NHF, private pharmacies strike new deal on drug distribution
Private pharmacies have struck a new agreement with the state-backed drug-distribution programme that will see them operating as business partners instead of rivals, starting this month.
Competition from the Drug Serv programme operated by the National Health Fund has been taking away market share from some operators. But now the executives of the Jamaica Association of Private Pharmacy Owners, JAPPO, say they now have a pact that opens up distribution channels for Drug Serv in the private market, while curtailing the list of subsidised drugs against which pharmacies compete.
NHF provides subsidised drugs for 16 chronic illnesses and diseases. There is no means testing for persons signing up to the programme Jamaicans qualify as long as they are diagnosed with the illnesses covered.
Under Drug Serv, to fill a prescription costs no more than $200, no matter the number of drugs prescribed on the script.
Pharmacy owners like Milton Wray says that approach has served to cannibalise the market.
"If they have 100 items on the prescription they pay $200; if they have five they pay $200," he said of Drug Serv beneficiaries. Additionally, he said customers are now actively seeking out the Drug Serv windows.
Wray told Gleaner Business that as a result, he has shuttered his pharmacy outlet on Orange Street in Kingston and is close to locking down another in Spanish Town. He adds that plans to open another outlet in St Andrew have been stymied by the news that a Drug Serv window would be opening nearby.
However, other operators say there is no crisis.
JAPPO president and owner of the Three Angels Pharmacy in Mandeville, Rohan McNallie, says the new agreement with NHF is an opportunity for the private sector. As distributors for Drug Serv, McNallie said pharmacies will begin to see throughput at levels that never existed before, and it was up to each operator to manage their capacity.
FREE DRUGS RESTRICTED
Stephen Delapenha, a former president of JAPPO and owner of the Town Centre Pharmacy in Spanish Town, said the NHF has agreed to reduce the amount of drugs available under the free drug programme.
"Those free drugs are restricted to the VEN List," Delapenha said, referring to the categorisation of drugs deemed 'vital, essential and necessary' by the State to guide its procurement of pharmaceuticals.
NHF said on its website that its pharmaceutical division procures some 800 pharmaceutical items and 300 medical sundry items. They buy from approximately 80 pharmaceutical and medical supplies companies in 20 countries.
The NHF has its own inventory, which it distributes from 10 Drug Serv locations islandwide. The agreement with JAPPO will see registered private pharmacists distributing from government inventory apportioned to them. NHF beneficiaries will continue to pay $200 per prescription, but the pharmacists will be compensated at $600 per prescription.
The NHF also runs the Jamaica Drugs for the Elderly Programme, JADEP, which provides a specific list of drugs free of cost, to beneficiaries who are 60 years and over for the treatment of 10 chronic diseases.
Private pharmacies already serve JADEP beneficiaries and are reimbursed by the State.
McNallie said the bill paid to private pharmacists by the NHF for subsidised drugs is between $4 billion and $5 billion annually. NHF clients, he said, were approximately 65 per cent of the total private trade.
Jamaica has about 412 private pharmacies, about 130 of which are registered with JAPPO. The new agreement with the NHF will extend only to some pharmacies because of limited stock.
"Initially, we had hoped it would be open to all, but it may only be those with a certain radius of health centres and hospitals," McNallie said.
He added that the Government will be closing some Drug Serv outlets, including Savanna-la-Mar in Westmoreland and Union Square in Kingston, which are not located near to hospitals. The outlets at hospitals and health centres will stay open and will only facilitate drugs on the VEN list, the JAPPO president said.
"To protect the private pharmacy, you can't have your government institutions dispensing everything it's like an unfair advantage," he said.
"We also asked that government outlets desist from filling private prescriptions. We believe that only the most vulnerable should be the ones to benefit from the programme. We are saying leave it for them; and they have agreed. It's a phased rollout of many of the things we asked for," he told Gleaner Business.
The NHF promised a response for this story by last Friday, but none has been forthcoming.