Governor weighs temporary tax relief to keep critical medications within reach as federal pricing changes squeeze local pharmacies
U.S. VIRGIN ISLANDS — Governor Albert Bryan Jr. announced today that his administration is actively evaluating emergency executive action to provide targeted tax relief on certain high-cost prescription medications in response to recent federal pricing changes that are placing unprecedented financial strain on pharmacies across the Territory.
The governor is considering invoking emergency authority to temporarily waive excise taxes, gross receipts taxes, and certain customs related costs on a limited set of prescription drugs identified under the Medicare Maximum Fair Price program.
“While federal efforts to reduce drug prices are well intentioned, they are being implemented using a mainland cost structure that does not reflect the realities of operating in the Virgin Islands,” Governor Bryan said. “Our pharmacies are now being forced into a position where dispensing certain lifesaving medications results in a financial loss. That is simply not sustainable.”
The governor’s review follows mounting concerns from local pharmacies that recent Medicare Part D reimbursement changes are not keeping pace with the actual cost of delivering medications in the Territory.
Unlike mainland providers, Virgin Islands pharmacies must absorb additional costs, including shipping, customs duties, excise taxes, and gross receipts taxes, none of which are factored into federal reimbursement formulas.
Preliminary data provided to Government House shows that pharmacies are experiencing dramatically reduced margins on commonly prescribed medications used to treat diabetes, heart disease, and other chronic conditions. In some cases, once local taxes and operating costs are applied, pharmacies are effectively dispensing medications at a loss.
“This is not about businesses. It is about patients,” the governor said. “If pharmacies cannot afford to stock and dispense these medications, then our seniors, our diabetic patients, and those living with chronic illnesses will face real barriers to care. That leads to worse health outcomes and higher long-term costs for everyone.”
Governor Bryan noted that the administration is also engaging federal partners and regional stakeholders to advocate for long term structural adjustments, including reimbursement models that account for the unique geographic and economic realities of U.S. territories.
The proposed executive action, if implemented, would be targeted and temporary and would focus only on a defined list of medications most affected by federal pricing changes. It would be paired with ongoing efforts to work with Congress and federal agencies to secure permanent solutions.
“We have worked hard to stabilize our economy, grow our revenues, and restore trust in government,” Bryan said. “We will not allow an unintended policy consequence to undermine access to health care in this Territory. If action is required, we will act decisively and responsibly.”
The administration is expected to make a final determination in the coming days following consultations with health care providers, pharmacies, and fiscal officials.
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