The Government is to introduce cuts of up to €133 million in payments to pharmacists over the coming year.
The new initiative represents the latest move by the Government to reduce professional fees in the health sector.
Under the new measures the Government is to reduce from 50 per cent to 20 per cent the retail mark-up payable under the community drugs schemes.
The Government is also to put in place a new dispensing fee structure for the community drug schemes based on a sliding scale. This will see pharmacists paid €5 for first 20,000 items, €4.50 for next 10,000 items and €3.50 for the remaining items.
The Government is also to end a special payment to pharmacists which was awarded as part of the former scheme to provide automatic entitlement to a medical card for person aged over 70. It is also to reduce the “wholesale mark-up” reimbursement price paid for delivery of drugs to community pharmacies, from 17.66 per cent to 10 per cent.
Minister for Health Mary Harney said that as a result of the new measures pharmacists’ income under the various State schemes would fall back to the levels paid in 2006.
“In 2009 specifically, this income will be back to the level of 2007. With many people having lost their jobs, and wages and incomes being reduced throughout the economy, it is not unreasonable to bring income to pharmacies from State sources back to the level of three years ago’, she said.
Ms Harney said the cost of the drugs and medicines under the Drug Payment Scheme, the Long Term Illness Scheme and other community drugs schemes - including ingredient costs, payment for wholesale delivery and pharmacy dispensing fees and retail mark-ups - had doubled since 2002 and totalled over €1.68 billion in 2008.
“Put simply: it should not cost €640 million to get €1.04 billion of drugs from the factory gate to the patient”.
“The rapid escalation in cost must be curtailed. An average of a 12.5 per cent increase each year over six years in costs is not sustainable. Dispensing fees alone have doubled since 2002," she said.
The Department of Health said if the Minister had taken no action, it was estimated that total payments to community pharmacists in 2009 would amount to €550m. This is based on about 71 million prescription items being dispensed and assumes that community pharmacists would receive about €100m of the €200m wholesale mark-up by way of discounts.
“On foot of the Minister’s decision, actual payments in 2009 will amount to €495m, a saving of €55m this year”, it said.
The Irish Pharmacy Union (IPU) warned that the move by the Government would seriously damage front line health services.
The IPU, which represents 1,900 community pharmacists, could also jeopardise up to 5,000 jobs. IPU President, Liz Hoctor, said; “These cuts announced today amount to a 36 per cent reduction in the current level of payments to pharmacists. These massive cuts are utterly disproportionate and totally unsustainable.
“These cuts compromise patient services and up to 5,000 jobs in pharmacies could be lost as a direct result of this Government decision.”
The group claimed that it had been willing to accept a cut equivalent to 8 per cent of fees “in the national interest” in line with cuts in other parts of the health service.
“No amount of spin or distortion of fact will hide the devastating reality of these cuts, which is an overall cut of 36 per cent for delivering the State’s community drugs schemes,” Ms Hoctor added.
“This Minister seems determined to destroy one of the few parts of the health service that has managed to continue to deliver effective patient care in an otherwise very dysfunctional health service.”
In May the Government reduced by eight per cent the fees paid to GPs, dentists, optometrists, ophthalmologists and dispensing opticians who hold contracts with the Health Service Executive, as well as to doctors and others who take smears under the national cervical screening programme.
Payments to psychiatrists who carry out work for mental health tribunals were also reduced.
Last year the Health Service Executive sought to save €100 million by reducing payments to pharmacists. However these measures were successfully challenged in the High court.
