asked the Minister for Health the percentage increase in the cost of drugs to hospitals since the termination of local government contracts in July, 1971.
19.
Ceisteanna—Questions. Oral Answers - Cost of Drugs.
18.
asked the Minister for Health whether, since the termination of local government contracts, the pharmaceutical industry is operating an agreed price structure for the sale of drugs to hospitals; and if he will make a statement on the matter.
I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 18 and 19 together.
On 30th June, 1971, the system under which some of the medical supplies for use in the public service were purchased on a centralised contract basis was terminated except in the case of a very limited range of items. The central purchasing system was replaced by an arrangement under which manufacturers and their agents supply health boards and voluntary hospital authorities with medical supplies on the basis of special terms which my Department has negotiated with representatives of the pharmaceutical industry. The terms agreed on involve a scale under which the prices for goods supplied range from trade price to trade price less 15 per cent depending on the amount of the order. Overall, these arrangements are considered to provide terms which are not less favourable than those operating previously, but the extent to which individual health boards and hospital authorities can take full advantage of the terms varies depending on the amount of the medical requisites required by the body concerned. These arrangements are subject to review and a preliminary discussion on them has already taken place with representatives of the pharmaceutical industry.
As regards the increase in expenditure, it is not possible to express this in terms of the period beginning in July, 1971, as statistics are compiled by financial years. The percentage increase in 1971-72 over 1970-71 was 11 per cent. In assessing the significance of this, the Deputy should bear in mind the impact of increasing prices generally and the growing usage of drugs and medicines.
The total spending by health boards and formerly by health authorities showed greater percentage increases in the period prior to the change in the purchasing methods.
Would the Minister agree that in a situation in which you are getting special terms for special bulk buying, this may lead to an amount of wastage in the matter of perishability and may also lead to an amount of over-stocking?
I agree, but when the health boards are fully staffed and have examined all these questions, as in the case of any other institutions or even commercial companies, they must relate the keeping of stock and its possible perishability to the desirability of ordering stock in sufficiently large quantities to get the 15 per cent concession wherever possible. Quite obviously this would have to be very carefully studied by them.
Could the Minister say if a chemist who contracted with the Eastern Health Board under the new general medical services scheme would be in a position to purchase at the previous rate, that is, prior to 30th June, 1971?
The scheme has been completely changed. I do not think he would now purchase under the rate provided by the old combined purchasing scheme which operated when there were a large number of health authorities.