Fair trade body should get its act together

WHETHER there is a monopoly or not, there is certainly a free trade problem within the pharmaceutical sector. The Fair Trading Commission (FTC) has done little to help.

But the deeper issues are the fact that the sector is not really “free” given the distortions generated by state subsidisation of healthcare and a concomitant cultural shift away from the local pharmacy around the corner to bigger, flashier chains capable of providing cheaper prices.

Pumped into the FTC over the last five years has been $11.4 million. What have taxpayers got for it? Disclosures at a parliamentary committee on December 2 suggest not much.

Painted was a picture of an organisation loath to weigh in on matters before it. A 2024 complaint by an entity called the Private Pharmacy Retail Business Association alleging a drug sector monopoly was deemed not complaint at all; the association was told to resubmit its documents with a wider set of materials. Meanwhile, FTC executive director Bevan Narinesingh this week revealed the commission is reluctant to act in the absence of a board.

Putting aside for the moment the merits of the association’s complaint, the simple failure of the FTC to treat with this issue in a timely manner does not inspire confidence. Is this the body that’s supposed to guard us from unscrupulous businesses?

To compare what’s written on the FTC website with its practice in real life is to encounter a huge disconnect between its ideals and its activities. Under a section headed “Price-Fixing in the Pharmaceutical Industry,” it describes the importance of steps taken to address this issue in the US. Yet, when it comes to the local drug sector, it slow-walks.

The FTC’s failure to weigh in one way or another has left room for this matter to become a political football. The Prime Minister has taken it up, much as she has taken up the forex issue. In May, Ms Persad-Bissessar spoke of a forex “cartel.” Months later, Central Bank governor Larry Howai said there was no evidence. Now, the PM rails against a monopoly, which she suggests was left in place by the PNM and its “one percent” friends.

But if there is a monopoly in the sector, that is because of economies of scale generated by public sector procurement practices tied to hospitals. In a small country such as ours, an enormous chunk of pharmaceuticals is destined for free clinics and healthcare centres. The remaining private sector portion of the market is too small for foreign drug manufacturers to enter directly, leading to a structural imbalance whereby those distributors that win state contracts dominate. Complicating this seeming advantage, however, are delays by the state in paying suppliers.

Also a complicating factor is the suggestion that monopolistic firms are offering cheaper drugs like Panadol.

Aren’t monopolies supposed to be bad because they drive prices up?

Such nuances would be revealed if regulators like the FTC actually did their work by providing timely data and analysis.