So here we are at the start of another year. One of my new years resolutions is that I won’t keep having a go at the PSI, the HSE and Dr Reilly. I hope I can keep it until the end of this article at least.
So what does 2012 hold for pharmacy in Ireland? More of the same it would seem. Word from the Dept. Of Health is that the legislation for generic substitution and reference pricing will be ready in early 2012. This has been talked about in HSE/DoH circles for so long that at least we have some idea what to expect. We can all understand the desire of the HSE to pay as little as possible for medicines but I wonder did they realise the knock on effects that their price gouging is having. I refer to the current range of stock shortages and out of stocks. This is easy to understand from the manufacturers point of view. If you are getting more money for your product in nearly every other country then naturally you give give priority to the more valuable markets. This is all the more so when there is some production line or supply chain problem. Or put more bluntly, he who pays least gets served last.
But another effect of this is that Ireland has become a supplier to Europe’s parallel importers. Many branded lines now have a wholesale price lower than many other European counties. And many manufacturers have seen a large increase in wholesale sales of their product which is not matched by retail prescription or GMS/DPS/LTI sales. The point made above about serving the best paying markets holds doubly true here.
This is not to say that HSE pricing is responsible for all the stock shortages that we are experiencing. I would venture to say that parts of the HSE and DoH still don’t realise that the Irish market is a very small part of the European and global markets. Some of the drug companies that produce these medicines have a turnover larger than Ireland’s Gross Domestic Product. I should resist the temptation to use the “slightly smaller than the greater Manchester market” cliché but I won’t. We are just not important enough for them to bother with.
Aside from the market for prescription medicines what faces us? Consumer spending is down. And luxury items such as cosmetics and perfumes are usually one of the first things that consumers cut back on. We have already seen reductions in spending on front of shop. And while there might have been a slight recovery over Christmas I expect that we will see further reductions in 2012. The public, no more than pharmacists don’t know precisely what is coming down the tracks from the government, tax or spending wise so they are holding on to as much cash as possible. And that is if they have any to spare after wage reductions and mortgage increases.
So enough of the doom and gloom. How about something positive to start the new year. One thing I am positive about is that there will be pretty few pieces of good news. One of the few bits of good news that I could find is that most of the banks to whom pharmacists owe money to have come to the conclusion that they are better off keeping these pharmacies open rather than fore-closing. At least while they are open for business they have some value and can generate some cash flow. Once the bank closes them they cease to have any real value and the bank can give up any hope of recovering anything at all. The main exception to this so far is AIB and the McSweeney Group. Here AIB wants receivership and the group reckon that they have a viable business and want examinership. The courts have put the group in examinership for now but only time will tell if the remaining pharmacies which are still open have a realistic hope of clearing the €18M debt. There is already a number of potential investors looking at the group. Hopefully by the time that this is published something a little more concrete will be in place and all those working for them will have one major worry lifted.
One perverse positive is the number of pharmacies in examinership, receivership and administration. Perhaps now the HSE and the DoH will realise that the pharmacy cow has been milked dry. They cannot squeeze any more out of it. That’s if they are actually aware of the numbers. But then it occurred to me. The receiver, examiner or administrator of these pharmacies would have notified the GMS of new arrangements for payment while in examinership etc. So maybe the rest of us may achieve some benefit from the suffering of others.
Another positive might be the sales of alternative medicines. I know that I have had a go at certain alternatives in previous articles but some of them do have a value when used properly and a certain part of the population have faith in them. Rather than going to the doctor when unwell with minor ailments many will now try what they perceive as cheaper alternatives. To a certain extent this also holds for regular OTC meds for minor ailments. Many will now use the local pharmacy as a cheaper alternative for advice and treatment for dealing with what they perceive as minor conditions. It’s a bit of a throw back to the pre-GMS days when the local chemist was seen as the poor man’s doctor.
So the first article of the new year and only a gentle poke at the HSE and the DoH. Nothing at all about the PSI or Dr Reilly. Don’t worry, it won’t last.
By now most of you will have received the mail shot from the Benevolent Fund asking you to take part in their draw. The nature of the Funds work means that they cannot publicise it’s activities much but it is definitely worthy of our support. You would spend more than the cost of a ticket on a good night out. So if you haven’t contributed already then cough up. You never know you might actually win something.