Pharmacy group in court challenge over cut in fees

 

A GROUP of pharmacies have brought a High Court challenge to the Minister for Health’s decision to cut their fees for dispensing drugs and services under the Community Pharmacy Agreement.

The Haire group of pharmacies, also known as the Kissanes group, claims the cuts will put it into a loss-making situation meaning it cannot repay its bank loans and it will become insolvent.

Pharmacists were paid €421 million in fees and mark-up last year under the agreement but Minister for Health Mary Harney had stated she planned to reduce payments by €133 million in a full year, equating to a 31 per cent cut, the group claimed.

It is claimed the Minister unilaterally reduced payment to pharmacy contractors by 20 to 50 per cent in relation to the retail mark-up payable under the community drugs scheme and also reduced the reimbursable price of medicines by 6.5 per cent.

On the application of Gerard Hogan SC, for companies within the Haire group of pharmacies, with registered offices at Amiens Street, Dublin, Ms Justice Mary Laffoy listed for Monday next an application for an injunction restraining the Minister further implementing the new regulations, effective from July 1st.

The proceedings, brought against the Ministers for Health and Finance, the Government and the Attorney General, relate to the application of the Health Professional (Reduction of Payments to Community Pharmacy Contractors ) Regulations 2009 governing services provided by the plaintiffs under the Community Pharmacy Agreement.

The pharmacies want an injunction restraining the Minister applying the regulations. Among various claims, they allege failure to provide 30 days notice of the change in the payment regime was unlawful and breached their constitutional rights.

Outlining the basis of the application, Mr Hogan said the terms of the agreement required the HSE to pay his clients a price known as “the reimbursement price” for medicines, pharmaceutical products and other items dispensed to eligible people under the scheme.

The proposed cuts would reduce profits to the Haire group by €392,279 per annum, putting it into a loss making situation of €120,899 based on figures for the year ended December last, it is claimed.

The measures meant the group cannot afford to repay its loans from AIB Bank and would become immediately insolvent, it said. It had also been advised to seriously consider closing some or all of its trading operations and make arrangements for staff redundancies.