Chile Economy slider — 28 April 2016

chile glasses

by

Alana Gale

photo “New glasses” by Alba García Aguado,

28 April 2016. Santiago, Chile. In October, El Mostrador reported that three big companies control 90% of the pharmaceutical market: Salcobrand, Cruz Verde, and Farmarcias Ahumadas.  These companies were accused of price fixing, colluding to raise the prices of over 220 medications in 2008. That is not a crime in Chile. In the USA, it comes with stiff prison sentences.

Then, in 2012, Salcobrand and Cruz Verde were fined the equivalent of $20 million US dollars each for fixing the prices of 206 prescription drugs, according to La Tercera.

Two of these pharmacies have since been bought by international firms including Walgreens of the USA.

Despite this punishment, the price of most of these medicines in Chile remains higher today than in 2008.

The pharmacies have gone to the legislature as well to protect their market: they were able to defeat a bill that would have allowed grocery stores and other retailers to sell over-the-counter medicines, like aspirin.

The 2013 “Health and a Glance” report by the Organization for Economic Cooperation and Development (OECD) found that out-of-pocket payments for medicine make up 4.6% of household consumption in Chile. This number ranks among the three highest of any country in the OECD. Out-of-pocket spending also makes up 30% of total health expenditure, details the report.  So drugs and medical care are costly in Chile.

The Rise of Municipal Pharmacies

As a response to this price gouging, in October of last year, mayor of Recoleta Daniel Jadue (Communist Party) opened the first municipal pharmacy in Chile, reports El Mercurio. The idea of public pharmacies that would go around the private system has the support of the Ministry of Health.

Writing for La Nación, Patricio Gutiérrez Villagrán describes how the pharmacy works. People can order a drug if they have a prescription no older than six months. The pharmacy will import it directly from the laboratories or buy it through the firm that sells to public hospitals. This enables the public pharmacy to sell the products for much lower prices than those of the private pharmaceutical companies.

And the price difference is significant, says BBC News. The municipal pharmacies can offer medications for prices ten times cheaper than what their private competitors charge.

For example, last year, 100 mg of aspirin cost only $1.70 in US dollars at Recoleta’s municipal pharmacy. The same thing could be purchased for $8.60 in US dollars at a private pharmacy. Likewise, Hidroronol T, an anti-hypertensive drug used to treat high blood pressure, could be bought for $14.40 US dollars from the pharmacy in Recoleta, as opposed to $152-$195 US dollars from the private sellers.

Since the inauguration of the public pharmacy in Recoleta, many other municipal pharmacies have opened. On March 30th, La Tercera announced the arrival of a communal pharmacy in Providencia. Just three days after that, another municipal pharmacy began operation in Ñuñoa, reported La Tercera. The pharmacy there even offers smaller doses of medicine for people who can’t afford to buy a whole pack or who only need a few tablets.

Now Comes the Public Optician

But Jadue hasn’t stopped with the idea of public, non-profit pharmacies. Judith Herrera C. write in La Tercera that the mayor had opened a public optician in Recoleta. The optician’s office, named “Reinalda Ferreira,” reduces the price of glasses by 70%.

Much like the cost of medicine, eyeglasses can be a large expense for Chileans. For a pair of glasses with frames, organic glass, an anti-reflective coating, UV protection, a case, and a cleaning cloth, a Chilean person could pay $67.27 or $95.59 US dollars ($44,900 or $63,800 Chilean pesos respectively) at different private companies.

However, the new municipal optician’s office in Recoleta can provide the same eyeglasses for $8.24 US dollars ($5,500 Chilean pesos).

The office functions by providing each customer a free medical consultation with a medical technologist, who will then file a prescription for the optical lenses.

Jadue told La Tercera that eyeglasses should be offered at reasonable prices and that the municipalities should try and respond to people’s needs.

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