Monday 25 September 2023

Independent pharmacies lose ground to the voracious growth of chains

This year there are 103 independent pharmacies less than in 2018, compared to an increase of 189 between chains. The large chains, also owners of distributors, prevent others from obtaining products at competitive prices.

Paying the bills


“Liar”, “corrupt”: Words Ticos associate with Chaves

QCOSTARICA (Crhoy) Since Rodrigo Chaves Robles took office in...

“There is a competition between left and right populism on the continent”

Q24N -- Populism, “an unwanted child of democracy,” is...

President Chaves to visit Panama amid migration crisis

QCOSTARICA -- Costa Rica's President Rodrigo Chaves is planning...

Fatphobia in Costa Rica out of control

QCOSTARICA -- In the era of social media, where...

Is Costa Rica’s ‘Blue Zone’ vanishing?

QCOSTARICA -- The shrinking of Costa Rica’s Blue Zone...

Costa Rica clarifies tax treatment of crypto-assets

QCOSTARICA - Costa Rica's tax authority - issued a...

U.S. Returns Historical Indigenous Artifacts to Costa Rica

QCOSTARICA -- NBC6 Miami reports that several pre-Columbian artifacts...

Dollar Exchange

¢538.05 BUY

¢543.60 SELL

23 September 2023 - At The Banks - Source: BCCR

Paying the bills


Q COSTA RICA – Larry Ramírez, pharmacist and vice president of Farmacoop, the first pharmacy co-op in Costa Rica, has been running his business for 20 years and has also been involved with groups that are working to set up “rules” in the market before it gets too concentrated.

51% of the pharmacies in Costa Rica are independent, the rest are pharmacies under the chain model, of which 32% are large chains. (Photo: Fabian Hernandez)

Data from the Ministry of Economy, Industry and Commerce (MEIC) for 2023 shows one of the first consequences – while independent pharmacies will have 100 fewer establishments in 2023 than 2018, chain stores added 189.

The voracious growth of the chains is visible, for example, the Ramírez pharmacy is located in Guadalupe de Goicoechea, on the east side of San José, in one of the areas where the competition is more predatory: a 4-kilometer radius, his business competes against six branches of Farmacia La Bomba, the closest being less than 2 kilometers away.

- Advertisement -

In Costa Rica, three distributors, GFI, CEFA and Cofasa, control 60% of the drug import and distribution market. Another 46 divide the remaining 40%, according to MEIC data published in 2019.

The wholesalers have their own pharmacy chains, GFI has Sucre and Farmacias Santa Lucía, for example – that get preferential prices on medicines.

Ramírez has seen this first hand, since he buys meds from CEFA, which is a part of the Cuestamoras business group – and they’re actually his competition since they own Farmacia La Bomba and Farmacia Fishel. He’s seen differences of up to 33% between the price he pays and the price his competition (the wholesaler pharmacies) charges.

“It would be cheaper for me to go buy it from them,” said Ramirez.

For example, the distributor sells him Concor at ¢30,535, where at La Bomba it is sold for ¢23.400.

- Advertisement -

“As an independent pharmacy I have to buy it for ¢30,000 and they sell it for ¢23,000,” said Ramírez.

Read more: Why haven’t the price of medicines in Costa Rica gone down yet?

The concentration of the drug value chain (laboratories, distributors and pharmacies) is called verticalization and is one of the reasons to which the director of Research at the MEIC attributes the decrease in independent pharmacies, since they have less muscle to get better prices and have sometimes lost the ability to set prices.

Ramírez referred to the big pharmaceutical chains in Chile and how they had huge price wars that even led to convictions for unfair competition and fines. However, the profits they made were way more than the fines, so it ended up driving out the small independent pharmacies. In the end, the larger chains colluded and raised the prices, so the consumers lost out.

- Advertisement -

He said, “It’s the same story wherever you go. Now Chile is trying to figure out how to help the independent pharmacies.”

The pharmacist insists that the efforts made by various governments, including the current one with their decrees, haven’t been successful because the whole process is flawed. He believes it’s essential to look at the whole thing and set up rules to make room for more competition.

“You don’t have to have a doctorate in Economics to realize that the problem lies in the distributors and pharmaceuticals,” he assures.

Translated and adapted from Semanario Universidad. Read the original here.

- Advertisement -
Paying the bills
Avatar photo
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Check out “MiMejorCompraCR” and see how food prices stack up in Costa Rica

Q COSTA RICA - The Ministerio de Economía, Industria y Comercio...

17 companies identified that offer tourist services on installments without authorization

QCOSTARICA - At least 17 companies offer tourist packages on installments...

Subscribe to our stories

To be updated with all the latest news, offers and special announcements.

%d bloggers like this: