Sir, - I read with interest that the McCabe pharmacy chain had paid "key money of £2.7 million" for a pharmacy in Limerick (Commercial Property, July 12th).
Your writer said the high price was "primarily dictated by new EU restrictions governing the opening of new pharmacy outlets". There are indeed restrictions on such openings but they are neither recent or EU-related. The regulations in question, the Health (Community Pharmacy Contractor Agreement) Regulations were introduced in 1996 by the Department of Health following negotiations with existing pharmacy owners represented by the Irish Pharmaceutical Union. These regulations severely limit the granting of a health board contract to a new pharmacy being set up by requiring compliance with a number of restrictive conditions - including that it locate a minimum set distance from any existing pharmacy and prove that it will not adversely affect the financial viability of any existing pharmacy.
It is these regulations which have prevented a contract being granted to a pharmacy in Knock, Co Mayo. Although this village is visited by some two million pilgrims annually and has no existing pharmacy, permission to grant a contract for a pharmacy there was refused on the grounds that this would adversely affect the financial viability of existing pharmacies in neighbouring towns.
These regulations have effectively set up a cartel for those who already owned pharmacies prior to 1996 and had their contracts automatically granted to them. Since their introduction, the prices being paid for existing pharmacies has increased dramatically, as highlighted by the price paid for the Limerick pharmacy. In effect, these restrictions are resulting in huge profits for existing owners from the sale of their pharmacies and the emergence of chains of pharmacies able to afford to pay these prices.
The Consumers' Association of Ireland has raised serious concerns over the refusal to grant a contract to the pharmacy in Knock and about the restrictive nature and effects of the regulations in general. Despite bringing these concerns to the attention of the Minister for Health, Micheal Martin, no satisfactory response has been received. Surely it is time that the Minister intervened to review these regulations to ensure that the provision of pharmacy services is more concerned with the needs of the consumer rather than the making of huge profits. -Yours, etc.,
Michael Kilcoyne, Chairperson, The Consumers' Association of Ireland. Upper Mount Street, Dublin 2.