• Feel regime will revert back to pre-October

• Order’s three months up come January 17

• ‘Strong request’ for work permit fees ease

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Pharmacies are voicing cautious optimism that their lower-margin price control regime could end as early as next Tuesday with the industry also pushing for a reduction in work permit fees.

Shantia McBride, the Bahamas Pharmaceutical Association’s (BPA) president, yesterday confirmed in messaged replies to Tribune Business inquiries that the tone emerging from meetings with government officials this week was that the existing regime “should cease” by January 17, 2023, as set out in the mid-October Order that implemented it.

A similar message, seen by this newspaper, was delivered to Association members and pharmacists yesterday. Headlined ‘Update on price control amendments’, it also suggested the agreement reached with the Government on November 3, 2022, was likely to end in line with its intended three-month lifetime.

“The amendments should cease on January 17, 2023,” pharmacists were told. “Yesterday’s [Wednesday’s] meeting was a pleasant recap of BPA and government experience during the price control amendment period.... Government was pleased with the feedback of our compliance and assistance given to price control during their visits to our stores. Customers spoke of the discounts they received and all-around positive experience at their individual pharmacies.”

Tribune Business understands the meeting was likely attended by Michael Halkitis, minister of economic affairs, who has responsibility for price control and consumer matters. Ms McBride, in her replies to Tribune Business, said that while there was no explicit “confirmation” that the existing price controls will end next Tuesday, and that the sector will revert to the pre-October 2022 regime, there were signs this would occur.

“Of course no confirmations, but it was stated as if it should cease,” she wrote. The present price controls were agreed by the Government and pharmaceutical industry in early November 2022 as a means to settle the dispute that erupted after the former, without any consultation, introduced changes the prior month that slashed both retail and wholesale margins in a bid to combat the cost of living crisis.

The sector and the Davis administration ultimately traded-off higher mark-ups with an expanded list of price controlled items that increased by ten medications. As a result, for just over two months now, pharmaceutical wholesalers and retailers have enjoyed one set mark-up across the board, at 20 percent and 40 percent respectively, for all price-controlled items in a move that simplified the structure.

It placed the price control mark-ups for wholesalers at a slightly higher level than the Government was initially proposing, between 15-18 percent, but some five percentage points less than the 25 percent they have enjoyed for the past 40 years.

As for retail pharmacies, the agreed 40 percent was at the top end of the range initially proposed by the Government. The Davis administration had sought a cut to between 35 percent to 40 percent, but the mark-up was ultimately some ten percentage points less (a 20 percent reduction in percentage terms) than the 50 percent that pharmacies have enjoyed for the past decade.

In return for the Government keeping the margins at the upper end of its target range, the pharmacy industry also agreed to expand the price-controlled medications by ten items to include cancer and kidney treatment drugs. However, there was no confirmation yesterday from the Government that the sector’s price control regime will revert to that which existed pre-November 2022.

Mr Halkitis could not be reached, and did not respond to messaged inquiries, for comment before press time last night. And Clint Watson, the Prime Minister’s press secretary, deflected questions on the issue as discussions between government and private sector were ongoing. “We’re going to wait to see what comes out of those talks,” he added.

Given that the present regime was only agreed in early November, the Government could argue that the three-month term does not expire until early February 2023 and seek to leave it in place for several more weeks. And it is also possible that the Davis administration could seek to extend it further as it prioritises protecting middle and low income Bahamians from the inflation-driven cost of living crisis.

Meanwhile, the BPA, in its message to pharmacists, said it had also discussed reducing work permit fees for the sector. “BPA made strong requests for the reduction of work permit fees to lessen the burden on our current workforce while reiterating our commitment to public education,” its note to the industry said.

Ms McBride did not comment on this aspect, and the version of the note sent to this newspaper eliminated any reference to work permits. “BPA reiterated our commitment to public education,” it stated.

However, Branville McCartney, the former Democratic National Alliance (DNA) leader, whose family owns Wilmac’s Pharmacy, yesterday backed the Association’s call for an easing of work permit fees to help cure “the shortage of Bahamian pharmacists” that the industry has faced for many years.

“The fees went up a few years ago, but we have a shortage of pharmacists in this country which dates back some time,” he told Tribune Business. “The Government had to bring in pharmacists some years back itself. The fees to bring in pharmacists went up tremendously, and certainly if that was a topic of discussion that’s something I hope the Government will look at and reconsider.

“We’ve had a shortage of pharmacists in this country for many, many years and the Government is well aware of that. We simply don’t have sufficient Bahamian pharmacists. It compromises service to the public, and the company as a whole. If you don’t have qualified personnel you cannot operate. I hope it’s something positive. We could do with something positive for the New Year.”

All businesses need trained and qualified personnel in key positions, especially in the pharmaceutical industry, which by its very nature impacts the public’s health and safety by distributing prescription drugs. The sector’s fear is that high work permit fees act as a barrier to recruiting skilled expatriate staff essential to operational survival when there are insufficient trained Bahamians available and willing to do the work.

Mr McCartney, meanwhile, also voiced hope that the present price controls will “come to an end soon” and the pre-November 2022 position be adopted. Having previously disclosed that his family’s business is incurring a loss under present margins, he added yesterday: “It has impacted, no doubt about that. We’re hoping it’s just for a few months.....

“We’re just hoping this comes to an end as agreed. At the end of the day, we’ve lived up to our part, reducing the prices as agreed, and hopefully the Government will live up to their part for the time period to do it.”