14 Jun 2016

DHB warning over extra pharmacy charges

8:27 pm on 14 June 2016

The Nelson-Marlborough District Health Board is warning that some pharmacies in the Nelson Bays region are charging people more for prescriptions than is allowed under their contract.

Some pharmacies are charging consumers 20 cents to $1 more per prescription than their contract entitles them to.

Some pharmacies are charging consumers 20 cents to $1 more per prescription than their contract entitles them to. Photo: 123RF

Pharmacies said they had added extra charges because the DHB had failed to address under-funding of medicine margins.

Pharmacies in the district and around the country have said they were no longer funded enough to cover the expense of stocking medicines, and had added extra charges to avoid being out of pocket themselves.

The Nelson-Marlborough DHB was alerted to the issue last month by a complaint from a member of the public - that some pharmacies were charging consumers the shortfall, which ranged from 20 cents to $1 per prescription.

It issued a public notice warning consumers it was happening, and published a list of pharmacies on its website that were not charging consumers the additional fee.

It usually costs $5 per item for fully subsidised medicines prescribed by a GP, and fully funded medicines for children under 13 years are free. Medicines prescribed by a specialist cost more.

John Handforth, the owner of a Nelson dispensary listed among those that were not charging extra, said people were suffering as a result.

He acknowledged there was a problem, but said to say they were losing money on prescriptions was "stretching the truth a bit".

"We have people coming in with scraps of paper, and people are budgeting down to the dollar so while it might not sound a lot, I've heard the figure of an extra dollar added to prescription items - that does come into play for a lot of people," Mr Handforth said.

There was room to make up the shortfall on higher cost items, he said.

At least nine pharmacies passing on charges

Nelson-Marlborough DHB alliance support manager Andrew Goodger said they were aware of nine pharmacies in Nelson and Tasman that were passing on charges to consumers.

Mr Goodger, whose role was to oversees the board's contract with pharmacists, said it was right to take the action it did.

"I don't think it's a big step for a DHB to ensure that patients that are vulnerable have access (to medicines) - it's totally appropriate action for a DHB to be taking."

Pharmacies were reimbursed for the cost of medicines they bought.

Mr Goodger said they were also given "margin funding" which was a contribution to the stockholding costs worn by pharmacies.

The Pharmacy Guild of New Zealand said a big reduction in the price of many commonly used medicines, such as antibiotics, meant the percentage margin was no longer a fair reimbursement. It said many were out of pocket through providing medicines, and members had been trying to convince DHBs to change the funding model.

The guild's acting chief executive, Linda Caddick, said they rejected a plan in April because it simply shuffled existing funding, did not introduce any new funding and did not address the plight of those dispensing high-cost medicines such as those used by HIV and cancer patients

"There are fixed costs for the wholesalers and they pass those on to pharmacies and this has resulted in a shortfall in funding, compared with what the DHBs are paying pharmacies - they pay only a percentage margin," Ms Caddick said.

She said no one had missed out on medicine, but there was a solution.

"An ideal way to fund it would be a set amount per pack to really reflect the true cost to the wholesaler of getting medicine from the manufacturers to the pharmacies, then we'd be reimbursed the same sort of amount we're being charged," Ms Caddick said.

Mr Goodger said margin funding had increased in recent years, but he acknowledged the current funding model was skewed towards one sector, and a revised model was now before DHB bosses for approval.

He said if agreement was reached a revised contract would be in place by early August.

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