High drug prices, brain drain hit pharma sector

The University of Technology Jamaica, which churns out the most trained pharmacists annually, is of the view that the numbers certified should be enough to serve the sector.

But there is a rising worry within the trade that job positions are going unfilled because qualified professionals are constantly migrating, and for small operators, the cost of attracting qualified professionals is on the rise, and they are often unable to compete.

UTech School of Pharmacy, too, even while insisting that “there is no shortage of pharmacists in Jamaica”, has acknowledged that the lure of foreign jobs has taken a toll on the available skills pool.

Up to last year, Jamaica was populated by 495 pharmacies, most of which are small operators, and some are closing down amid a double whammy of high drug prices and staffing problems.

In Portmore Pines Plaza, for example, two pharmacies that served the community for over a decade shuttered their operations this year. The space remains unrented. Other small operations have also closed down, but larger chains are expanding.

Apex Medical, which operated one of the closed Portmore Pines pharmacies, cited the resignation of the pharmacist as the reason for locking shop.

Large pharmacy chain operator Anne Chang said the fallout in the sector began when the pandemic hit in early 2020.

“I believe COVID was difficult for many pharmacies, and you are seeing the effects now. If you did not make major changes to your operation, you would have been hit hard,” said Chang, CEO of Fontana Limited.

“Additionally, the rising cost of staffing for pharmacists and techs as well as general team members is most likely outpacing revenue growth. It is also a very tight labour market, and getting people is becoming increasingly difficult,” she said in an interview with the Financial Gleaner.

The opposite has happened to Fontana, which is now a listed company that trades on the junior stock market. Since the pandemic, amid expansion, the chain has doubled revenue from $3.7 billion at year ending June 2019 to $7.3 billion for FY2023.

Fontana is currently stretched across six locations in Mandeville, Montego Bay, Kingston, Ocho Rios, and Savanna-la-Mar and is about to open a seventh store in Portmore.

Another chain, Monarch Pharmacy, also set up a store in Portmore recently at the Sovereign Village Plaza.

Businessman Gassan Azan whose Megamart grocery chain also operates a pharmacy unit, said that post-COVID, the drug operation had its own set of challenges “due to rise in costs and sales being stagnant”. However, he was able to buttress drug sales and change the trajectory through a discount scheme under the Pooja Points loyalty programme, he said.

The UTech School of Pharmacy says pharmacists are trained at two institutions: UTech, which runs a four-year bachelor’s degree programme, and the University of the West Indies, which offers a five-year programme. UTech graduated 62 pharmacists in 2021 and 43 last year, while UWI Mona churned out 15 and 14 graduates in the respective years, said Registrar Donovan Stanberry.

However, Stanberry did not comment on the migration trends or whether the demand for graduates was outpacing supply.

UTech, however, acknowledged that Jamaica’s pharmacy operators were competing with foreign countries for talent, naming four countries in particular.

“Yes, they migrate to Canada, USA, and Caribbean [countries] such as Bermuda and The Cayman Islands,” the pharmacy school said via the university’s communications unit.

The Financial Gleaner reached out to several pharmacists who cited difficulties with drug distributors but declined to comment further. The Pharmaceutical Society of Jamaica did not comment.

Chang said some of the attrition in the sector was due to the large number of operators competing against each other in relatively small geographic spaces.

“There are a lot of pharmacies, so people have so much more choice,” she said.

“You are seeing increased costs for almost everything including staffing, utilities, rent, and almost every single aspect. While it is easy for costs to increase, it is not so easy to increase revenues.”

Staffing she added, was the most thorny of the challenges.

“The biggest stress, without a doubt, is staffing. Since COVID, nobody wants to work evenings or weekends. Pharmacists are migrating, too. COVID changed people. They liked working 9-5 and no Sundays and [they] got used to it,” she added.

Compounding the change in work culture is the record levels of unemployment levels, which has pushed the Jamaican economy towards full employment.

“The labour market is so tight, people have many more choices,” Chang remarked

The Jamaica Civil Service Establishment Act puts the annual starting salary for a pharmacist at $5.42 million up to $6.4 million, depending on qualifications and years of experience.

Salaryexpert.com, which aggregates data from information collected directly from employers and anonymous employees, puts the average pharmacist retail gross salary in Jamaica at $3.66 million, plus an average bonus of $82,051. An entry-level retail pharmacist earns $2.54 million on average, while a senior pharmacists earns $4.68 million.

The pharmacy trade depends on imported drugs, and operators have little to no control over the prices of the products they sell. They are also reliant on third-party distributors of over-the-counter medicines and prescription drugs.

“There have been a lot of shortages, and because of the strict requirements for importation, you have to rely heavily on the companies [distributors]. If they do not have it, the time and process to do it yourself are extremely difficult,” Chang said.

Last year, Jamaica imported nearly US$200 million worth of pharma items, most of which emanated out of the United States, followed by India.

Margins have also been squeezed as higher drug prices pressure both pharmacies and consumers. The state-run National Health Fund, which imports around US$20 million worth of drugs per year on average that are sold at subsidised prices on the retail market, reeled off a list of drugs that epitomised the price trend in 2022 in which the cost of drugs increased by double digits, ranging from 22 per cent to 73 per cent.

Giving advice to others in the sector, Chang encouraged the pharmacies under pressure not to give up on their business.

“There are always ways to make changes. You have to listen to how they [consumers] want to interact with you. Improve your offering based on what they want, reduce their wait times, give them options on how to get their meds.”

She also recommended diversifying items sold in-store.

“You cannot only rely on pharmacy items – you have to diversify. People are busy. They do not want to make multiple trips. They want everything in one place. Their expectations are more demanding than in the past, and doing things the same way just does not cut it any more,” Chang said.

“Those unwilling to change with the items will suffer,” she warned.

avia.collinder@gleanerjm.com