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JOINT COMMITTEE ON ENTERPRISE, TRADE AND EMPLOYMENT debate -
Tuesday, 3 Feb 2009

Irish Pharmacy Union.

I welcome the representatives of the Irish Pharmacy Union, including Mr. Seamus Feely, secretary general, Ms Kate Healy, press and communications manager, Ms Liz Hoctor, president, Mr. Michael Kennelly and Mr. Darragh O'Loughlin, vice president. I know Ms Healy personally and feel I should declare that interest.

The witnesses are all very welcome and I thank them for taking the time to come here today. I am sorry for the hold up; we asked the witnesses to attend the committee earlier but the vagaries of parliamentary democracy interceded. We have had a busy schedule today and this is the final presentation. We ask the witnesses to be as brief as possible because we have a detailed submission and do not want it to be rehashed; we want it to be summarised in five minutes. We will stick to this time limit strictly so if I intervene the witnesses need not call me cantankerous.

The presentation will be followed by a discussion with members, which is probably of more importance. Before the witnesses begin, I draw attention to the fact that members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or an official, by name or in such a way as to make him or her identifiable. This probably will not arise but I must always give this warning. Ms Liz Hoctor will be leading the charge.

Ms Liz Hoctor

I thank the committee for giving the Irish Pharmacy Union, the representative body for over 1,800 community pharmacists, the opportunity to address them on the issue of building new retail outlets. I will not introduce the members of the delegation because the Chairman has done so.

Community pharmacists are health care professionals, with an expertise in medicine, who play a vital role in health care delivery. The community pharmacist is the most accessed part of the health service; in Ireland people visit the pharmacy twice a month, on average. People do not need an appointment for this and they get access to expert health care knowledge. The majority of pharmacies are small, family-run businesses that are located in villages and small to medium-sized towns. They employ over 16,000 people in this country. Pharmacy is one of the few parts of the health service that works well and it is, therefore, vital that we have a rational and planned distribution of pharmacies, which will meet the needs of our population.

The retail planning guidelines do not contain specific provisions relating to the planning and spatial considerations associated with pharmacies. They do not restrict competition in the pharmacy market. Evidence of this exists in the increase in the number of pharmacies in recent years. Indeed, Ireland is the most liberal pharmacy market in Europe.

The restrictions in the retail planning guidelines on the size of out-of-town retail developments have helped preserve town centres. Out-of-town hypermarkets would lead to the closure of local shops and job losses. They would force people to travel longer distances to access essential services. This would lead to greater car dependency and would create major problems for people who do not have access to a car. Therefore, we ask the committee to consider making a recommendation that current restrictions on the location and size of out-of-town retail developments be maintained.

In recent years there have been moves by private developers to build large out-of-town health centres with on-site pharmacies. Such developments involve the majority and sometimes all the general practitioners in an area relocating to a single out-of-town health centre with an on-site pharmacy. This type of development has a negative social, health, environmental and economic impact. As with large out-of-town retail developments, out-of-town health centres with on-site pharmacies will have a negative impact on town centres and reduce footfall, not just to pharmacies but to all local businesses. Ultimately, people's access to essential services, including GP and pharmacy services, will be greatly reduced. Those most affected will be the most vulnerable in society — the elderly, the chronically ill, parents with young children and those without access to a car.

The Government's primary health care strategy did not encourage the locating of pharmacies in health centres. Pharmacies were part of the primary care network and were located in the community with links to primary health care teams. The HSE's primary care guidance document states: "Where the HSE develops primary care facilities on its own property a retail pharmacy outlet will not be included in the schedule of accommodation." The Oireachtas endorsed this position by passing the Pharmacy Act 2007, which prohibits inappropriate business relationships between doctors and pharmacies.

Significant changes have occurred in the provision of pharmacy and medical services since the last comprehensive review of the retail planning guidelines in 2000. These changes have not been reflected in national planning policy and this has resulted in a vacuum in the policy. There is now an urgent need for a clear policy on the location of pharmacies in the retail planning guidelines at national level, in the interests of proper planning and sustainable development. This would permeate down through the planning hierarchy to local level and be reflected in decisions on individual planning applications. It needs to be made explicit that the overall policies, objectives and assessment criteria outlined in the retail planning guidelines apply to pharmacies. In particular, the sequential approach to the location of retail development should apply to pharmacies. This requires that the preferred location for new retail development, including pharmacies, be within the designated town, district, village or local centre. All these centres would then be identified in the relevant development plan for an area.

We ask the committee to consider recommending that policy objectives relating to pharmacies be included in the retail planning guidelines to recognise that pharmacies perform an essential social, health and economic function in catering for the needs of local communities. Pharmacies should, therefore, not be located in health centres and this is in accordance with Government policy. They should be located within designated local, district, town and city centres so that they are easily accessible to the most vulnerable in society. A provision to this effect should be included in the criteria governing the location of retail development in the retail planning guidelines.

I thank members for their attention and would be happy to answer any questions they may have.

There is a proliferation of pharmacies in Dublin city centre and its suburbs. When pharmacies make decisions as to where to locate, what are the main criteria they follow? Are they based on population, the site or access? I know of two pharmacies opening within 50 yards of each other in a Dublin suburb and I wonder how they can both be sustained. Both sell the same products and provide the same services and there is competition between them.

Mr. Seamus Feely

As with most European countries, a person can open a pharmacy anywhere. In most member states, including the United Kingdom, one has to apply for permission as pharmacy legislation ensures a rational distribution of pharmacies and the process is not part of the planning regime.

A key consideration in the question of where to open a pharmacy is the extent of services provided in a particular community. Access is a factor, as are footfall and the nature of the people who live in that community. The number of GP surgeries has also to be taken into account because pharmacies depend on prescriptions. The ultimate decision rests on whether one feels one can sustain a business in a particular community.

A significant number of new pharmacies have opened since the original regulations were removed in 2002 and we are concerned about the long-term viability of some of them. The biggest users of pharmacies tend to be people who are chronically ill and the elderly.

Has the IPU noticed an increase in the number of pharmacies closing since 2002?

Mr. Seamus Feely

There have been a number of closures in recent years and there were between ten and 12 in 2007, the last year for which we have figures. In the current climate we do not know what will happen because pharmacies are not immune to the effects of the downturn on its front-of-shop activities.

It seems the biggest threat to the IPU are health centres. Despite the policy of Government and the HSE they continue to be established. Is there bullying of GPs in this regard? Are they made offers they cannot refuse? It seems one cannot lose from a business perspective by setting up a pharmacy in a health centre. Under what pressures, commercial or otherwise, are people being put to set up a pharmacy in a health centre?

Mr. Michael Kennelly

That is exactly what is happening in Killarney at the moment where 18 GPs are moving into a site close to the bypass which is owned by the HSE. It is a commercial venture and the intention is to move one pharmacy onto the site to hoover up the vast majority of the prescriptions issued. It will lead to a number of closures in the town and the removal of pharmacies from neighbourhoods in which they are currently located.

I welcome competition and have no problem with someone wanting to open up a new pharmacy on a level playing pitch. I will compete on service and price but one cannot compete where GPs use their patients as captives and move to between 3 km and 4 km from the town centre where their own pharmacy is on site. Killarney does not have a developed public transport system so the only way patients will be able to get to the site in question is by taxi. I do not believe that patients who take a taxi will be able to afford to pay for another to go back to their pharmacy of choice afterwards. It is wrong.

The HSE owns the land but is it developing it?

Mr. Michael Kennelly

If it was a HSE-developed project no pharmacy would be allowed on the site so there have been manoeuvres to ensure it is categorised as a private development with the HSE's acquiescence. The HSE will be the anchor tenant and it will pay rent at preferential rates on its office space. The developers will own the property and will use the pharmacy as a retail outlet to enhance the profitability of the venture.

Will pharmacies have to pay key money, as is common where there is a large anchor tenant?

Mr. Michael Kennelly

They are not supposed to do so but I do not know. However, I know what happened in Mitchelstown because I saw an e-mail from the auctioneer who was involved in selling a pharmacy unit in one of these centres, where the figure was €4.5 million. That is an awful lot of money.

Mr. Michael Kennelly

No. To get round the Pharmacy Act they were going to sell the unit off the plans, knowing they were going to wipe out everybody else in the area. What happened at the end of the day, I do not know. Prior to the Pharmacy Act that is the kind of figure the developers were looking for.

Ms Kate Healy

Following on from what Mr. Kennelly had to say, our major concern about health centres with on-site pharmacies, particularly when located out-of-town, is that they undermine competition in the local pharmacy market leading to the closure of pharmacies. Ultimately, it will reduce the choice of services for patients and will create problems, particularly for those who are most vulnerable and have difficulty accessing essential health services in such centres as they do not own a car.

Mr. Darragh O’Loughlin

What we have learned from the UK, where these developments occurred years before they started in Ireland, is that where large medical centres are built on the outskirts of town bringing together all the general practices, the pharmacies tend to cluster around them. Half the pharmacies in the town will move out of the town centre to the ring-road to be near the medical centre and the other half close down.

What happened in the UK is that the local NHS trust then realised the communities in the town centres had lost this essential service and it had to pay to put back into the town centres satellite offices of the NHS. Effectively, the NHS had to pay for the provision of a service that the pharmacists had been providing free for years. We believe the location of pharmacies in medical centres is a bad idea. In addition, the Department of Health and Children in its primary care strategy states it is a bad idea. It is why Government policy is opposed to it. Steps are being taken by private developers around the country who wish to engage in a lucrative business, to try to circumvent the primary care strategy and the Pharmacy Act.

It is news to me that all GPs are moving into health centres. I am familiar with GPs moving to out-of-town centres due to property values and one or two GPs joining together with a pharmacy. As regards the larger health centre referred to, do quite a number of these exist or is this a trend taking place in a number of places and is it causing concern for the IPU?

I am interested to hear the IPU's view in regard to one GP, his or her staff and a pharmacy moving to a new neighbourhood centre where it makes sense to have a small health centre with a pharmacy and GP. I thought this was the type of health centre we were talking about earlier.

Mr. Darragh O’Loughlin

The Deputy has identified the primary difference between that scenario and what is happening in Killarney, Castlerea, Mitchelstown and Kinsale.

The Deputy's point makes sense where a new community is established, be it Adamstown in Dublin or in another suburb on the outskirts of our provincial towns, for a GP or pharmacist to establish a practice there. That maintains patient choice and accessibility. It is important services are accessible to patients. Locating all the GPs in an area that is not accessible does not make sense. Patients whose GP moves to another side of town can choose to visit another GP close to their home, thus the choice remains with them. Nobody has a choice if all the GPs and pharmacies are located in one location on the edge of town. This also undermines competition and makes it difficult for elderly people and young mothers with small children, who are the people we see most frequently, to access these services.

It is like car sales showrooms which are often all located together out of town.

Mr. Darragh O’Loughlin

Yes.

Obviously some of these pharmacies that are moving to health centres are members of the IPU. Do they tend to be well established pharmacies or are they new entrants?

Mr. Darragh O’Loughlin

One would have to be fairly well-established to have access to the level of capital required. There is no specific profile as this problem is only starting to develop around the country. By and large, it takes a great deal of capital to build one of these centres. In the current environment, one would not get that type of capital as a graduate fresh from college.

The IPU submission is that this practice should not be permitted in the future.

Ms Liz Hoctor

We are saying that pharmacies should not be located in health centres and that any development should be equitable, sustainable and, most important, accessible. If pharmacies opt to locate in health centres, access for patients will be reduced, competition will be undermined and patient choice will be removed.

Presumably the IPU would expel such pharmacies from the union.

The issue of health centres also needs to be addressed. I accept the IPU represents only one sector in this regard. The notion of every GP locating on one side of town is not good practice. It is an issue which we will have to address.

What is the annual average number of new entrants to the pharmacy profession?

Ms Liz Hoctor

Currently, it is approximately 170 into schools in Ireland. Members will be aware that two new schools have come on-stream.

Ms Liz Hoctor

A further 200 students train in the UK. The derogation which prevented Irish students who trained in the UK from working in a pharmacy less than three years old was removed before Christmas. This means Ireland is the most liberal pharmacy market in Europe.

I must attend another meeting in a few minutes. I listened carefully to what was said in regard to new health centres. The Minister for Health and Children opened a new health centre on the Vista Campus for which Ulick McEvaddy provided funding. This centre is being used not only by pharmacists but by other health professionals. It appears to me that the location of an on-site pharmacy is an inherent part of that centre. I do not see this as having an effect on other chemists in the town. People attend the doctor and pharmacy in the medical centre and I understand the HSE is taking rooms to provide professional services there. Are the representatives from the IPU stating that the union does not favour pharmacies setting up in that medical centre?

Ms Liz Hoctor

I am saying that I do not favour a pharmacy opening up in that centre.

The Minister for Health and Children opened it.

Ms Liz Hoctor

I am aware that the Minister for Health and Children opened the health centre in Naas yesterday. I am saying that I am not in favour of pharmacies being located in one big one stop health shop. On the face of it, a concept like that can seem like a very good idea but the reality is that the pharmacy in the HSE's own health promotion plan is the door they ask patients to use first. If one centralises all the GPs in one area and puts one pharmacy in there, that pharmacy will hoover up all those prescriptions. It will undermine the existing pharmacies that are dispersed through the community. Effectively what will happen is that the pharmacies that are located throughout the community will take a clear pragmatic business decision and will be drawn in like a magnet to locate around the health centre. They will not all survive but they will take that decision. That will take the services away from the high street.

In our experience a number of pharmacies that have currently opened in health centres do not open at lunchtime, on Saturdays and are certainly not available on Sundays. What do patients do on those days? Currently they can go down to the pharmacy downtown when they are stuck for medicine. If the pharmacy is in the health centre and has closed all the other pharmacies because it has undermined the competition, it will be closed and they have made their money from Monday to Friday. I do not think that is equitable. It does not improve access is not sustainable into the future. As a society we need to start planning how we will deliver services for our patients. I think they deserve that.

Has the IPU the facts and figures, the evidence to prove that to the committee?

Ms Liz Hoctor

The experience in the UK has already shown that, where all the GPs relocated in the big centres. A recent analysis by the King's Fund shows that people do not feel the care provided in these centres was as good as the care when the GPs were spread out throughout the community. As my colleague, Mr. Darragh O'Loughlin, stated, what has happened is that the pharmacies moved out to locate around the health centres. The NHS was forced to duplicate resources and open direct stores staffed by nurses. We have the resource by way of the distribution of pharmacies throughout the country.

I have a final question which Ms Hoctor may refuse to answer, if she so wishes. She mentioned the centre opened yesterday in Naas by the Minister for Health and Children. As far as I am aware, there were already four or five pharmacies in the town. As a representative, what has been the reaction of those pharmacists to the opening of the new centre?

Ms Liz Hoctor

It is too early to say what will be the impact of the new centre-campus opened in Naas yesterday. I understand the centralising of secondary care — hospital care — is under consideration. If policy is to be built upon, we must ensure primary care is not also centralised but dispersed throughout the community.

We are trying to protect or save town centres and ensure retail outlets are more conveniently located. Doctors and pharmacies are an essential part of the infrastructure of a town centre. Many grocery shops in some of the towns we visited last week were going out of business, leaving only doctors, architects and solicitors. We must try to strike the correct balance. This issue relates not only to pharmacies but to everybody shipping out of a area. The guidelines with which we are dealing were put in place to protect town centres. Ms Hoctor has made a valid case which we should consider. I accept there are pros and cons. However, we are dealing with the protection of town centres.

How many pharmacists are members of the Irish Pharmacy Union?

Mr. Seamus Feely

Currently, approximately 1,500 pharmacists are members.

On the point raised by Deputy Fitzpatrick, the average pharmacy obtains 65% of its revenue from prescription medicines. In some communities the figure is approximately 92%. Removal of GP services from the community will result in a loss of business.

On Deputy English's point, it is important to indicate that average footfall into pharmacies is approximately 200 people a day. Approximately 500,000 people a week visit pharmacies in Ireland. The removal of this service from town centres will impact significantly on other businesses. From the point of view of planning and development, it is important people continue to visit town centres. Footfall into pharmacies is high. As I stated, approximately 200 people a day or 500,000 a week visit pharmacies. These are significant figures. The average person visits a pharmacy about 23 times a year.

We discussed with another delegation the issue of town centre and out-of-town development. I am interested in hearing if the IPU is in favour or against town centre and out-of-centre development. From my understanding of what Mr. Feely said, the IPU is against the concept, as well as rotation.

Mr. Seamus Feely

While we are opposed to the concept, we have a particular concern about out-of-town centres. The impact of the out-of-town medical centre is the same as that of the hypermarket located on the outskirts of town. Let us take as an example Killarney town which has ten or 11 pharmacies. If the 2,200 people who normally visit the pharmacists in the town centre move their business, this will have an impact on other shops in the area.

If 13 doctors were located under one roof on Main Street, Killarney, would the IPU still have a problem with it?

Mr. Seamus Feely

Where a new practice is located in the centre of the community, it does not have as big an impact. As Deputy Brady pointed out, the pharmacy market is competitive. While I accept pharmacies must compete with new outlets, they have a better chance of surviving and maintaining their business when their competitors are located in the same community or locality.

Is Liam Sheehan still practising in Killarney?

Mr. Michael Kennelly

Under the national health care strategy, the intention is to have groups of three to five general practitioners working together. A town such as Killarney should have four primary care centres. It is the scale of what is being proposed there that is wrong. Up to 18 general practitioners are moving onto the one site, taking their medical card patients away from the town centre. That is what they are doing. The patients have no choice. Many of them have been asked to cease driving and there is no public transport available to bring them to the doctor's surgery. General practitioners often move up to 3 km away from the town centre and patients are forced to travel that distance to see them. It will be a stress test and patients may be required to use their pension to pay for taxis, which is not right. Leaving aside pharmacies, it is not right that GP services are being relocated outside existing neighbourhoods to remote locations.

I thank the Irish Pharmacy Union delegation for its assistance in our deliberations and its detailed written submission. We must deal shortly with another issue which arose from late night events. I thank the delegates for their patience and facilitating us by attending earlier than planned. The presentation provides us with useful information. We were delighted to facilitate the delegation by providing time to meet it. Mr. Feely may know the workings of this place better than most of us. We appreciate the delegation's efforts in putting together its presentation within a short timeframe. We will continue our deliberations tomorrow and will be preparing a report to be forwarded to the relevant Ministers. As a matter of courtesy, we will forward a copy of the report and its recommendations to all the delegations which have attended our deliberations.

The joint committee adjourned at 4 p.m. until 9.30 a.m. on Wednesday, 4 February 2009.
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