MORE THAN 400 pharmacies have initiated legal actions against the HSE over its unilateral and controversial changes in the community drugs and medicine payments scheme.
The changes, in which the HSE has reduced the margin paid to pharmaceutical wholesalers from 17 per cent to 8 per cent in a bid to save €100 million and "decouple" payments for pharmacists from drug costs, came into effect last month. The Irish Pharmacy Union claims the measures will lead to the closure of some 300 pharmacies and potential job losses of some 5,000.
The legal actions, the latest challenges to the cuts, were admitted to the list of the Commercial Court yesterday by Mr Justice Peter Kelly and were adjourned for further directions to July 7th. Two earlier actions by other pharmacies were adjourned to later this month to deal with issues concerning discovery of documents.
Mr Justice Kelly has indicated his view that the cases should be heard together.
The cases arise from the HSE's decision to reduce the reimbursements payable to pharmacies for provision of community pharmacy services under the Community Pharmacy Contractors Agreement. The HSE decision was to come into effect last December but was deferred to March 1st.
The HSE has said State expenditure on drugs has increased by 370 per cent over the last decade to some €1.745 billion paid under various community schemes, including the medical card scheme and long-term illness scheme, last year. Some 1,600 pharmacies shared some €367 million in fees and mark-up payments last year.
In their actions, the pharmacies claim the HSE's unilateral action is an unlawful breach of contract and will result in their suffering serious and unsustainable losses. They are seeking orders restraining the HSE from acting in breach of contract and/or their legitimate expectation and are also seeking damages.
Mr Justice Kelly yesterday admitted two separate sets of proceedings by various pharmacies against the HSE.
One set of proceedings has been brought by 300 pharmacies across the country. In a statement of claim in that case, Kinahan Pharmacies, trading as Rochfords Pharmacy, Corofin, Co Clare, said it had invested in a new community pharmacy in Corofin on the basis of the terms of the Community Pharmacy Contractors Agreement.
Those terms included reimbursement of the wholesale price of medicines and other services calculated by reference to the ex-factory price or ex-manufacturer price, plus an agreed mark-up of 17.6 per cent.
On that basis, the pharmacy said it had remained financially viable. However, the HSE's reduction in that mark-up to a new lower price, the ex-factory price plus an 8 per cent mark-up, meant it would cease to be financially viable and it would have to close.
Similar claims are advanced in the second set of proceedings, brought by IPOS Investment plc and four other limited liability companies, which have established and operate 140 pharmacies nationwide.
