Community pharmacies warn of pressure from chains to enter gov’t health plan

By John McPhaul

Community Pharmacies Association Executive Director Linda Ayala called on Gov. Wanda Vázquez Garced on Monday not to give in to the pressure of lobbyists from large pharmacy chains that seek entry into the Government Health Plan (PSG by its Spanish initials) served by community pharmacies since 1993.

“We call on the Governor to be in harmony with the public policy of this administration to protect the small and medium local merchant that has been so affected by hurricanes, earthquakes and the pandemic, and not give in to the large chains in the Government Health Plan,” Ayala said in a written statement. “As an example, Walgreens participated as a pharmacy provider for PSG until 2003 and left when the Health Insurance Administration (ASES by its Spanish initials) refused to accept the drug rates they wanted to impose and that would have increased the cost of drugs for the government. Given the low population, they are looking to expand their business at the expense of the pharmacies here. That cannot be allowed.”

The Community Pharmacies Association has noted that the issue will affect the health services of the most vulnerable population because it will bankrupt community pharmacies in many municipalities, undermining the more than 14,500 direct jobs created by community pharmacies.

“After more than 15 years of absence as a provider for the PSG they [chain pharmacies] want to stay with the market and displace the community pharmacies that have served the PSG patients so well, according to ASES’ own data,” Ayala said. “If we bankrupt the local pharmacies, what is going to happen when the parent companies of these [chain] pharmacies decide to leave the country because it is not profitable for their business model and we have to rebuild the community pharmacy? It’s going to be uphill and very difficult.”

Since the PSG was created in 1993, community pharmacies have been successful ASES providers, with plan beneficiaries reporting 94 percent satisfaction with the service of community pharmacies, according to a survey conducted by ASES.

“Unlike chain pharmacies, community pharmacies are present in all unpopulated areas and low-income communities. Large pharmacy chains are located exclusively in the country’s metropolitan areas and in areas with mass transit routes,” Ayala said in the statement. “We ask the Governor not to give in to pressure and lobbying from these companies because of how disastrous it would be for community pharmacies and patients of the Government Health Plan. We call on the Governor-elect, Pedro Pierluisi, to be aware of this situation and to support community pharmacies in their claim, as recently expressed publicly.”

By 2018, community pharmacies had created a total of 14,413 jobs throughout Puerto Rico, with an approximate volume of drug sales of $1.1 billion annually, compared to the volume of large chain pharmacies of $1.2 billion annually, according to the Community Pharmacies Association. Community pharmacies have hired between 25 percent and 30 percent of all pharmacy sector employees in Puerto Rico in the past 10 years.

Community pharmacies comprise more than 800 small and midsize businesses that generate wealth that remains in Puerto Rico, Ayala noted in the statement. They have a distinctly Puerto Rican business model, contrary to chain pharmacies such as Walgreens and CVS, which take their profits to other jurisdictions.

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