January's deregulation has left health boards in limbo regarding new General Medical Service applications

At least 40 start-up pharmacies have been prevented from opening around the Republic in recent months because of a lack of official guidelines on the award of General Medical Services (GMS) contracts by health boards.

Until the pharmacy sector was deregulated at the end of January, GMS contracts - agreements which govern the financial relationship between community pharmacies and the State - were governed by 1996 regulations. Deregulation automatically revoked these regulations, leaving health boards in limbo regarding new GMS applications.

In effect, this means that almost three months on from the deregulation of the sector, most areas of the Republic have yet to see any real change in the availability of pharmacy services.

While at least one health board has chosen to proceed on GMS contracts on the basis of pre-1996 regulations, others have decided not to consider any new applications until interim guidelines on the issue have been issued by the Department of Health and Children. A spokesman for the Department said yesterday that the interim guidelines would be issued "shortly".

More than 40 applications for GMS contracts are thought to be outstanding around the Republic, with 21 applications on hold in the Southern Health Board alone. Eighteen applications have been frozen in the Eastern Regional Health Authority area.

The Mid-Western Health Board, meanwhile, has awarded four GMS contracts to new pharmacies since the sector was deregulated. It is understood that legal action was ongoing regarding a previous refusal on one of these contracts at the time of deregulation, and that the health board judged it preferable not to engage in that action.

GMS contracts are a crucial element of most pharmacies' business, with very few community pharmacists choosing to trade without them. Essentially, they allow pharmacies which dispense medicines to medical card holders to be reimbursed by the State, via the General Medical Services Payments Board. If a pharmacy did not have a GMS contract, it would be limited to dealing with over-the-counter medicines, or private prescriptions, where the patient pays for his or her medicines.

Boots, which confirmed yesterday that it was among the pharmacists whose applications had been frozen, operates a number of its Irish pharmacies on a non-GMS basis. A spokeswoman said the company was keen to see some progress in the situation.

"Naturally we regret the delay because we have applied for contracts for some of our existing pharmacies so that we can provide a full pharmacy service for our patients," the spokeswoman said.

Under the 1996 system, a health board could withhold a GMS contract if it believed the viability of an existing community pharmacy was under threat. The Irish Pharmaceutical Union, the pharmacists' representative body, has consistently called for the retention of the 1996 regulations.

The union said last week that it was considering industrial action in response to the Government's deregulation move. This decision was met with disapprobation by the Competition Authority on Wednesday, when it warned the IPU that it would take its members to court if any "collective action" occurred.

A Competition Authority spokesman said yesterday that the awarding of GMS contracts was a matter for the Department of Health and Children and declined to comment on the issue.

IPU president Ms Marie Hogan said meanwhile that she would welcome a "coherent approach" on the guidelines for GMS contracts. She said that the union was in favour of a "rational spread" of pharmacies around the Republic.