Linda Ayala, executive director of Community Pharmacies Association of Puerto Rico
By JOHN McPHAUL
jpmcphaul@gmail.com
The Justice Department, through its Office of Monopolistic Affairs (OAM by its Spanish initials), filed a complaint Thursday against Abarca Health LLC, a pharmacy benefit manager (PBM), after finding that it engaged in deceptive and unfair practices by imposing the rates it would pay pharmacies for drugs.
Justice Secretary Domingo Emanuelli Hernández said at a press conference that “as part of its oversight function, the Office of Monopolistic Affairs identified a serious problem.”
“This PBM used unfair methods of competition and deceptive actions to change drug rates and rehire its pharmacy network,” he said. “For that we are requesting that fines of $5,000 be imposed for each pharmacy to which they made a false representation.”
The complaint details that in 2018, Abarca became the exclusive PBM of a medical plan on the island and its commercial lines of business, providing pharmacy network management services that accounted for more than 800,000 patients in Puerto Rico. During that period, Abarca Health made an amendment to its pharmacy provider contracts, effective Jan. 1, 2019.
In reporting the drug rate changes as part of its contract amendment, Abarca Health falsely indicated that it had conducted a “thorough market analysis” for six months and that the new rates were “competitive and consistent with the market and the needs of our customers.”
However, the OAM found that Abarca Health falsely represented having performed such an analysis. Through the investigation, the OAM confirmed that the PBM had not conducted any formal or written market analysis. So the Justice Department charged the company with deceptive conduct to justify the new rates and get pharmacies to accept the new contractual terms, through what constitutes misrepresentation and an unfair method of competition.
“This is an unacceptable practice that hinders fair competition in the field of health, and we will not allow it,” Emanuelli Hernández said. “So we have filed a complaint with the Department of Consumer Affairs [DACO] to order Abarca Health to cease and desist from this behavior, and to impose the corresponding fines and penalties.”
The complaint was filed with DACO pursuant to Article 3 of Law 77-1964, known as the Law on Monopolies and Restriction of Trade.
Linda Ayala, the executive director of Community Pharmacies Association of Puerto Rico, welcomed the Justice Department’s determination to investigate the claim, which she said ultimately affects patients in their process of acquiring medications.
“Any rate or contract change affects the patient,” Ayala said. “If you used to pay me for a medication at one price and then change it …, that always affects the patient. This affects all medications, because they all go through the PBM. The practices of the PBM, since it is not a regulated entity within the chain, are not totally transparent. By not being totally transparent, they have no obligation to teach anyone anything and everything is like the formula of Coca Cola, which nobody knows what it is, but we all have to pay for it.”
Ayala added that the law that is supposed to regulate PBMs (Law 82 of 2019) has been halted by the Financial Oversight and Management Board as it waits for the Fiscal Agency and Financial Advisory Authority to deliver the information required for the law’s implementation.