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Walgreens Considers Appealing U.S. Court Ruling

Pharmacy chain still challenging local Health Department’s Certificate of Need & Convenience requirement, but remains committed to island


October 23, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Walgreens Puerto Rico might appeal last month’s ruling by the U.S. District Court for Puerto Rico upholding the validity of the Certificate of Need & Convenience (CNC) required by the local Health Department to open a new pharmacy.

Hector Reichard, legal counsel for Walgreens, said an appeal is under review. In the meantime, the company has filed notice with the First Circuit Court of Appeals in Boston. Walgreens has 30 days from the date of filing, Oct. 8, to make a decision.

The local Health Department requires CNCs not only of pharmacies but also of hospitals, hospices, rehabilitation centers, outpatient surgery centers, and other medical services.

Edwin Rodriguez, marketing vice president of Walgreens Puerto Rico, considers the CNC requirement the greatest obstacle to the growth of the pharmacy industry on the island. Moreover, he says the Health Department is inconsistent about granting the certificates so nobody knows what criteria the agency uses.

"It is important that authorities and pertinent entities recognize that the CNC requirement limits the access of consumers to more service options," said Rodriguez. In an earlier interview, Rodriguez told CARIBBEAN BUSINESS the demand for medicines is outpacing the supply of pharmacies on the island (CB Sept. 18). In the decade between 1993 and 2003, the number of pharmacies grew by only 1.6% despite a rise in demand because of the Health Reform, which has made private healthcare accessible to 1.6 million people, and the aging of the island’s population.

CNC supporters are mostly independent, family-owned pharmacies trying to hold their own against the larger chains. They argue the CNC is necessary to ensure health services don’t overlap and the population has adequate access to those services.

Rodriguez said the cost of fighting the Health Department in the U.S. District Court has been high. The suit was filed in 2000, the year the company celebrated its 40th anniversary with the promise of investing $400 million on the island over the next four years. Rodriguez said Walgreens remains committed to Puerto Rico, where the chain operates 60 stores (five of which don’t have pharmacies), but the situation is difficult.

This Caribbean Business article appears courtesy of Casiano Communications.
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