THE DEPARTMENT of Health has claimed that the number of community or retail pharmacies providing services to GMS patients has actually increased since the Government began cutting fees and allowances in 2009.

In an internal submission to Minister for Health James Reilly in advance of recent cuts, senior Department of Health officials indicated that warnings put forward by the Irish Pharmacy Union (IPU) that reductions in fees and allowances would lead to significant pharmacy closures had not come to pass.

Officials said there were actually more than 50 additional community pharmacies now providing GMS services than there were in 2009.

“The IPU claimed in 2009 that the reductions in the 2009 regulations would lead to 5,000 job losses and over 600 pharmacies closing.

“In its submission to the review of the regulations in June 2010, the IPU claimed 1,600 job losses in the pharmacy sector as a result of the reductions in the 2009 regulations.

“The department is unable to assess the number of job losses in the community pharmacy sector and notes that any job losses cannot be solely attributed to measures addressing the costs in the State schemes.

“However, the department has established that in May 2009 prior to the introduction of the FEMPI [financial emergency legislation] regulations there were 1,623 pharmacies providing GMS services. This rose to 1,640 by May 2010 and in January 2011 the figure was 1,677.”

The president of the IPU, Darragh O’Loughlin, said that while the number of pharmacy outlets may not have fallen as a result of cuts, a significant number of pharmacists have now lost control of their businesses.

He said many pharmacies had gone into either receivership or examinership with some being bought out by their creditors or others.

He said a study commissioned by the IPU had found there were now about 1,500 fewer staff working in the pharmacy sector – including about 300 pharmacists – than there were before the cuts, while many outlets were opening for fewer hours each week.

Under the measures introduced in 2009, the Government increased the dispensing fee for pharmacists but cut the wholesale element of the reimbursement price for most drugs under the community schemes from 17.66 per cent to 10 per cent.

At the same time, it reduced the retail mark-up payable on most drugs under the Drug Payment Scheme and the Long Term Illness schemes from 50 per cent to 20 per cent. In addition, premium payments associated with the medical card for patients over age 70 were abolished.

The Department of Health told the Minister that the IPU had maintained the cuts had resulted in reductions of about 32 per cent in payments to pharmacists.

“The department’s analysis indicates that the IPU is claiming that all of the savings accruing to the HSE as a result of the reduction of the wholesale mark-up represents a loss to pharmacies.

“The IPU calculations include reductions in the wholesale mark-up payments as a loss to the pharmacies but do not follow through on this methodology by including wholesale mark-up as a payment to the pharmacy sector.

“Therefore, by including wholesale mark-up reductions as a loss and not including the wholesale mark-up per se as a payment, the IPU are claiming a higher percentage reduction than in fact occurred.”

The IPU said the community pharmacy sector suffered large and disproportionate cuts in payments as a result of the FEMPI measures introduced in July 2009.

It said that using HSE data, community pharmacists had contributed €123 million in savings directly to the Exchequer as a result of the FEMPI cuts.

It said the FEMPI measures were compounded by a number of other Government policy initiatives which resulted in further reductions in earnings.

It said these included a series of reductions in the price of off-patent medicines in 2010, the introduction of a prescription levy for GMS patients and the planned introduction of generic reference pricing.

It said this meant that overall “pharmacy has yielded savings of €153 million or about €95,000 per pharmacy as a direct consequence of changes since July 2009”.

The IPU said the cuts introduced by the Government over the past two years had resulted in a reduction of opening hours of outlets, a 10 per cent fall in overall employment in the sector and a 4 per cent drop in numbers of pharmacists employed.

It said that 14 per cent of pharmacy owners, who own 20 per cent of pharmacies, were reporting a loss.

“Across the board, community pharmacy has reduced costs and taken every step possible to stay open and remain in business. In spite of severe retrenchment in costs, pharmacy businesses remain vulnerable. All figures are based on the first six months of the FEMPI cuts and represents a continuing downward trend.

“Costs have been cut to the bone, employment and opening hours have been reduced, more pharmacies are loss-making and, regrettably, the financial health of the sector is unstable.

“This, in turn, will impact both on the level of patient service offered by individual pharmacies as well as by the sector as a whole.”

In May 2009 there were

1,623

pharmacies providing GMS services. This rose to

1,640

by May 2010 and in January 2011 the figure was

1,677