the commodity. In fact, it was shown that it had no effect in making people buy the particular commodity.
If this is true, that people will not buy unless there is a fixed price because they infer that if there is not a fixed price the quality is doubtful, I do not know what all you people have been talking about—this wonderful private enterprise system in your lives, which, you tell us, is a marvellous thing, seeking the competitive incentive, that we have to fight for survival, that we do not like to be feather-bedded in the welfare system, that we love the struggle. Why not have the struggle in this industry ? Why not let this industry fight it out and have competitive prices ? Is it not a fact that if your private enterprise system did work, if what you say is true—that competitive pricing is the whole spice of life in a private enterprise economy—then the lowest-priced article would be the one most efficiently produced, giving the manufacturer a profit and giving the consumer a low-cost, high-quality article? But, instead of that, the pharmaceutical interests meet in some cabal, think of a number, double it, sometimes treble it and then say: "That is the price. Because we fixed that price, that is going to assure the consumer that the quality is high, that this is a good article and that they need not be afraid to consume it." The consumer has no say in the price; he has no choice.
The other point is that when trading by some of these cut-throat wholesalers and retailers was allowed, the public did not say "They have not got the price fixed; therefore we will not buy." They said "It is at a price we can afford and we will use it." Of course, there was no deterioration in the quality.
Another part of the humbug was that they were concerned about the consumer down the country, that insistence on high prices by every chemist would protect the consumer down the country, who was further from the centre of production. Another gem in their evidence was that the public interest should not be confused with the consumer's interest. Who is the consumer except the public? "The public interest should not be confused with the consumer's interest. Those in the trade are as worthy of consideration as the consumer." That is what we are suggesting, that the consumer is as worthy of consideration as the traders.
At present, it appears to me that the consumer is going to the wall and that his interest is being subordinated to the maintenance of a highly inefficient, wasteful organisation. A number of organisations and shops would go to the wall if they had to bear the brunt of really free price competition. Therefore, the sick people of the country have to continue to keep these people as expensive and costly pets because we will not take the decision needed to see that they face up to either their private enterprise undertakings of free competition and all the rest of that kind of rubbish, or that we take a decision to rationalise the whole of this industry in order to see that the consumer gets a fair deal. There are various other examples here; and if anybody wants to read a really good essay on hypocrisy, I would advise him to read it. It includes every possible gem that one could conceive.
I should like to have more time to deal with other points. I would point out to the Minister that the Irish Housewives' Association gave evidence to the Commission that:
.... stronger pressure has been put in recent months on wholesalers to make them refuse to sell pharmaceutical goods to shops retailing these below the maximum price.
There is no question of non-insistence on the fixed price. The Irish Drug Association will not let a chemist sell below the fixed price. He must have 33? per cent, even though I understand it is from 20 to 25 per cent in Northern Ireland.
In conclusion, I should like to suggest to the Minister that he may be in a position to answer the queries I have put to him. He may be able to tell us who is at fault. He may tell us, as the Taoiseach once told us in relation to the price of petrol: "I have no power. These products are manufactured outside the country and we are powerless." This myth of our independence is once again exploded. That may be so, in which case all the unkind things we have said about the wholesalers and retailers must fall to the ground.
On the other hand, the Minister could tell us: does he think he should abolish the retail price fixing arrangements and allow free competition to find its own level? Would he consider establishing some kind of State board, on the lines of Tea Importers, Grain Importers, or Timber Importers, at the time of the war, for the pharmaceutical industry, with the chemists, the Department of Health, the Department of Industry and Commerce and the consumers represented on it, so that some sort of body could try to make drugs available in the country at the cheapest rate?
The only other suggestion I have for the Minister to reduce the price of drugs would be this. If our people are not to be by-passed by this wonderful antibiotic era in medicine, which is completely revolutionary, some kind of Government subsidy, some sort of medical scheme, even for the pharmaceutical side, should be made available in order to help the very heavily pressed middle-income group who are the victims at the moment. The people in the middle income group are really the people who are being oppressed and victimised by what I believe to be a most inequitable system.
I formally second the motion and reserve my right to speak later.
The champion of the downtrodden has just spoken. The pharamacists of Ireland would seem to be on the spot, so far as he is concerned. The relations between the medical profession and the pharmacists of Ireland in the past have been very happy. They worked together over the years. I have been in this business for over 50 years and we have worked in the interests of the people and the sick people of Ireland, in spite of what Deputy Dr. Browne said. It is indecent that, of all people, a member of the medical profession, a profession kindred to the pharmaceutical profession, should come in here and make an atrocious and scandalous attack tonight on a very honourable trading profession in this country.
My loyalties are to the people.
I never interrupted the Deputy and I could have interrupted him many times. The Deputy spoke a lot about the Fair Trade Commission and its examination. Towards the end of his speech, he mentioned a person who represented the Housewives' Association and the fact that she was able to talk about cut-prices. I happened to be at the Fair Trade Commission on a day when one of these ladies came along in a great fur coat. The only thing missing was the poodle. She said she would not herself purchase in a cut-price shop for her own use but that she purchased in the interests of the poor people. I wonder if Deputy Dr. Browne is championing the cut-price institution in this country. I should like him to answer that question. I have my own opinions about the matter and I am certainly not championing them.
He spoke a lot about an alleged doctor who sent a letter to one of our national Sunday newspapers. The strange thing about that particular doctor is that his name was never published. It is a very easy thing to make an attack behind closed doors or in such a manner that nobody knows who is making the attack. I do not know today whether that person was actually a doctor or whether it was Deputy Dr. Browne himself wrote that letter pretending he came from Northern Ireland. Perhaps, it was, but I know this about it——
It certainly was not Deputy Loughman.
I am not suggesting that Deputy Dr. Browne did it. I could easily argue that it might have been he himself who wrote it but I do not know and I doubt if any other person in the House knows who wrote the letter.
Deputy Dr. Browne read out a list of items. He mentioned no specific item that I, as a pharmacist, could deal with. He mentioned various sedatives and all kinds of things like that, but he mentioned no specific medicine so that I could say that the price was so and so. In any case, I do not believe the story. He mentions this question of price lists and fixed prices. There are no fixed prices. I can assure Deputy Dr. Browne that I am at liberty to sell anything I purchase at any price I choose, whether above or below the cost. There is an indication given as to the proper cost to charge for an item.
Before I went to the Fair Trade Commission, I examined the list which we have and must have, if we are to carry on the business of pharmacist. There are no fewer than 17,000 proprietary items in that book. Does Deputy Dr. Browne or any sensible person imagine that I could keep in my mind the names of these 17,000 items, not to speak of their prices? Is it not reasonable to think that the suggested price should be there for me as an indication to me what to charge? Suppose I were to get a prescription from a doctor and one of these 17,000 items is mentioned on that prescription, of which I never heard before, I go along to this list and I find it there. Then, I have an indication of the actual selling price recommended by the manufacturers. I can make up my own mind on what I am going to charge the patient but I think it is absolutely ridiculous to condemn the pharmaceutical people for having a price list and a list containing items.
Was the minimum price laid down at any time?
There was never a minimum price laid down.
Was there one laid down on the last list?
I do not know.
The Commission says there was.
I am not disputing——
The minimum price was laid down but the maximum price was not.
I am talking about the list.
I am talking about the list, too.
In actual fact, in Ireland, there is sufficient competition in the sale of medical articles to see to it that the people will get a reasonably priced article. That is my solid belief on this question. Deputy Dr. Browne, having given us a talk on the wonders of modern medicine, told us that before this era most of the medicine might as well have gone down the drain. He qualified that by telling us that he had slightly exaggerated. What a condemnation of his own profession ! What a shocking condemnation of his own profession to say that these men were simply fooling their patients by giving them stuff which it was just as well to pour down the drain as to give to them !
There was always the element of faith.
He told us about the 60 capsules which a patient would take at the rate of six per day for ten days. That happens once in a while. He mentioned the cost of particular drugs for T.B. patients. I think he actually mentioned that the T.B. patients get the drugs free. They do not really enter into this discussion at all.
Private enterprise came in for abuse. Apart from the Deputy's desire to attack the pharmacists of this country, his main desire was to attack the system of private enterprise which we adopt here. He wants us to adopt his socialised idea—that the State should do everything for everybody, that the people should be made wards of State. I hope we will never see that day and I do not think we will, despite the efforts of Deputy Dr. Browne.
I had intended to have some notes on this matter but I did not expect this discussion to come up tonight. It was third on the list of motions and in fact it is one of the items about which the people concerned should be consulted by the Ceann Comhairle before the motion is taken. It is rather odd, to put it one way, and I am not criticising the Ceann Comhairle——
It is not a matter for the Ceann Comhairle to decide.
I know, but I suppose the Committee on Procedure and Privileges——
The Minister knew.
I know that, but at least an organisation directly concerned should have some notification when a motion such as this is to be discussed. I had some documents which perhaps would have been useful in contributing to this debate and which I could have used, had I known the motion was to be taken, but I came into the House only about half an hour ago. At any rate, I simply want to say that I think Deputy Dr. Browne is the wrong person to raise this question. Every statement he made was foolish. Competition in this country, so far as medicines are concerned, is as keen as in any other business. We have over 1,000 pharmacists who are in every village and town. He thinks the great majority of them are small business people trying to make their livelihood and thereby putting up the cost of medicines to the ordinary people.
Like the doctors, every person who gets his certificate, under the present law, is entitled, if he chooses, to take the risk of opening a medical hall and trying to make a living from it. Despite what Deputy Dr. Browne says, they are doing a good service and it is a terrible thing that such a shocking attack should be made on them by a person belonging to the medical profession. He may laugh and smile, but, as I said, I have been 50 years in the business and I have always seen most happy relations existing between doctor and chemist and I am pretty certain that those happy relations would not exist if the doctor, who has a great interest in his patients, thought that the pharmacists were the type of people Deputy Dr. Browne wishes the House and the country to believe they are.
If Deputy Dr. Browne is the wrong person to raise this matter, certainly in the light of the speech we have just heard from Deputy Loughman, he was the wrong person to reply from the Government benches. Our position here is very simple. Having due regard to the incidence of illness over the past couple of months, and the accompanying necessity for a greater amount of drugs, we feel that there should be an inquiry into the alleged, at any rate, increase in the price of drugs consequential on the Minister's recent Order.
There is a wide volume of opinion which believes there has been a substantial price increase resulting from the Order and a consequential disability imposed on these people for whom Deputy Dr. Browne speaks. We think that drugs such as are necessary for the various diseases— and I agree with Deputy Dr. Browne that this era of antibiotics surpasses anything else that has come our way— should be within easy reach of the people who require them. The Minister would not be overdoing it or would not be injuring his own position by answering the widespread public opinion which demands such an inquiry because it feels there has been a drastic increase as a result of the Minister's Order. I do not agree that this matter as Deputy Loughman suggests should not be raised by a doctor, or that a doctor should not criticise the pharmacists. I do not think people are in this House by virtue of the particular calling which they follow outside——
"You scratch my back and I will scratch yours"—that seems to be his idea.
——or that they cannot express views here representing the general public demand, though in conflict possibly with the views of their own profession. That being so, very little need be said on this matter except to urge on the Minister the necessity for an inquiry into the alleged price increase, consequent upon the recent tariff Order.
Mr. Ryan
I rise to support what Deputy Lindsay has said on behalf of our Party and to reiterate what I have said on another occasion in this House. Human illness is far too serious a matter to allow political considerations or any considerations other than human welfare to enter into the question of the cost of curing illness. The fact is many life-saving drugs and medicines are dearer here than elsewhere. I do not know whether it is because of private enterprise as practised in the pharmaceutical profession. I doubt it, because private enterprise operates in the neighbouring country where drugs are very much cheaper than here. Private enterprise operates in the pharmaceutical profession in Northern Ireland where drugs are very much cheaper than here. It operates a short distance from this House, but as soon as these drugs cross a political Border, which we all hope is there only for the time being, they suddenly become dearer. That seems to pinpoint a substantial portion of the increase at the customs level. If it be at any other level—and it appeared to the Fair Trade Commission it might be at some other level—then action should be taken to prevent any unnecessary increases in the price of drugs.
It is common knowledge that the main cost of curing illness at the present time is not the cost of doctors but the cost of drugs and medicines and as in some areas there has been a tightening up on the issue of blue cards entitling people to free medical treatment, many people are unable to provide for their wives and children the necessary drugs prescribed by doctors for them. Certainly it was my experience over the past three months when there was so much illness, bronchial trouble and all kinds of winter diseases, to be approached by literally hundreds of people who were unable to provide the drugs which doctors had prescribed for their children and themselves. That is a shocking state of affairs.
Deputy Loughman tried to discount some of Deputy Dr. Browne's remarks by saying that it was no concern what drugs for the cure of tuberculosis cost because they were not paid for by the individual. They were paid for out of the same miraculous fund. That fund is, of course, provided by the taxpayer and if the cost of administering the fund is higher than it need be, it should be reduced.
I appreciate the object which the Minister had in mind when last year he imposed tariffs on some very necessary medicines and drugs. It was to provide employment here. I do not know, and I do not suppose anybody can know, how many people suffered as a consequence of that. It is all very well to say that the best available advice is that there are substitutes obtainable in this country for many of the items on which tariffs or duties were imposed but that is not a matter which can be clinically ascertained in the Department of Industry and Commerce or, indeed, in the Department of Health. It is a matter that has to be clinically examined in relation to each patient.
This whole matter is far too serious to be allowed to drift in the way it is drifting. In this modern age, when drugs are so costly and people's means are so limited, every effort should be made to provide necessary drugs at a reasonable cost. I cannot see why drugs should be any dearer here than they are in neighbouring islands. Putting it as simply as that, why must we pay even 10 per cent. more for drugs which are freely available in adjacent islands? It is not fair because the level of income in this country is much lower than it is, for instance, in Britain. The average wage here is only half the average wage across the water. Yet, many average wage earners have to provide drugs and medicines out of their own pocket. They simply cannot afford it. We cannot allow this situation to drift merely because we are shy about interfering with the system which is supplying these drugs at the present time.
I do not want to enter into any discussion on the merits or demerits of the decision of the Fair Trade Commission except to say that this House by legislation created the Fair Trade Commission for the purpose of inquiring into trade practices so as to ensure that they would operate fairly in regard to the consumer and without doing unfair damage to the interests of legitimate traders. If that Commission has any purpose it is to make impartial findings. When they make their findings they ought to be respected and the Minister for Industry and Commerce ought to take the necessary steps to implement their decision.
I appreciate that the Minister can reply that this House reserved to the Minister the right to implement a decision of the Commission or not. That was a wise reservation but in broad principle it seems to me a ridiculous waste of time to have a Commission to sift evidence and make a decision and then to ignore the decision. The Minister will probably quote statistics to suggest to the contrary; statistics can probably be quoted on one side or another to show that drugs are dearer or cheaper according to the argument you want to advance— but it is common knowledge that many drugs are not made available in this country as cheaply as they are elsewhere. That is undesirable. It may very well be that they are not made available to pharmacists here at the low wholesale prices at which they are available elsewhere.
I do not think that Deputy Dr. Browne was attaching any particular blame to the chemists as such. If it be that the British suppliers or any other suppliers are not making drugs available in this country at the same price as they are making them available elsewhere then, as Deputy Dr. Browne said, we should look elsewhere for these drugs. If there are rings, they must be burst open. These are matters which we must tackle no matter whom we may hurt.
We in this Party are particularly anxious that the Minister would take steps to review once again what we regard as the very bad decision he made to impose tariffs and quotas on some very necessary drugs. He suggested at the time that there were adequate safeguards; that there were alternatives available; that people who needed a particular drug could get it in free of duty. We do not believe that the system is operating satisfactorily.
Finally, might I make a remark in relation to public health services? We are all aware that quite frequently when a dispensary doctor prescribes a drug for a patient—we will call it drug X—the particular drug might not be available in the local dispensary and steps are taken to have it procured. As often as not somebody along the line, who is not the doctor, suggests drug Y as a substitute because drug Y is cheaper than drug X. That is shocking medical ethics and I believe it is potentially dangerous to the people who have to accept the public health service because of their inability to provide their own medicines.
I do not think that point would arise on this motion. The motion deals with the reduction of prices.
Mr. Ryan
I was just going to point out that it is relevant in this way— public health servants would not be suggesting the substitutes if the real thing were available at a reasonable price. I believe we are being asked to take second best because of the action of the Minister in imposing the quotas and the customs duties which he imposed on necessary lifesaving drugs.
This debate has got rather off the rails. Certainly, it has got outside the terms of the motion that was put down by Deputy Dr. Browne and Deputy McQuillan: Deputy Dr. Browne was responsible to an extent because he dealt with wider issues, no doubt with the intention of coming back to the specific matter mentioned in the motion but the strictures on time imposed by the rules of the House did not permit him to do so.
The motion refers to a decision made by the Taoiseach when he was Minister for Industry and Commerce not to accept the recommendations of the Fair Trade Commission which investigated the sale and distribution of drugs in this country. So far, from the Fine Gael side of the House, the observations referred in the main to an Order that I made last year imposing a certain duty on imported tablets the equivalent of which were being made in this country. That was debated fully on a number of occasions in the House but, notwithstanding that, there is an investigation going on in relation to prices of drugs that came before the public eye as a result of that Order. Therefore, I will have to refer to it in the course of my reply.
In his opening statement Deputy Dr. Browne referred to possible remedies in connection with the entire question of drug manufacture and distribution which, as he himself admitted, are clearly beyond my power to effect. He mentioned that most of the basic drugs that are used in this country and are compounded are in fact imported from abroad. In making that point he justified, to an extent at any rate, the Order I made in respect of drugs last year which was designed primarily, of course, to create employment in this country and ultimately so that we might produce a basic drug industry within the country. If we can do that it will be naturally to the benefit of our economy and I hope to the benefit of those who will be unfortunately obliged to use drugs in the future.
Deputy Dr. Browne mentioned the disparity in prices between drugs sold by a company operating both in Britain and in Italy. It is possible that the costs of research and clinical tests were applied to the costings of the company in Britain and that the drugs were priced accordingly, and these costs were not, and did not have to be, taken into account in relation to the Italian industry. However, that is only a point of view but I am sure if it were examined it would be found that there was some basis for the suggestion.
The Deputy also referred to the profits that were made by some of these great drug manufacturing firms. He referred to the profits in terms of millions, but again he did not refer to the capital employed that produced these profits. I do not know what relation these profits had percentagewise to the capital employed——
One hundred per cent, profit on the capital in some of the companies.
Deputy Browne did not mention that.
He had not time to mention everything.
I will deal—since the course of the debate brings me to it— with the alleged price differential between the cost of essential drugs in this country and in Britain and the Six Counties. Following the complaints that were made in the House and outside it about the effect of the duty that was imposed on certain drugs, I made enquiries the result of which established in the main that 90 per cent. of the range of drugs, proprietary preparations and toilet preparations on sale in this country, equated more or less to the price of similar commodities in Britain and the Six Counties, but that there was a range of ten per cent. in which there was a differential which is still being investigated.
If I may be more specific, in regard to basic drugs and chemicals in the British Pharmacopoeia, the Irish Drug Association list of suggested prices is the same as the British list. The prices in the Six Counties are substantially the same as here but show in some cases minor divergencies upwards or downwards; in other words, these minimal differences—and minimal they were—are in some cases in favour of the buying public here and sometimes in favour of the buying public in the Six Counties and in Britain. In the case of proprietary preparations, and these include all that has been set out here in the motion, toilet preparations, baby foods and other commodities——
The Minister is forgetting the fact that the patient in Britain pays quite a different price from the price paid here no matter what the differential is.
That is a different matter. I am talking about the actual price at which drugs are available here and in the Six Counties. In the case of these proprietary preparations, the prices of 90 per cent. of the listed items are substantially the same here as in Britain. There are minor variations, but these had proved to be due to such things as package tax, sugar tax and the duty on ampoules. These taxes incidentally were infinitesimal in relation to the cost of the commodity concerned. In the case of some of these proprietary preparations, the British prices are sometimes higher than the prices here. That may have been due, as Deputy Dr. Browne suggested, to purchase tax. It probably was, but in regard to the remaining 10 per cent. of proprietary preparations Irish prices are higher and, I do not mind admitting, in some cases much higher than the Six Counties or British prices.
I give the other side of the House a present of the fact that in some instances these prices are higher because of the duty that was imposed. The duty was imposed on imported tablets the equivalent of which it is claimed—and the claim can be substantiated—are being made here. Nevertheless, either the medical profession or the patients of the medical profession prefer to continue to use certain imported tablets even though they carry a duty. Notwithstanding the fact that it may be proved that the Irish-made product is as good as the imported one, I do not blame the medical profession nor do I blame any of their patients for wanting to adhere to the tablets they have been in the habit of using. However, I want to point out that it is open to any doctor or any person who is obliged to use these tablets which are, on importation, liable to duty, to import them in lots of up to 100 free of any duty whatsoever. To that extent, there is no hardship in the matter of price on the Irish public or on the medical profession who prefer these tablets. I think it was a fair and wise provision and one of which advantage has been taken in a number of cases. Therefore it is untrue for any Deputy to say, certainly for Deputy Ryan to allege, that lives may have been lost as a result of the duty imposed. Nothing could be further from the truth not only because these tablets may be imported free of duty in certain quantities but also because the Irish commodity is available for sick people.
Within that limited range of ten per cent. in which Irish drug prices are higher than in Britain—and this is the important factor—many of these drugs are the product of the United States of America and the United States price levels are much higher than British and European prices. These drugs include such things as were mentioned here this evening acromycin and aureomycin. They are very high quality drugs, no doubt, as indicated by Deputy Dr. Browne. As I told the House on a number of occasions and no later than two weeks ago in reply to a question by Deputy Norton, I instituted an inquiry as to why there should be such a difference between American-produced goods on sale in the Irish market and drugs available from other sources. As a result of these inquiries, and as a result of the co-operation received from the persons from whom inquiries were made, it has been possible to effect a reduction ranging from 10 to 15 per cent. in the cost of these drugs.
Here, it is only fair for me to say that I have noted that there will be a corresponding reduction in the cost of these United States products on the British market, so that the differential in cost on the Irish market and on the British market will still substantially remain. I am continuing to pursue actively the question whether this differential can be effectively reduced and, if possible, eliminated. No matter what is said either in doctors' letters or anonymous letters in the papers or in the House, the range of commodities on which there is a differential in price, is limited to ten per cent. of the entire range and, within that ten per cent., it is possible for people to get their drugs at British prices, if they find a duty is imposed by reason of the fact that similar tablets are produced in this country.
Therefore, having established that— and it is established as a result of the inquiries I have referred to—the motion must refer only to ten per cent. of the entire market, the entire market being something in the region of £3,000,000, of which nearly half is manufactured and supplied from home sources. There is a limit—and I admit it candidly—to the extent to which I can effectively control prices, since the drugs in question are manufactured by companies outside the jurisdiction. No matter what inquiry—public inquiries, in particular—I establish, it will not tend to reduce these prices. On the other hand, by the manner in which I am pursuing the matter and by reason of the co-operation I hope to get from these companies and their importing agents, I hope the differential will be effectively eliminated.
To come back to the terms of the motion, I have just suggested that the motion itself must refer only to the ten per cent. of the total amount of drugs and proprietary preparations used in this country. In relation to the Fair Trade Commission's inquiry, it must be pointed out—and I am not defending chemists, doctors or anybody else; I am simply referring to the findings in regard to these alleged restrictive practices and their alleged effect on prices in this country— in general, the Commissions's report did not disclose any undesirable restrictive trade practices or price rigging devices whose purpose or effect was to secure exorbitantly high prices for drugs, etc. That is a positive finding of the Commission. Secondly, the view of the Commission was that net profits earned by a retail chemist were, on average, moderate, having regard to his professional training.
In the course of the report, some of these profits are mentioned and on page 11 there is a Table which gives the average profits earned by the chemists, taking their accounts for the period 1951-55. It will be seen that the average gross profit per shop was £2,062 per year, or 32.4 per cent. of sales and net profit before the proprietor's remuneration £851 or 13.4 per cent. of sales. That is before the proprietor's remuneration; in other words, if the proprietor were working in the shop himself, he would be entitled, of course, to charge his remuneration against profit.
To quote specifically on that point from the report, it says in chapter 6, paragraph 83 (e):
Notwithstanding the high gross profit margins normally obtained by retail chemists in comparison with those of traders who in respect of certain goods are, or might be, in competition with them, the net profits earned on the average are moderate having regard to the chemist's professional training.
Therefore, the Commission in their two main findings say that their investigation did not disclose any undesirable restrictive trade practices or price rigging whose purpose or effect was to ensure exorbitantly high prices for drugs, etc. Secondly, they say that profits earned by chemists are moderate. Investigations did not go so far as to assess profits of manufacturers. Naturally, they could not very well do so, having regard to the fact that many of the manufacturers are outside the country and, in any event, they would have to take into account the costs of research and clinical tests and relate these costs to profits.
If I take the motion at its face value, then I would have to point out that the Commission, in the case of medical preparations, recommended that an individual manufacturer should be free to enforce retail prices for his own products but that collective enforcement of prices—that is, by a group of manufacturers or importers or by a retail association—should be prohibited. They recommended that the individual manufacturer should be free to enforce retail prices. This is what the Deputies want done in the terms of their own motion.
Secondly, the commission recommended that a retail association should be allowed to circulate price lists to its members embodying prices fixed for medical preparations by individual manufacturers and, in the case of other products, prices suggested by the manufacturer or, where the manufacturer does not do so, by the Association, on the understanding, however, that no efforts would be made to enforce the suggested prices as minimum prices. Incidentally, the Irish Drug Association said that their list was a list of suggested prices and that there was no question of their being—certainly since 1952—enforceable minimum prices.
But their membership of the Drug Association forces them to accept those prices.
That was not charged.
I admit what the Minister says is correct but they were expected to accept those prices.
To the extent that the Deputies' motion can be taken at its face value, I take it that the suggestion is that these two recommendations of the Commission should be applied in respect of 10 per cent. of the commodities which are now listed and with which I think we can deal effectively. Nothing that I have said in this regard is intended, or could be construed in any way, as a reflection on the report of the Commission. I am using these two findings purely in the context of the Deputy's motion and in the light of the results brought to light by my investigation into the price differential which was alleged to range over the entire body of drugs and tablets in this country but which, in effect, proved to be reduced to 10 per cent.
Debate adjourned.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Thursday, 2nd March, 1961.