The High Court has ruled in favour of more than 20 pharmacies who had challenged the Health Service Executive's decisions reducing the amounts paid to them for the provision of drugs and services under the General Medical Services (GMS) scheme.
The outcome of the case, taken by the Hickey group of about two dozen pharmacies, will affect similar cases by hundreds of other pharmacies. It was heard in front of Ms Justice Mary Finlay Geoghegan at the Commercial Court over seven days in July and the judgment was reserved until today.
Ms Justice Finlay Geoghegan ruled in favour of Hickeys Pharmacies stating that the HSE and the Department of Health and Children were in breach of contract and could not unilaterally alter the reimbursement price of medicines under the terms of existing agreements and contracts.
The Hickey group had sought orders overturning decisions by the HSE in September 2006 and September 2007, alleging those decisions breach the terms of its contracts under the Community Pharmacy Contract of 1996 and would lead to losses of more than €2 million annually.
The new HSE payments scheme came into effect last March and is aimed at reducing the HSE bill under the GMS by millions of euro, the court heard. The HSE has argued that the scheme was intended only to reimburse pharmacies for the cost of the drugs and was never intended to be a "source of profit" for pharmacies.
The court heard the basic ex-wholesale price paid to pharmacists by the HSE for drugs provided by them under the GMS had from 1971 included a 17.6 per cent mark-up to reflect what wholesalers were invoicing pharmacies.
The HSE argues that the Minister for Health was entitled to reduce that mark-up to 8 per cent.
The Irish Pharmacy Union (IPU), which represents over 1,800 pharmacists, welcomed today’s ruling.
IPU president Liz Hoctor said: “This judgment confirms the Union’s view on the matter. In light of today’s judgment, we now expect the HSE to immediately reverse its decision to cut payments to pharmacists.
“This will pave the way for talks to get under way on a new contract.”
In a statement this evening, the HSE said it welcomed the Commercial Court's clarification that prices paid to pharmacies for medicines, under the existing pharmacy contract, could be changed following appropriate consultation with pharmacy representatives.
"The HSE welcomes this clarity in relation to the ability to lower the prices of medicines, which has been a substantive issue for the past year," it said.
Fine Gael's health spokesman Dr James Reilly said the incident was "yet another embarrassing failure in the courts."
“Everybody recognises the need to achieve cost efficiencies, however the question must be asked as to why Minister Harney and the HSE have made such a mess of their reform agenda,” he said.
He called on Minister for Health Mary Harney and the HSE to “sort out this nonsense
on ‘non negotiation’ with unions and professional bodies and hammer out a deal which will provide value for money for the patient and taxpayer and allow the continuance of the excellent pharmacy service that we have.”
Sinn Féin’s Caoimhghín Ó Caoláin said the ruling “exposes the failure of Government to clear the obstacles to direct talks between the HSE and the pharmacists’ representative body, the Irish Pharmaceutical Union, on the new contract for the General Medical Services Scheme.
“It is at the negotiating table and in the Oireachtas that this issue should be resolved, not through the courts.”