The High Court has found that participating pharmacists’ contracts included an entitlement to advance payments, and that the Minister’s decision to stop them amounted to an impermissible unilateral change to those contracts.
Mr Justice Clarke’s judgment, delivered on 29 June 2007, concerned payments under the General Medical Service (GMS) scheme. Pharmacists dispensed medicines to eligible patients and were reimbursed by the State. Advance payments were introduced to help cover delays in processing claims. The system later adjusted payments to reflect each pharmacy’s GMS prescription business.
In December 2002, the Minister announced a Government decision to freeze the advances. Existing pharmacists’ payments were held at 2002 levels; new entrants received none, and pharmacies treated as new after a change of ownership or location also lost eligibility. The plaintiffs initially raised several legal grounds, but at trial pursued only contractual claims. They abandoned claims based on legitimate expectation and for damages.
The Irish Pharmaceutical Union (IPU) argued that its 1996 agreement with the Minister created contractual obligations. The Minister disputed that. The court found that neither the 1971 nor the 1996 agreement between them was legally enforceable. The part of the claim relying on a contract between the IPU and the Minister was therefore dismissed.
The court reached a different conclusion about the individual pharmacists’ contracts. Although the standard 1996 contract did not expressly mention advances, the judge found that a clause making those contracts contingent on arrangements agreed between the Minister and the Pharmaceutical Contractors’ Committee incorporated the existing advance-payment scheme. The pharmacists’ contracts were formally with the Health Boards, and later the HSE, but the court held that the individual pharmacists could seek declarations against the Minister in the circumstances of this case.
The Minister’s delay defence also failed. The judge found that there was no factual basis for the complaint, noting that responses to the IPU’s legal arguments had been promised but were late or never delivered.
The court held that the advance-payment term applied for as long as the individual contracts remained in force. It also stated that pharmacists could not insist that those contracts continue indefinitely: the HSE could negotiate changes or terminate them. The Minister could not, however, unilaterally discontinue advances under contracts that remained in force. The judgment did not settle the final wording of the declaration. The judge said he would hear counsel further on its precise form.