Ayala confident on closing St. Joseph deal

The Ayala group’s health-care unit is confident that it will be able to close a deal in June to acquire a significant stake in Northern Luzon drugstore chain St. Joseph Drug despite the Philippine Competition Commission (PCC) flagging it for “potential competition concerns.”

AC Health president and CEO Paolo Borromeo told the Inquirer that he was “not worried” about the PCC’s finding in the first phase of its review, especially since the deal involved “small” market shares.

“These are small market shares in an industry that has dominant players,” Borromeo said.

The PCC last week said its initial findings had shown that the proposed transaction between the Zobel family’s AHCHI Pharma Ventures Inc., which operates Generika Drugstore, and St. Joseph operator Joleco Resources “pointed to potential competition concerns.”

Apart from Generika, AHCHI also operates pharmaceutical importation and distribution units IE Medica and MedEthix.

The agency is set to conduct the second phase of its review, which will entail a “more detailed and extensive assessment” on whether the acquisition may lead to a “substantial lessening of competition in the relevant markets.”

Head of HCCH’s Medical Advisory Board Dr. Conrado Gabriel Lorenzo III, head of HCCH’s Department of Radiation Oncology Dr. Gaudencio Vega, AC Health president and CEO Paolo Borromeo, Healthway Medical Network president and CEO Jaime Ysmael, HCCH medical director and head of HCCH’s Colorectal Center of Excellence Dr. Manuel Francisco Roxas, and head of HCCH’s Head and Neck Center of Excellence Dr. Daniel Alonzo.

AC Health plans on acquiring a 49-percent stake in Joleco Resources in a bid to provide affordable medicine to more Filipinos.

St. Joseph currently has 112 stores, all in northern Luzon, while Generika—also known for its more affordable medicine—has 750.

According to Borromeo, they plan on further expanding St. Joseph’s footprint in northern Luzon before gradually moving closer to Metro Manila by opening more stores in Central Luzon.

The 65-year-old drugstore chain, established by pharmacist Jose “Pepe” Cruz and his wife Leila Lagman, presently does not have any stores in the capital, where AC Health seeks to eventually establish St. Joseph stores.

Borromeo noted that they aimed to grow their drugstore network to 1,000 in three years through Generika and St. Joseph.

“We’ll continue growing both St. Joseph and Generika. Generika is [present] nationwide so we still have a long way to go there and encourage more franchisees,” Borromeo said.