The High Court has rejected a challenge by five pharmacy companies to regulations that reduced payments to community pharmacy contractors, refusing their requests for an injunction, declarations and damages.
In a judgment delivered on 17 December 2009, Mr Justice McMahon held that the pharmacists had not established a contractual right to fixed reimbursement rates. Their agreement with the Health Service Executive allowed the Minister for Health and Children to change rates after consultation, and the court found the consultation carried out for the regulations was sufficient to meet that requirement.
The companies, which operate pharmacies in Graignamanagh, Thomastown and Borris, challenged the Financial Emergency Measures in the Public Interest Act 2009 and regulations made under it. The regulations changed payments for services provided under State schemes including the General Medical Scheme, Drugs Payment Scheme and Long-Term Illness Scheme. The plaintiffs said the new fee structure would reduce their scheme income by at least 24% and make them insolvent.
They argued that the regulations were not properly published, that consultation had not been meaningful, and that the reductions were an unconstitutional interference with property rights and unequal treatment compared with cuts of about 8% for other professionals. Those were the plaintiffs’ claims; the court noted that they had not produced comparative evidence about other professionals’ circumstances or contracts, or accountancy evidence that the reductions would make them insolvent.
The judge found that the State was entitled to take wholesalers’ rebates to pharmacists into account when reviewing remuneration. He also concluded that the reductions were not arbitrary or disproportionate in the circumstances, pointing to the studies and consultation preceding the changes and the statutory safeguards, including annual review and a right for a contractor to withdraw on 30 days’ notice.
The court did not determine the precise percentage loss, noting that the parties had agreed it was unnecessary for the legal arguments. Nor did it decide the European Convention on Human Rights claims in detail, as little argument had been advanced on them. The judgment’s conclusion was to refuse all relief sought.