Derek Brockwell, aged 53 and from Glasgow, escaped from police custody at Tallaght Hospital in Dublin on Tuesday.
He was arrested at a bar on Bedford Street in Belfast on Wednesday night.
Police said a Taser was used when he stabbed himself in the stomach with a knife when officers approached.
Cliff McElhinney, who works in Urban Pharmacy on Dublin Road in Belfast city centre, told Irish state broadcaster RTÃ‰ that Brockwell had threatened staff with a knife and demanded money.
"He came up to the counter with a purchase and whilst the pharmacist was ringing that through the till, he produced a knife," he said.
"He held another member of staff at knifepoint and robbed the pharmacy then.
"Whilst it was happening staff followed procedure, they were calm and did everything they were supposed to do, but obviously being held at knifepoint is a frightening experience and not something you expect to happen in the centre of Belfast."
He said Brockwell did not get away with a significant amount of money.
Brockwell was later arrested on suspicion of two counts of robbery and two counts of possessing an offensive weapon.
He was found by police about 200 yards away from the pharmacy at about 19:30 GMT, sitting outside the Bridge House bar on Bedford Street.
Police said when officers approached him, Brockwell took out a knife and began stabbing himself in the abdomen and police had to use a Taser on him.
He remains under PSNI (Police Service of Northern Ireland) custody at the Royal Victoria Hospital where he is receiving treatment for his injuries.
At a press conference, Supt Paula Hillman said officers would be questioning Brockwell about the incidents once he leaves hospital.
She also said police are continuing to liaise with police in Dublin and Lancashire police.
Brockwell arrived in Dublin in February 2012 after absconding from a prison in Lancashire while he was on day release.
He was serving a life sentence for a series of armed robberies in London.
He was convicted of armed robbery in Dublin in 2013 and was serving a seven-year sentence in Portlaoise Prison. He escaped from Tallaght Hospital on Tuesday after attacking two officers who had brought him there for treatment.
Police have said a prisoner who escaped from custody in the Republic of Ireland on Tuesday robbed a Belfast shop at knifepoint shortly before he was arrested.