Health Minister Washes Hands of Pharmacy Funding Crisis

The Health Minister's failure to provide District Health Boards with an agreed $232 million for community pharmaceuticals is threatening to cause a breakdown in the relationship between pharmacies and the government, ACT health spokesman Heather Roy says.

"The Pharmacy Guild and the Ministry of Health had agreed that 1 October 2002 would be the deadline for finalising a contract.

"But the Ministry, with the Minister's knowledge, has cut funding from $232 Million to $229 million, leaving negotiations on the verge of collapse.

"The guild has been negotiating first with the Ministry of Health and then District Health Boards New Zealand (DHBNZ) for the past 18 months to try to reach an arrangement for funding pharmaceuticals for community pharmacies and chemists.

"It seems next Tuesday will arrive with the dispute unresolved and the public caught in the middle. Unless the Minister intervenes, people will probably have to pay more for their prescribed medications.

"Ultimately, cost increases will mean patients will have less access to medications. This uncertainty is bad news for patients, particularly those who depend on medications for life-threatening illnesses.

"DHBNZ, which is caught in the middle, has been telling the guild that $235 million is actually needed to deliver the pharmaceuticals - but it is now being forced by the Ministry to work within a cut to $229 million.

"The crux of the funding dispute is the increasing number of medications funded by PHARMAC and the subsequent increase in public demand.

"Also at stake is the amount of funding individual pharmacies will receive per prescription. The guild is seeking an increase from $4.97 to $5.17 per prescription - but members had indicated that they would be prepared to settle on $5.07. They are also asking for their margin to be increased from 3.5% to 4%.

"Eighteen months of negotiations have seen a shifting of the `line in the sand' several times. An original pharmacy contract should have been in place by 1 July 2001. However this failed to happen and a facilitation process was entered into with David Caygill as facilitator.

"By November 2001 an agreement was reached with an overall budget of around $232 million - to fund 39.5 million prescriptions for the 2001/02 financial year.

"Annette King, in April this year, devolved responsibility for the Caygill funding package to DHBNZ. They wanted to review the volume of prescriptions, as the contract is volume dependent. Despite many meetings since this time, an agreement has not been reached and the community pharmacies are still operating under the old contract.

"DHBNZ now says it may be forced to impose a Section 88 notice on pharmacy. This would allow the DHBs to dictate the terms of the supply of pharmacy services, without being obliged to consult.

"It is time for the Minister of Health to step in and take responsibility. Instead she appears to be washing her hands of the problem.

"Pharmacies are afraid they will be forced to subsidise the government's drug bill. If insufficient funding is allocated, pharmacists will have to pass on extra costs to the consumer.

"This Labour government campaigned on the promise of better access to healthcare for patients. Now it seems that better access means that small businesses are expected to foot the bill," Mrs Roy said.

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