Speech by Simon Harris TD, Minister for Health on Private Members’ Business

**check against delivery**

A Cheann Comhairle, I wish to address the motion.

I thank the Deputies for raising this very serious issue and I wish to set out the position in relation to it. This issue before us highlights the challenges that the HSE and all public bodies face in the procurement of services from private contractors and the importance of investing in probity and control functions.

While Deputies are right to challenge and question the systems in place within the HSE, to ensure that monies are spent appropriately, and I will address these issues this evening, we must also be cognisant of the obligation on private contractors to comply with the terms of their contracts with the State.

Primary Care Reimbursement Service

The HSE’s Primary Care Reimbursement Service (PCRS) pays primary care contractors, including GPs, dentists and pharmacies, for goods and services supplied to eligible public patients, under community health schemes such as the medical card, long term illness, high tech and drugs payments schemes.

This is an enormous undertaking. There are around 7,700 contracts, with annual payments of more than €2.5 billion. In the drug schemes alone, pharmacies make claims and are reimbursed for over seventy four million separate items every year – almost one and a half million items every week.

Pharmacists are reimbursed for medicines dispensed to patients in previous months, with a mix of electronic and paper claiming.  In 2015, the PCRS reimbursed €1.9 billion in the community drugs schemes, to cover the cost of medicines and pharmacy fees. This included €1.38 billion in drug costs (including €116 m in wholesale mark-ups) and €390 million in pharmacy fees.

This colossal level of activity is delivered to a very high level by a single agency.  I have been to the PCRS and I have seen, at first hand, the hard work, dedication and enthusiasm of the staff who deliver this volume of work, month in and month out, on behalf of patients.  

Phased Dispensing

The matter raised involves a commercial contractor claiming fees for phased dispensing to medical card patients in community pharmacies.

Phased dispensing was established in 1996 for patient safety, under the new pharmacy contract. It is a clinical process, to help certain patients to manage their medicines. It may be specified by their doctor, they may be starting a new medicines regime or using medicines that are unsuitable for monthly dispensing, or, in exceptional circumstances, may be unable to safely manage their medicines.

A key part of the process is that medicines are dispensed at regular intervals, say once a week, so both patient and medicines are monitored.

Where phased dispensing is appropriate, pharmacies are paid per dispensing for their professional services.

Phased Dispensing Investigation

While the Government is not opposing the motion, a number of points need to be appreciated.  These concern the instigation, operation and success of the PCRS investigation.

I have been briefed in detail by the HSE about this matter.  I understand that an HSE data review of phased dispensing, in 2014, raised concerns about activity and claiming levels.  In early 2015, based on this analysis, the HSE began investigating claiming by the Lloyds Pharmacy Group.

The investigation involved complex analysis of activity for the period from 2010 to 2015, and detailed pharmacy inspections. Such a forensic approach is the only concrete way to establish misclaiming under current systems. It was supported by information provided in confidence, later in 2015, from former employees and media sources.

I am further informed that the investigation was completed in August 2015 and disciplinary proceedings were being prepared against individual pharmacies within the group, under clause 15 of the pharmacy contract. This process can lead to termination of a contract.

Following protracted negotiations, Lloyds agreed to a settlement that included full repayment of over-claimed fees.  The PCRS continues to monitor phased claiming by the Lloyds group, with further payments suspended until compliance with phased dispensing rules is fully established.

The HSE considers that this was the best possible outcome in this case, with full return of moneys owed. The PCRS is also examining other claiming issues and is conducting investigations into claiming by a number of other contractors.

The HSE has advised that, during the Lloyds investigation, it sought advice from the Garda Bureau of Fraud Investigation and the Pharmaceutical Society of Ireland (PSI), which regulates pharmacists and pharmacies in Ireland. The HSE will make any appropriate referrals required concerning investigations.

The Lloyds fees investigation was a very successful operation, set in motion by an HSE PCRS audit of business activity, and one that reached a positive conclusion.  I agree fully with the Deputies that this was a most serious matter. However, irregularities were detected by, and the investigation initiated on foot of, the HSE’s own reviews.

HSE PCRS Audit and Probity

In all payment structures, there must be a significant element of trust between contractor and payer.  A well-functioning probity and control function underlines this and protects the taxpayer, patients and legitimate operators, who make up the majority of contractors. In a health setting, it also helps ensure that resources go to the people who need them, and that maximum value for money is achieved.

The purpose of the PCRS audit and probity role is to ensure that payments are claimed for services provided.  Reviews like these, in particular pharmacy inspections, are detailed, forensic and time and resource intensive.

Following analysis and restructuring, the PCRS audit function has been, and continues to be, strengthened, with the development of dedicated resources. This objective has been pursued as a matter of urgency, and includes appointment of a Head of Schemes Control, supported by specialist staff, a Control Steering Group and a Probity and Governance Group.

I am pleased to note that the PCRS has, this year, appointed four full time pharmacy inspectors, two data analysts and two dedicated case managers. A third data analyst and two more case managers are being recruited.

The PCRS Probity and Control function is also developing a work programme, with specific measures for community pharmacy, dental, optical and general practice, to ensure that claims comply with relevant schemes.

I would also like to note that the PCRS probity programme is on target to recover some €20 m this year. I am confident that this increased level of activity will set the tone for proper engagement by contractors in providing services to our patients.

Amendment to Motion

The House will note the proposed amendment on two other issues:  reclassifying medicines to over the counter and transparency in pharmacy prices and services.

These issues are the responsibility of the relevant statutory authorities – the Health Products Regulatory Authority (HPRA) for medicine classification and the Pharmaceutical Society of Ireland (PSI) for professional practice and conduct.

In general, a medicine supplier applies for a change in status for its product.  I understand that the HPRA actively seeks applications from suppliers and gives ongoing consideration to the issues surrounding this matter, in Ireland and elsewhere.

The PSI deals with patient queries on pharmacy medicine pricing.  Patients are entitled to ask for a breakdown of their medicine costs and the person in charge of the pharmacy should provide that information. The PSI has advised pharmacies that this should include an itemised receipt.

While I accept the principles involved, I oppose this amendment on the basis that the issues are matters for the relevant statutory authorities.  I do not propose to intervene in their roles at this stage.