An action by pharmacists against the Minister for Health over the decision to discontinue advance payments as part of the General Medical Services (GMS) scheme has opened in the High Court.
The Irish Pharmaceutical Union (IPU) and a number of pharmacies have alleged wrongful and unilateral alteration by the Minister of an agreement for the advance payment of pharmacists participating in the scheme.
The outcome of the action is expected to affect some 1,380 community pharmacy contractors who are alleged to have suffered multi-million euro losses as a result of shortfalls in advance payments.
The IPU claims an agreement was entered into in 1971 to secure the participation of retail pharmacists in the reorganised GMS scheme.
It involved the Minister making advance payments to retail pharmacists to fund the costs incurred in providing stocks of medicines and medical equipment.
Between 1971 and 1996, the Minister paid advance payments to retail pharmacists. In June 1996, the IPU says it and the Minister entered an agreement for the provision of community pharmacy services which introduced the standard community pharmacy contractors' agreement.
It says a principle of that agreement was an improvement in the terms of retail pharmacists and community pharmacy contractors participating in the GMS.
The terms and conditions of that 1996 community pharmacy contractors' agreement provided for a review of it after five years.
Where there was no agreement following such review, any matters of dispute were to be subject to mediation and recommendation by another party who would be appointed by the Minister after consultation with the IPU's pharmaceutical contractors' committee, the IPU claims.
In entering into the community pharmacy contractors' agreement, the IPU said it was relying on the representations made to it to the effect that the 1996 agreement did not affect or alter advance payments.
However, in December 2002 the IPU says the Minister unilaterally altered the 1996 agreement by ceasing payment of advance payments to retail pharmacists and community pharmacy contractors participating in the GMS.
The Minister also refused to refer the dispute to mediation and recommendation by a third party.
It is claimed that because of this breach, pharmacists and community pharmacy contractors have sustained and continue to sustain significant losses in funding the costs of providing the stocks of medicine required under the GMS.
Opening the action yesterday, Brian O'Moore SC, for the IPU, said the advance payment scheme was very significant because it had convinced many pharmacies to sign up to "radical legislation".
The decision by the Minister to discontinue making advance payments in 2002 was part of a number of measures designed to save money and amounted to a "violation" of the 1996 agreement.
The hearing continues today.