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October 2001 issue Pharmacy Today magazine


Pharmacists waiting for reimbursement of about $1 million for supplying hospital-only medicines will have to wait a little longer.

The Pharmacy Guild has been fighting to secure the back payments, some dating back nearly two years. Three months ago, the Ministry of Health announced payments would be made this month. This is now on hold.

Former ministry pharmacy contract negotiator Mark Barrett told Pharmacy Today in July, the payments would be finally paid out as an act of "good faith" on the ministry's part, as soon as Health Benefits Ltd had ironed out a few problems.

The money owed is a top-up to the standard dispensing fee for a range of hospital-only medicines. A higher dispensing fee for hospital-only medicines should now be in place, according to the ministry.

Ministry deputy director general Dr David Lambie says he regrets the delay and the money in question is a "small proportion" of the total $213 million budget for dispensing.

He hopes the matter will be resolved once the ministry has all the required information.

Fix it

Pharmacy Guild president Murray Burns says pharmacy has provided ample information and the guild will offer whatever data it can to help overcome the problem.

"But it appears to be a major systems issue where an organisation that spends over $1 billion a year can't manage something that is reasonably simple," he says.

"Electronic claiming should have made it a doddle for the ministry, but it hasn't, and some pharmacies' cash flows are being squeezed as a direct result."

But regrets and talk of national budgets don't pay the bills of small businesses, say some pharmacists.Grafton Pharmacy, on the ground floor of Auckland Hospital, is owed a "substantial sum" in back payments, says owner Brian Walker.

At best, supplying hospital-only medicines is a delicate balancing act offering often slim, and sometimes no profit margins, he says. Carrying high price stock and not knowing when or if it will be sold adds to the day-to-day pressures of keeping business turning over.

"So the effect (of not receiving full payment) for the past 18 months means an erosion of cash flow and a great deal of effort restoring liquidity. Luckily, in that time we haven't had major capital costs such as shop fit-outs."

Not having the required stock on hand can also prove expensive, leading to added costs such as double dispensing and couriering drugs to patients free of charge.

Ministry as boss

Auckland pharmacist Warren Flaunty says the ministry's failure to pay up is another illustration of the government's shoddy treatment of pharmacy.

Providing hospital-only medicines can mean expensive stock, including partially used orders sitting on the shelf as the expiry date ticks by, he says.

"No other business or profession would put up with this kind of treatment but because the ministry pays us, the ministry believes it can."


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