More than 700 pharmacists have told the Health Service Executive that they are pulling out of the community drugs schemes.
The Irish Pharmacy Union said the pharmacists have written to the HSE to give them 30 days notice of the withdrawal of services, which will see almost half of pharmacies across the State no longer dispense medicines under the medical card and drugs payments schemes from August 1st.
The move comes after the Government announced it was to cut the payments to pharmacists operating the scheme.
The affected pharmacies are located throughout the country, in particular from Donegal, Sligo, Leitrim, Cavan, Roscommon, Galway and Kerry.
The IPU warned other pharmacies were also reviewing their position, and called on Minister for Health Mary Harney to enter talks as soon as possible to avoid a crisis.
President of the Irish Pharmacy Union Liz Hoctor said the cut in fees to pharmacists were "excessive and unsustainable".
"These cuts will damage pharmacy services, patient care and lead to up to 5,000 job losses," she said.
"Pharmacists are calling on the Minister for Health and Children to engage with us immediately on how savings can be achieved without having a catastrophic impact on pharmacy services, patient care and employment.
The union said it had made a number of suggestions to the Minister in March which would save €83 million.
"Our proposals included enabling pharmacists to offer patients the choice of a cheaper generic
medicine where it is safe to do so and the acceptance of an 8 per cent cut in pharmacy fees which is in line with cuts imposed on all other healthcare professionals," Ms Hoctor said.
"However, our proposals, which are practical and reasonable, were ignored by the Minister and instead a 34 per cent cut in payments was announced."
At present, 1,521 pharmacists have a contract with the HSE to provide medicines to patients on community drugs schemes.