THE MARK-UP which the Health Service Executive paid wholesalers for drugs before it controversially reduced it without agreement earlier this year is to be restored from the beginning of next month.
In September 2007, the HSE announced the mark-up wholesalers would get for supplying community pharmacies would be reduced from 17.66 per cent to 8 per cent on January 1st, 2008. It said the move would save about €100 million a year. However, after a war of words between the HSE and pharmacists, the change was put off until March 1st last.
Legal action was instituted. The High Court found last month the HSE was in breach of its contract with pharmacists when it decided to reduce payments for the provision of drugs and services under the medical card scheme. The HSE was ordered to pay the costs of the case.
In response to the court ruling and in a major climbdown, the HSE said yesterday it had decided to restore the original mark-up arrangements from the beginning of next month.
"In compliance with a recent High Court judgment, the wholesale mark-up the HSE pays pharmacies for medicine supplied through the various medical card schemes will be increased on November 1st from 8 per cent to 17.66 per cent," it said.
"This move will add approximately €8 million per month to the cost of the various medical card schemes provided by HSE or almost €100 million a year."
The move will put significant pressure on the HSE's already over-stretched budget for this year, as it also has to refund pharmacists about €50 million deducted from them since March.
Pharmacists have welcomed the decision. Liz Hoctor, president of the Irish Pharmacy Union (IPU), said the HSE decision recognised that it had acted illegally in breaching the terms of pharmacy contracts.
She said once the HSE had repaid pharmacists what was outstanding to them over recent months, the IPU would be keen to engage in discussions with it to reduce the State's medicines bill.