By Nathan Gill and James Attwood
March 27 (Bloomberg) -- Chileans stormed pharmacies and the government pledged a crackdown after the country’s second-biggest drugstore chain said it joined with rivals to raise prices of life-saving medicine.
Crowds gathered outside pharmacies in downtown Santiago, waving placards and shouting their opposition to high prices, according to images aired by Television Nacional. Yesterday, protesters wearing black masks spray-painted “Down with high prices” on another store and clashed with riot police.
“I never imagined that there were people like this,” said Gladys Sanhueza, 67, outside a drugstore in Santiago. “It can’t be possible that poor people are dying so that rich people can make more money.”
Chilean President Michelle Bachelet, echoing criticism by other political leaders, said it was “shameful” for drugstores to take advantage of consumers during hard times.
“This impacts thousands of Chileans at a time of economic crisis, especially poor families,” Bachelet, a medical doctor and former health minister, said today during a speech. “My government will not accept unscrupulous commercial practices on any level.”
Outrage over drug prices has dominated news coverage and radio talk shows since March 24, when Farmacias Ahumada SA, known as Fasa, the country’s second-biggest drugstore chain, said it joined with rivals to raise prices on 222 medications.
Jorge Seleme, president of the Santiago-based National Consumer Association advocacy group, said his group is planning a class-action lawsuit to seek compensation for people who paid inflated prices for medicine.
“It’s more than a crime, it’s an assault on public confidence,” said Seleme, who said that as a diabetic he has also been hit by price increases. “Sick people don’t buy because they want to, they buy because they have to.”
Santiago-based Fasa said March 24 that it agreed with regulators to pay $1 million in the case involving products sold from November 2007 to March 2008.
The two other drug store chains regulators targeted, Farmacias Salcobrand SA and Farmacias Cruz Verde SA, denied fixing prices, according to a statement published on Chile’s economic public prosecutor’s Web site.
Fasa shares have fallen 11 percent this week to the lowest price in eight years in Santiago trading.