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PJ Online | News: Irish pharmacy margins four times those in the UK

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The Pharmaceutical Journal
Vol 269 No 7212 p240
24 August 2002

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Irish Pharmaceutical Union (IPU) response (more)


Irish pharmacy margins four times those in the UK

PHARMACIES in the Irish Republic have profit margins of 33 per cent, the highest in the European Union and more than four times the UK level of 7.5 per cent, according to a consultants' report.

The report, prepared by international economic consultant Indecon for the government-appointed review group on the Irish pharmacy sector, also claims that the prices of some pharmaceutical products in Ireland are among the highest in Europe.

But the Irish Pharmaceutical Union (IPU), which has been campaigning to have the recent deregulation of the sector reversed, dismissed the findings as "simplistic and superficial". The price comparison was flawed, it said, being based on just three products, when Irish pharmacies stocked up to 20,000. The report also failed to take other factors into account, said the IPU.

The consultant found that the price of one antibiotic, Augmentin 500, was higher in Ireland last year than in any of the 12 EU countries, except Denmark. With Band Aid, only France was dearer than Ireland, while in the case of cough and throat relief medicines, Irish prices were the eighth highest.

According to the report, the price of pharmaceutical products rose by 12.7 per cent in Ireland between 1996 and 2001, which was the highest increase in a list of six European countries.

IPU president Richard Collis dismissed the price comparison, saying "Much play is made of the supposed price increases, but the report ignores the fact that the prices of prescription medicines have been fixed by government since 1993, and therefore individual pharmacists have no control over what prices they charge. When you understand that, plus the fact that there is no margin charged on 72 per cent of the drugs dispensed, you get a more rounded appreciation of what is happening in the sector."

However, pharmacists contacted by the consultants are reported to have admitted that the 1996 Pharmacy Regulations, which restricted the number and location of new outlets, kept prices and profits high.

It was these regulations, criticised as anti-competitive by the Organisation for Economic Cooperation and Development and the Irish Consumers' Association, that Health Minister Micheal Martin recently revoked, setting off the IPU protest campaign.

The minister is now awaiting a report from the review group before deciding a new regulatory structure for the sector. How the consultant's findings will affect the review group's conclusions is unclear. Mr Collis said that the emergence of the report at this time "is obviously geared towards advancing a particular agenda".
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