Court orders HSE to pay for pharmacy chain losses in test case

THE High Court has ordered the Health Service Executive (HSE) to pay for the losses a chain of pharmacies suffered arising out of a dispute over payments under general medical services drugs and services scheme.

Sat, 20 Dec, 2008 - 00:00

The HSE must also pay interest on the monies involved in a case which was a test action for similar proceedings which are due to be taken by hundreds of pharmacies around the country.

The case was taken by the Hickey group of pharmacies, which claimed a unilateral decision of the HSE to reduce payments breached the Community Pharmacy Contract of 1996 and would lead to losses of more than €2 million annually.

Last September, Ms Justice Mary Finlay Geoghegan found that the HSE had acted in breach of its contract with pharmacists and they were entitled to be paid the amounts due to them under their agreement with the HSE.

The HSE could not unilaterally alter the reimbursement price of medicines and should have consulted the Irish Pharmacy Union, she ruled.

Earlier this month, the judge heard arguments from both sides about what the level of damages should be.

Both sides agreed the issue was covered by a rule of common law, which says where a loss is sustained by breach of contract, any damages must place a person or body in the same situation as if the contract had been properly performed.

The HSE argued the breach of contract was a procedural flaw in that a consultation process involving the Pharmaceutical Contractors Committee and the Minister for Health and Children had not taken place before the new rates of payment were implemented.

The pharmacies sought damages for the entire period in which the court had found the HSE had failed to perform the contract from September 2006, and from March last when the “mark-up” on medicines was cut from 17.66% to 8%.

In her ruling yesterday, Justice Finlay Geoghegan said the pharmacies were entitled to damages they claimed based on rates from September 2006 (with the 17.66% mark up) because of the breach of contract which she had ruled upon.

The judge also said the pharmacies are entitled to interest on the amount they would have received if the contract had been performed.