Dáil Éireann Debate, Wednesday - 26 September 2007
423 Deputy Denis Naughten asked the Minister for Health and Children further to Parliamentary Question No. 228 of 26 June 2007 regarding the consultation with the IPU the progress to date; the formula which has been agreed to address competition law restrictions; and if she will make a statement on the matter. [20879/07]
Amharc ar fhreagraMy Department and the HSE have been reviewing the pharmaceutical supply chain, with a view to seeking value for money in the State's drugs bill in order to better fund existing and innovative therapies without compromising continuity of supply or patient safety. The review of the Irish Pharmaceutical Healthcare Association (IPHA) and the Association of Pharmaceutical Manufacturers of Ireland (APMI) Agreements, representing the proprietary and generic supplier representative bodies, was completed in mid-2006 and the new agreements are in place.
Following completion of the manufacturer agreements and in line with the process agreed by the Cabinet Committee on Health, the State entered talks with the wholesaler representative body, the Pharmaceutical Distributor's Federation (PDF). As wholesale margins are not addressed in the new IPHA and APMI Agreements, the State intended to negotiate direct formal arrangements with the wholesale sector.
Early in discussions, PDF refused to negotiate a new margin for community supply, based on its own legal advice that this was a contractual matter between individual wholesalers and retailers. Subsequent advice to the HSE, confirmed by the Attorney General's office and Senior Counsel engaged by the Attorney General, indicated that, under section 4 of the 2002 Competition Act, PDF as an association of undertakings may not collectively negotiate fees, prices or margins on behalf of its members.
Given the above position, and the fact that the Irish Pharmaceutical Union is also an association of undertakings, it is not possible for the State to negotiate with PDF or the IPU on fees or margins and such negotiations would place these bodies at risk of prosecution. Accordingly, negotiation with the IPU on fees, as has been done in the past, is no longer possible.
In light of the legal position arising from the wholesaler legal advice, the State negotiating team re-considered how best to address the review of pharmacy contractor services. Following consultation with the IPU, a procedure was agreed to examine available options for advancing contractual negotiations in compliance with Irish and EU competition law. This process is being chaired by Mr Bill Shipsey, SC. Both parties have tabled proposals and this process is continuing.
The State continues to recognise the IPU as the representative body for its members. However, negotiations with the Union must comply with the law. The legal issues that emerged during the wholesale sector review were raised by the wholesaler representatives. Once the State became aware of these issues, it was no longer possible to continue as intended. There is, and will continue to be, ongoing dialogue with the IPU as the representative body for pharmacists, in compliance with competition legislation. The negotiating team will consider, in the context of competition law, all available options for advancing the process agreed by the Cabinet Committee on Health for review of the pharmaceutical supply chain. I am satisfied that this process is progressing effectively.
