In October 2008 the Competition Authority (the "Authority") consulted on collective action in the community pharmacy sector seeking input on ways in which health professionals, providing services for or on behalf of the State, might engage collectively with the Health Services Executive (HSE) in compliance with competition law. This is because competition law limits the coordinated activities of professionals like pharmacy contractors. On 23 September 2009 the Authority published its Notice in Respect of Collective Action in the Community Pharmacy Sector (notices set out the views of the Authority relating to a particular competition law area and are provided for guidance purposes only.)

   

The Notice gives guidance on the application of Irish and European competition law to collective action by community pharmacy contractors and other health professionals, when engaging with the HSE. In particular, it clarifies the limits competition law places on coordinated action by self-employed health professionals in relation to competitive factors such as fees.

  

The Notice restates the Authority’s recommendation on the adoption of the “messenger model” for setting contractual terms and conditions. Provided adequate safeguards are put in place, this allows for a degree of collective input by self-employed health professionals while minimising the potential for collective action in breach of competition law. The messenger model would operate as follows. A third party (the “messenger”) obtains from each service provider (e.g. each pharmacy contractor), individually, the level of fees that the service provider would require from the State to provide the relevant service. The messenger provides this information to the State, which uses it to devise a fee scale for the reimbursement of service providers that will secure the desired level of participation in the State’s scheme. All communications between the messenger and individual service providers must remain confidential vis-à-vis other service providers, so that no service provider knows what any other service provider requires to participate. Each service provider would then be offered a revised contract by the State, which the provider, again individually, must choose to accept or reject. Under this model fees are not negotiated.

  

The Notice also takes account of the Financial Emergency Measures in the Public Interest Act 2009, the Minister for Health and Children's decision to alter remuneration of pharmacy contractors under this legislation from 1 July 2009 and the subsequent withdrawal of services by a number of pharmacies. It concludes that:

 

“widespread withdrawal by individual undertakings (pharmacies) following the decision of the buyer to fix a fee different from the fee recommended by the undertakings, in circumstances that are likely to give rise to a reasonable suspicion that the action is collective, might trigger an investigation by the Authority. In particular, an investigation would be more likely where there is widespread withdrawal at the national level, or where withdrawal was concentrated within a specific local market.”

    
Beauchamps Solicitors advises the Irish Pharmacy Union ("IPU") on competition law issues.  The issuance of this Notice is not a finding of wrong doing on the part of the IPU or its members.

 

Link to Notice
https://www.tca.ie/templates/index.aspx?pageid=1272&locale=0