Dáil Éireann Debate, Tuesday - 27 February 2007
301 Ms Harkin asked the Minister for Health and Children her plans to restore the right of pharmacists to be able to engage in collective bargaining on fees for the delivery of the community drugs schemes on behalf of the State; if the same legal advice will apply to the negotiation of fees with other contractors, such as general practitioners, dentists and optometrists; and if she will make a statement on the matter. [7806/07]
Amharc ar fhreagra357 Mr. McCormack asked the Minister for Health and Children the position regarding negotiations between the Health Service Executive and the Irish Pharmaceutical Union in relation to fees for the delivery of the community drugs schemes; and if she will make a statement on the matter. [7792/07]
Amharc ar fhreagraI propose to take Questions Nos. 301 and 357 together.
In 2005, a process was begun to examine all aspects of the drugs supply chain with a view to achieving greater value for money in the pricing and supply of drugs and medicines to the health services and the GMS and community drugs schemes, consistent with patient safety and continuity of supply. This process was agreed by the Cabinet Committee on Health. A joint HSE/Department of Health and Children negotiating team was put in place to advance this process.
In mid-2006, the negotiating team reached agreement with the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers in Ireland (APMI). Discussions then began with the wholesaler representative body, the Pharmaceutical Distributors' Federation (PDF), as part of the agreed process on supply to community pharmacies and the health services. However, PDF advised the State that a legal issue precluded it from negotiating a new margin for distribution to community pharmacies. The negotiating team then obtained legal advice, which subsequent legal advice to the Department confirmed, that this issue also had implications for negotiations with community pharmacists.
The legal advice to the Minister and the HSE indicates that:
Section 4(1) of the Competition Act, 2002 prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the restriction or distortion of competition, including agreements to fix prices, unless the agreement, decision or concerted practice meets certain conditions. Those conditions are not met in this case.
Wholesalers and pharmacy contractors are undertakings. PDF and the IPU are associations of undertakings under Section 4(1) of the Act.
The coming together of wholesalers under PDF or pharmacy contractors under the IPU to negotiate prices would be a breach of Section 4(1).
Entering into an agreement, making a decision or being involved in a concerted practice in contravention of Section 4(1) is a criminal offence and would expose those parties, their directors, managers and officers to the risk of criminal prosecution.
In light of the above, it is not possible for the HSE to engage in negotiations with PDF or the IPU in relation to fees or margins. The HSE has written to all community pharmacy contractors, setting out the position in relation to these issues in detail. The negotiation team has been examining how best to address this issue for pharmacy contractor services. To this end, the team engaged with the IPU to clarify the legal position and the situation in relation to contract negotiations. The team has now discussed with the IPU proposals to examine ways of carrying out a contract review that would comply fully with competition law.
It is necessary also to ensure that any future contractual arrangements entered into by the HSE for the provision of primary care services, and the process by which they are arrived at, comply with the terms of the Competition Act 2002. In this context, further legal advice is being sought in relation to the permissibility of negotiating contractual fee arrangements with organisations representing other self-employed health professionals. My Department and the HSE will consider this advice, when received, in order to determine the most appropriate way in which to advance the putting in place of contractual arrangements which facilitate the delivery of modern, high-quality and accountable primary care services.
With regard to IPU representation of pharmacists, both my Department and the HSE recognise the IPU as the collective representative body for its members. There is, and will continue to be, ongoing dialogue with the IPU, within the constraints of the legal advice provided. I wish to see that dialogue continuing in a constructive manner.
