A group of pharmacies has lost its High Court challenge to the Minister for Health's decision to impose substantial cuts on fees paid to them for dispensing drugs and services under the Community Pharmacy Agreement.
Mr Justice Bryan McMahon rejected claims by the Haire group of pharmacies that cuts of some 24 percent introduced last July as part of the government's response to the economic crisis breached their property rights and rights to equal treatment under the Constitution.
The judge accepted the cuts, introduced via regulations made under the Financial Emergency Measures in the Public Interest Act of 2009, may be a great burden for some pharmacists.
'But the State's concern to get value for money cannot be ignored either', he said. The State was obliged to achieve its statutory obligations on 'a best value basis'.
Given the 'exceptional' threat to the economic well being of the State and to the people, he had no difficulty accepting the 2009 Act is exceptional and capable of affecting people adversely.
That was 'one of the objectives' of the Act but he was not satisfied it was 'draconian'. It was 'a measured, proportionate and carefully drawn' piece of legislation with a number of 'significant safeguards' inbuilt.
While the Haire group had claimed it could become insolvent if the cuts stood, no accountancy evidence to that effect was given to the court although the State had invited such evidence, he noted.
The Haire group, also known as the Kissanes group, operate pharmacies in Carlow and Kilkenny and brought its action against the Ministers for Health and Finance, the Government and the Attorney General.
The court was told pharmacists were paid €421 million in fees and mark up last year and Minister for Health Mary Harney has stated she planned to reduce payments by €133m in a full year.
In his judgment, Mr Justice McMahon ruled the pharmacists have no contractual/property right preventing the Minister changing unilaterally, after consultation, the rates of payment in their contract.
It was accepted a contractual right was a property right but the pharmacies had no entitlement under the Community Pharmacy Contractors Agreement - their contracts - for their rates of remuneration to continue into the future, he said.
The Minister had every right both under the contract and the 2009 Act to introduce the cuts, he ruled.
The Minister could also recast the whole structure of the existing scheme, provided she gave proper notice, and introduced a better scheme, he added.
The Minister had, in fact, decided to implement the cuts under the 2009 Act rather than the contract because presumably she felt the 2009 Act was a more effective way of achieving the changes, he said.
She also engaged in a serious consultation process under the Act sufficient to satisfy the consultation requirement under the contract.
The Irish Pharmacy Union (IPU), the representative body for 1,800 pharmacists, has expressed its disappointment at today's ruling.
The IPU will review the ruling and its implications with its legal advisors in due course.
In light of Judge McMahon's statement that the Financial Emergency Measures in the Public Interest Act 2009 was 'exceptional', and that 'Clearly it is capable of affecting persons adversely and that was one of the objectives of the legislation', the union will be taking the opportunity of the forthcoming review of payments by the Minister to demonstrate the impact of the cuts on members.
It will seek to have this matter and related issues addressed in that process.
