Number of pharmacy contractors

The number of HSE Pharmacy Contractors stood at 1,911 in 2023 (see Table 1).  For the first time, there were more pharmacy closures than new openings in 2023. This resulted in a slight decrease in the number of pharmacies compared to 2022, indicating a potential shift and emerging trend in the sector. This reflects the inflationary pressures on the sector after a 16-year dispensary remuneration pay freeze. Addressing the funding challenges by reinvestment in the community pharmacy sector could help prevent the significant number of closures anticipated in the coming years, particularly among small pharmacies in rural areas.

 

Table 1: Pharmacy contractors

Source: Annual PCRS reports.  

Number of items dispensed under Community Drug Schemes

The practice of pharmacy is becoming increasingly pressured, driven by the increasing volume and complexity of medicine management. The volume of items dispensed under the Community Drug Schemes (CDS) continues to rise steadily with nearly 100 million items dispensed in 2023 (see Table 2). This is in part due to the continuing rise in both population and in the number of eligible patients. On average, each pharmacy dispenses over 4,300 items per month on the CDS, which adds up to 51,724 items per year per pharmacy on average. The total number of items dispensed under the CDS in 2023 has increased by 45.7 per cent compared to 2009 (from circa 68 million to circa 99 million). However, the average number of items dispensed per pharmacy has only increased by 24.3 per cent over this period due to the increased number of pharmacies in the country.

 

Table 2: Number of items dispensed under Community Drug Schemes

Source: Annual PCRS reports (excluding private).  

Community Drug Scheme fees paid to pharmacies

Last year, the average CDS fees per pharmacy increased minimally by 4 per cent, driven by the higher volume of items dispensed (which increased 7 per cent year-on-year). However, compared to 2009, the number of dispensed items has grown by 25 per cent, but the average fees paid per pharmacy are less than in 2009 as a result of the sliding fee scale (see Table 3).

 

Table 3: Average fee payments to pharmacies

Source. Annual PCRS Reports.  

Total dispensing fees for the pharmacy sector have now exceeded the 2009 figures, driven by the increased volume of items dispensed (see Figure 1).

 

Figure 1: Dispensing fees verses prescription items

Average dispensing fee per item

When we exclude the High-Tech Scheme and vaccination administration from the figures to give us a measure of the fees for our core role, which is the safe supply and counselling of medication, we see that the average core dispensing fee per item continues to decline from a high of €6.00 per item in 2009 to €4.46 in 2023 (see Table 4). This represents a 25.7 per cent decline in the average fee per item over the period, at a time when wage costs have increased by 33 per cent since 2009 and other overheads have increased significantly (see IPU White Paper, Key Enablers for a Sustainable Pharmacy Model published in July 2024 and IPU Pre-Budget Submission 2025). This inflationary pressure, coupled with a declining average fee per item, will be unsustainable going forward.

  Table 4: Average dispensing fee per item Source. Annual PCRS Reports.  

In Figure 2 we can see that as the average number of items dispensed per pharmacy continues to increase, the core average dispensing fee per item decreases due to the regressive fee structure. This is why it feels pressurised to work in community pharmacy at the moment and shows the importance of addressing our pay claim.

 

Figure 2: Average fee versus number of items

Pharmacy payments for services

In recent years, the role of pharmacists has greatly expanded with the integration of additional services, which are well received by patients. However, these services require additional training and are resource intensive. Some of the key statistics are:

• Free Contraception Service: €14.87 million was paid under this service representing a year-on-year increase of 200 per cent;
• Influenza Vaccine Service: €9.34 million was paid under this service which is in-line with the figures from 2022; and
• COVID-19 Vaccination Service: €9.9 million was paid under this service which represents a drop of 50 per cent from 2022.

 

High-Tech Scheme

The volume of items dispensed under the High-Tech Scheme continues to rise as more reimbursable items are added to the scheme (see Figure 3). The volume increased from 336,996 items in 2009 to 1,036,435 items in 2023. The High-Tech drug costs paid to wholesalers and manufacturers have correspondingly risen from €315.36 million in 2009 to €1,151.75 million in 2023.   Figure 3: Number of items and expenditure under the High-Tech Scheme

Government health spending

Pharmacy fees in 2009 were equal to 2.92 per cent of government health spending. If this proportion was maintained, we would have expected total pharmacy fees to amount to €716.86 million in 2023, well above the actual total pharmacy fees paid of €452.31 million (see Figure 4).   There is heightened inflationary pressures affecting healthcare across the board. Government health spending has had to increase just to maintain current service levels as a result of demographic changes, alongside planned investment in new health measures. While healthcare is a vital public service, accounting for 28 per cent of current voted Government expenditure in 2024 (up from 22 per cent in 2015), the spending on pharmacy services has decreased at an individual pharmacy level over the period since 2009. Pharmacies face unique challenges, as 82 per cent of our patients rely on services funded under community drug schemes, which leaves us unable to pass on rising operational costs. This trend is seriously impacting the viability and sustainability of community pharmacy services.   Figure 4: Expected pharmacy fees if tracked to growth in Government health spending

Fees and allowances paid to GPs

The fees and allowances paid to GPs have increased substantially by 74.8 per cent since 2009. This comes on the back of the 2019 and 2023 GP Agreements with the HSE and Department of Health, as well as COVID-19 services. In the same period, pharmacy fees for CDS for the sector have increased by 11.7 per cent, driven by increased volume (see Table 5).   GP primary care services have seen investment in service modernisation and reform measures (including Chronic Disease Management programmes) contained in the 2019 and 2023 GP agreements. It is crucial that similar funding considerations are extended to the pharmacy sector.  

“[There has been] a 25.7 per cent decline in the average fee per item over the period, at a time when wage costs have increased by 33 per cent since 2009 and other overheads have increased significantly.”

  Table 5: PCRS payments to pharmacy and GP contractors Source. Annual PCRS Reports. g

Conclusion

The PCRS Annual Reports provide for a valuable opportunity to assess reimbursement trends of the Community Drug Scheme. This is particularly pertinent at present given the ongoing pay talks. The statistics provided by the PCRS Unit within the HSE reinforce what the IPU continuously hears from our members — the current situation is unsustainable because, as evidenced in the Report, the average fee per item continues to decline, while inflationary pressures continue to rise.

If you have further questions on this Report, or need support from the IPU’s Contract Unit, please contact us on contract@ipu.ie.