The great drug cost rip-off

  • Niall Hunter, Editor

Comparisons are often odious, but here goes anyway.

There's a scene in a Monty Python film whereby a grossly obese man, after feasting on a large and sumptuous meal, explodes after eating a 'wafer thin mint'.

One couldn't help but be reminded of this when the Irish Pharmacy Union, in seeking to contextualise why some pharmacists are charging hard-pressed health consumers up to 200% more than some of their pharmacy colleagues for the same prescription medicine, pointed out that pharmacists were operating on 'wafer thin' margins for their overall business.

The pharmacists' representative organisation also told us, in a seemingly misguided attempt to make us feel better about sometimes getting ripped off when we're ill, that the sector was 'extremely competitive.'

This presumably is the same model of healthcare competition that has brought us spiralling private health insurance costs. To the more naive among us, competition is supposed to give us better value, but not apparently in the wonderful world of healthcare.

But, we hear you protest, how could this price-gouging by some pharmacists be happening when James Reilly, the HSE and others frequently tell us that the price of drugs is falling? Well, the answer is, this is the case only up to a point.

In general, the cost to the taxpayer of subsidising medicines on State schemes has come down as a result of deals with manufacturers and a reduction in pharmacists' mark-ups for these schemes.

However 'private patients' - people who are not eligible for State schemes (and this would comprise most people going into pharmacists for prescription drugs)- are often still paying exorbitant prices for these drugs.

This appears to be happening by what can only be called profiteering - courtesy of the large mark-ups some pharmacists charge on privately-dispensed drugs.

The National Consumer Agency (NCA) has now informed people availing of the luxury of getting sick and seeking treatment that not only do their drugs cost many multiples of what they cost in Spain, but also might cost much more than they do in that other pharmacy down the road, or in the next town or suburb.

The NCA report noted a price differential of as much as 112%, for example, for the same ulcer drug in different pharmacies in Dublin.

It would appear that some pharmacists are cross subsidising the 'hits' they may be taking in other areas of their business by inflating their mark-up some prescription drugs.

The pharmacists' union is of course, only doing its job in defending pharmacists and it has a point in stressing how the recession and Government fee reductions have hit its members.

However, normal commercial logic would dictate that if you are a business/professional person, when times are hard for everyone, surely you should be offering better value. Your margins might be a bit thin, but your customers' margins may be emaciated.

Certainly, any business has to take whatever commercial measures it deems necessary to weather the recession, and our hard-won capitalistic freedoms dictate that pharmacists are technically allowed charge more or less what they want. But their should be some moral limits to these measures.

Pharmacists say their businesses and incomes have suffered badly from the recession, and this is undoubtedly the case. But many of the patients coming through their doors have had their livelihoods wiped out by the same recession.

Despite this, some of these customers may still not be eligible for a medical card. For them, a decision to visit the GP when ill is not taken lightly these days.

They go into the pharmacist to get their prescription filled, their wallets €60 lighter following the GP visit, only to find out that they are being charged, for example, €42 for a drug they could have got for €20 elsewhere. They are unlikely to react too kindly to being fleeced by their friendly pharmacist.

The IPU says prices vary from pharmacist to pharmacist and patients will go to the pharmacist that best suits their needs, not alone in terms of price but also in terms of the professional service that they receive.

A cynic would say that while pharmacists are obviously well-trained professionals, it would want to be a hell of a professional service to justify a pharmacist charging 199% over the odds for a particular medicine.

The NCA, commenting on its price survey, essentially advised people to 'shop around'. In a normal commercial market this would be fair enough, but we're not talking here about buying Easter eggs.

There is a huge problem in Ireland of people getting proper access to what is an expensive primary care system.

Sick people, faced with the prospect of forking out a sizeable sum to their GP for a brief consultation, and then having to traipse around pharmacies to make sure they are not ripped off on drug costs, might simply decide to stop accessing primary healthcare altogether.

The means that potentially, these patients will get sicker and end up in hospital.

Articles such as these usually end with an exhortation for something to be done to stop this madness.

However, in this case, this might be easier said than done. Our competition law, (which often seems to do little for the consumer) dictates that business entities and professionals cannot have upper limits placed on their prices. The pharmacy regulator, the PSI, does not have any role in pharmacy price regulation.

The Department of Health/HSE can restrict State drug prices but not, apparently, drug prices for private patients.

Yet the Department of Health and the HSE are ultimately responsible for the health of the nation as a whole. The majority of primary care patients are private patients. Drug price inflation in the private sector, apart from being seriously annoying and unfair, potentially has a deleterious affect on the health of the nation.

Minister Reilly needs to take a serious look at the pharmacy sector in Ireland.

Many pharmacists 'operate at a loss'

Some pharmacies charging rip-off prices

 

 


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