Chile: Municipal Drugstore raises controversy and competition troubles

Chile’s Communist and Izquierda Ciudadana parties have met with the mayor of Recoleta, Daniel Jadue, in order to learn more about the operations of the “Ricardo Silva Soto Popular Pharmacy”, which opened on October 15 and will soon start selling low-cost drugs and medicines to the small town’s inhabitants.

The novel initiative was backed by the left-leaning coalition, whose members commented on the underlying issues, which they considered to be crucial to the community, such as the high price of medicines. The experiment undertaken by the Recoleta community is a direct response to the scandal, revealed early this year, involving a price-fixing cartel comprising the three largest drugstore chains in the country.

“This initiative is not only worthy of being replicated in the country’s other municipalities, it is also capable of solving a real and concrete problem. There are 54 communities in Chile that have no drugstores at all, which makes this a very complex situation, with people unable to access medication at all.” said representative Karol Cariola, a member of the lower chamber’s Health Commission.

The municipal drugstore project has been heavily criticised by some in the private sector, describing it as anti-competitive and possibly unconstitutional. Carlos Vallejo , Regional President of the Independent Pharmacy and Pharmaco-Chemists’s Association, has specifically called the possible spread of these pharmacies as a threat to the survival of independent drugstores unable to compete with the low prices and lower regulatory burden than that likely to be faced by these government-backed rivals.

Source: El Mostrador; El Sur

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.