Tuesday, 17 May 1983
Dáil Eireann Debate
Mr. Leonard: asked the Minister for Health if he will direct the eight health boards to use their combined purchasing power to purchase drugs and hospital equipment; and if he will make a statement on the matter.
Mr. B. Desmond: With regard to the purchase of drugs by hospitals, my Department have recently concluded an agreement with the drugs industry governing the supply of drugs to the health services. This agreement provides for substantial discounts off the trade price on orders of drugs for hospitals in excess of £100. Health boards have been instructed to review purchasing arrangements to take maximum advantage of these discounts. They have been asked specifically to consider combining orders from different hospitals, where appropriate. There are considerable difficulties in applying similar arrangements to hospital equipment in view of the wide diversity of products required. In general, health boards are expected to ensure that equipment is supplied on the most favourable terms, in particular through competitive tendering, where appropriate.
Mr. Leonard: The Minister mentioned that different hospitals are to co-operate in purchasing. My suggestion was in regard to different health boards. Up to now they have not used their combined purchasing power to any extent at all in either drugs or equipment. Would the Minister agree with that?
Mr. B. Desmond: Certainly we are bringing great pressure to bear on the health boards. So far I have met five of the eight health boards and in particular I have stressed to the programme managers of the health boards the necessity to ensure combined purchasing. A number of the health boards, particularly where they are running their own hospitals, have succeeded in a substantial measure. Only yesterday I was with the North Western Health Board in Sligo and there the combined purchasing by the health board for a number of hospitals in the area is achieving significant savings. However, I agree with the Deputy that there is no centralised arrangement at the moment with regard to hospital equipment, and that can and should be provided. As I indicated, at the moment I am visiting all the health boards. I will meet the Eastern Health Board next Friday and in Galway the following week I will be meeting the CEOs and the programme managers. I shall be going through their programme with a view to ensuring that we get value for money.
Mr. Leonard: Is the Minister aware that hospital costs spiral annually? In other areas of manufactured equipment over the last number of years prices have been pegged and in some cases reduced. As a member of a visiting committee to a hospital, I have noticed this trend.
Mr. B. Desmond: There is difficulty in relation to expensive capital equipment because very often this is bought on a once-off basis, especially, for example, kitchen equipment and so on in new hospitals. I have stressed to the health boards that they must have competitive tendering and that will in many respects secure the lowest cost. I share the Deputy's concern and a study is being carried out at present, involving three hospitals, on the purchasing and storage of items for hospitals. One of the recommendations likely to arise from that study is that there will be far greater centralisation of purchasing arrangements by hospitals and  health boards to get the greatest possible discount from suppliers.
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