THE current dispute between pharmacists and the HSE is a hugely important one in deciding what kind of country we want to emerge from the current economic crisis or perhaps even in dictating if we are to emerge from this crisis at all.

At least part of the reason for the disastrous state of the public finances is successive governments' reluctance to face down well-organised vested interests that put their own interests before that of the country.

Particularly during the time of huge budget surpluses, the standard government reaction to any flexing of muscles by farming organisations, various professional groups and regional lobbies was to roll over and write a bigger cheque.

It is obvious that this approach is no longer sustainable and that due to the enormous hole in the public finances, the government now has to attempt to regain some of the ground that has been ceded during the spending splurge over the past decade.

This is never easily done but, as evidenced by the hugely disappointing latest exchequer returns last week, the government has no option but to press ahead.

It is, of course, a serious concern that patients have been so seriously inconvenienced in recent days by the pharmacy dispute. Given the delays in providing medicines, it is not surprising that there have been calls, not least from the main opposition parties, for health minister Mary Harney and the HSE to sit down with the Irish Pharmacy Union and reach an agreement which is acceptable to all concerned.

However, Harney is right to hold the line and say that while she will discuss the future of pharmacy services with the IPU, she will not talk about pricing issues with the body.

There are competition-law issues preventing her from doing so. But equally importantly, the government, backed by a vote in the Dáil, has already made its decision on this issue in, what it believes to be, the national interest. And given the sovereign authority of our national parliament, that decision should be respected, unless a court of law decides otherwise.

It is entirely understandable that no group is going to be happy about a reduction in its income, even a relatively privileged one such as pharmacists. But the truth is that the status quo is simply unaffordable. The cost of drug-dispensing in this country is far too high. It should be genuinely shocking that the cost of drugs and medicines under the medical-card and community-drug schemes has doubled since 2002 to over €1.68bn in 2008 but sadly it fits a pattern that is replicated across virtually all areas of government spending in the past decade. Of this €1.68bn, over €600m, a staggering 35%, is down to the cost of distribution and dispensing.

The Competition Authority has pointed out that the fees and mark-ups that pharmacists have been getting up to now have been "very generous by any standards; among the highest in Europe". And it was simply untenable that the state and the taxpayer was paying full price for medicines when half of the wholesale mark-up was being retained by pharmacists by way of discounts from wholesalers.

Even with the savings of €133m a year, the average pharmacy will still be getting guaranteed annual revenue from the state of around €261,000. Not too many small businesses are in receipt of such a gilt-edged income stream.

As the HSE has pointed out, that will simply bring pharmacists' income under these schemes back to the level of 2006. The impact may even be diluted due to the increase in volume of drugs prescribed.

Nobody expects the IPU to like what the government is doing. However, its tactics during this dispute are certainly open to question.

It is quite obvious that the government will not row back from this decision. Even if it wanted to, it could not. This is a test case for the government. Given the dire budgetary situation, it is going to introduce huge cutbacks affecting groups of people vastly more marginalised than pharmacists.

If the government backs down on this issue, it has no chance of delivering cutbacks in spending later this year. It simply has no option but to hang tough. That is the new reality we are all operating within. The sooner the IPU realises this the better for everybody concerned.