JPA suspends transactions with insurance companies in breach of contract

AMMAN — The Jordan Pharmacists Association (JPA) issued a statement on Tuesday urging pharmacies to suspend transactions with insurance companies that fail to abide by contractural terms issued by the association organising the relationship between both parties. 

Speaking with The Jordan Times, the secretary of the association, Salah Qindeel, said that disagreements arose after the JPA’s board adopted amendments to contractual terms, which include reducing the monthly percentage that insurance companies obtain from pharmacies from 6 to 2 per cent as of April 1, 2023. 

The JPA statement directed all pharmacies across the Kingdom not to accept insurance forms issued by a local insurance company which refused to abide by the new amendments. 

Pharmacies that do not follow this decision are subject to legal liability in accordance with the provisions of Article 55 of the the JPA Law for the year 1972, which includes paying a fine ranging from JD50 to JD2,000, among other disciplinary sanctions, it stated. 

On Wednesday, the Jordan Insurance Federation (JIF) held a meeting with the general managers and chief executives of 19 out of 20 insurance companies operating in the Kingdom to discuss the repercussions of the decision.

In a statement issued following this meeting, the JIF described the association’s decision as “one-sided”.

However, the association pointed out that according to Article 43 of the JPA Law for the year 1972, the board’s terms of reference include all matters related to the practice of the profession, including setting the contractual terms organising the relationship between pharmacies and insurance companies. 

The Jordan Times spoke with a number of pharmacists who unanimously supported the association’s decision. 

Husni, a pharmacist who preferred to be identified by his first name only, noted that the percentage deducted by insurance companies from pharmacies is “very high”.

Pharmacist Baraa Abu Omar agreed with Husni, noting that there’s a need to reorganise the relationship between pharmacies and insurance companies to arrive at a “fair” agreement. 

The federation’s statement said that all insurance companies will cease doing business with any pharmacy that refuses to accept insurance forms from companies that don’t sign the new amendments. 

The insurance federation also intends to take legal action against the association, as well as the pharmacies, for “any pecuniary or moral damages to insurance companies or insured persons”.