Leo Pharma Research 8

Republic of the Philippines
Congress of the Philippines

Metro Manila
Fourteenth Congress
First Regular Session
Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand seven.
Republic Act No. 9502 June 6, 2008

Amending RA8293, RA6675, RA5921
AN ACT PROVIDING FOR CHEAPER AND QUALITY MEDICINES, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 8293 OR THE INTELLECTUAL PROPERTY CODE, REPUBLIC ACT NO. 6675 OR THE
GENERICS ACT OF 1988, AND REPUBLIC ACT NO. 5921 OR THE PHARMACY LAW, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
CHAPTER I
GENERAL PROVISIONS
Section 1. Short Title. - This Act shall be known as the "Universally Accessible Cheaper and Quality Medicines Act of 2008".
SEC. 2. Declaration of Policy. - It is the policy of the State to protect public health and, when the public interest or
circumstances of extreme urgency so require, it shall adopt appropriate measures to promote and ensure access to affordable
quality drugs and medicines for all.
Pursuant to the attainment of this general policy, an effective competition policy in the supply and demand of quality affordable
drugs and medicines is recognized by the State as a primary instrument. In the event that full competition is not effective, the
State recognizes as a reserve instrument the regulation of prices of drugs and medicines, with clear accountability by the
implementing authority as mandated in this Act, as one of the means to also promote and ensure access to quality affordable
medicines.
SEC. 3. Construction in Favor of Protection of Public Health. - All doubts in the implementation and interpretation of the
provisions of this Act, including its implementing rules and regulations, shall be resolved in favor of protecting public health.
SEC. 4. Definition of Terms. - For purposes of this Act, the following terms are to mean as follows:
(a) "Compulsory License" is a license issued by the Director General of the Intellectual Property Office to exploit a patented
invention without the permission of the patent holder, either by manufacture or through parallel importation;
(b) "Drug outlet" refers to drugstores, pharmacies, and any other business establishments which sell drugs and medicines;
(c) "Drugs and medicines" refers to any chemical compound or biological substance, other than food, intended for use in the
treatment, prevention or diagnosis of disease in humans or animals, including but not limited to:
(1) any article recognized in the official United States Pharmacopoeia-National Formulary (USP-NF), official Homeopathic
Pharmacopoeia of the United States, Philippine Pharmacopoeia, Philippine National Drug Formulary, British Pharmacopoeia,
European Pharmacopoeia, Japanese Pharmacopoeia, Indian Pharmacopoeia, any national compendium or any supplement to
any of them;
(2) any article intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in humans or animals;
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(3) any article other than food intended to affect the structure or any function of the human body or animals;
(4) any article intended for use as a component of any articles specified in clauses (1), (2), and (3) not including devices or their
components, parts, or accessories; and
(5) herbal and/or traditional drugs which are articles of plant or animal origin used in folk medicine which are:
(i) recognized in the Philippine National Drug Formulary;
(ii) intended for use in the treatment or cure or mitigation of disease symptoms, injury or body defects in humans;
(iii) other than food, intended to affect the structure or any function of the human body;
(iv) in finished or ready-to-use dosage form; and
(v) intended for use as a component of any of the articles specified in clauses (i), (ii), (iii), and (iv);
(d) "Essential drugs list or national drug formulary" refers to a list of drugs prepared and periodically updated by the
Department of Health on the basis of health conditions obtaining in the Philippines as well as on internationally accepted
criteria;
(e) "Importer" refers to any establishment that imports raw materials, active ingredients and finished products for its own use or
for distribution to other drug establishments or outlets;
(f) "Manufacture" includes any process or part of a process for making, altering, finishing, packing, labeling, breaking or
otherwise treating or adapting any drug with a view to its sale and distribution, but does not include the compounding or
dispensing of any drug in the ordinary course of retail business;
(g) "Manufacturer" refers to any establishment engaged in the operations involved in the production of a drug with the end view
of storage, distribution, or sale of the product;
(h) "Multisource pharmaceutical products" refers to pharmaceutically equivalent or pharmaceutically alternative products that
may or may not be therapeutically equivalent. Multisource pharmaceutical products that are therapeutically equivalent are
interchangeable;
(i) "Retailer" refers to a licensed establishment carrying on the retail business of sale of drugs and medicines to customers;
(j) "Trader" refers to any licensed establishment which is a registered owner of a drug product that procures the materials and
packaging components, and provides the production monographs, quality control standards and procedures, but subcontracts the
manufacture of such products to a licensed manufacturer;
(k) "TRIPS Agreement" or Agreement on Trade-Related Aspects of Intellectual Property Rights refers to the international
agreement administered by the WTO that sets down minimum standards for many forms of intellectual property regulation; and
(l) "Wholesaler" refers to a licensed establishment or drug outlet who acts as merchant, broker or agent, who sells or distributes
for resale or wholesale drugs and medicines.
CHAPTER 2
AMENDMENTS TO REPUBLIC ACT NO. 8293, OTHERWISE KNOWN AS THE INTELLECTUAL PROPERTY
CODE OF THE PHILIPPINES
SEC. 5. Section 22 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, is hereby
amended to read as follows:
"SEC. 22. Non-Patentable Inventions. - The following shall be excluded from patent protection:
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"22.1. Discoveries, scientific theories and mathematical methods, and in the case of drugs and medicines, the mere discovery of
a new form or new property of a known substance which does not result in the enhancement of the known efficacy of that
substance, or the mere discovery of any new property or new use for a known substance, or the mere use of a known process
unless such known process results in a new product that employs at least one new reactant.
"For the purpose of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of
isomers, complexes, combinations, and other derivatives of a known substance shall be considered to be the same substance,
unless they differ significantly in properties with regard to efficacy;
"22.2. x x x;
"22.3. x x x;
"22.4. x x x;
"22.5. x x x; and
"22.6. x x x."
"SEC. 26. Inventive Step. - 26.1. An invention involves an inventive step if, having regard to prior art, it is not obvious to a
person skilled in the art at the time of the filing date or priority date of the application claiming the invention. (n)
"26.2. In the case of drugs and medicines, there is no inventive step if the invention results from the mere discovery of a new
form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance,
or the mere discovery of any new property or new use for a known substance, or the mere use of a known process unless such
known process results in a new product that employs at least one new reactant."
"SEC. 72. Limitations of Patent Rights. - The owner of a patent has no right to prevent third parties from performing, without
his authorization, the acts referred to in Section 71 hereof in the following circumstances:
"72.1. Using a patented product which has been put on the market in the Philippines by the owner of the product, or with his
express consent, insofar as such use is performed after that product has been so put on the said market: Provided, That, with
regard to drugs and medicines, the limitation on patent rights
shall apply after a drug or medicine has been introduced in the Philippines or anywhere else in the world by the patent owner,
or by any party authorized to use the invention: Provided, further, That the right to import the drugs and medicines
contemplated in this section shall be available to any government agency or any private third party;
"72.2. Where the act is done privately and on a non-commercial scale or for a non-commercial purpose: Provided, That it does
not significantly prejudice the economic interests of the owner of the patent;
"72.3. Where the act consists of making or using exclusively for experimental use of the invention for scientific purposes or
educational purposes and such other activities directly related to such scientific or educational experimental use;
"72.4. In the case of drugs and medicines, where the act includes testing, using, making or selling the invention including any
data related thereto, solely for purposes reasonably related to the development and submission of information and issuance of
approvals by government regulatory agencies required under any law of the Philippines or of another country that regulates the
manufacture, construction, use or sale of any product: Provided, That, in order to protect the data submitted by the original
patent holder from unfair commercial use provided in Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS Agreement), the Intellectual Property Office, in consultation with the appropriate government agencies,
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shall issue the appropriate rules and regulations necessary therein not later than one hundred twenty (120) days after the
enactment of this law;
"72.5. Where the act consists of the preparation for individual cases, in a pharmacy
or by a medical professional, of a medicine in accordance with a medical
shall apply after a drug or medicine has been introduced in the Philippines or anywhere else in the world by the patent owner,
or by any party authorized to use the invention: Provided, further, That the right to import the drugs and medicines
contemplated in this section shall be available to any government agency or any private third party;
"72.2. Where the act is done privately and on a non-commercial scale or for a non-commercial purpose: Provided, That it does
not significantly prejudice the economic interests of the owner of the patent;
"72.3. Where the act consists of making or using exclusively for experimental use of the invention for scientific purposes or
educational purposes and such other activities directly related to such scientific or educational experimental use;
"72.4. In the case of drugs and medicines, where the act includes testing, using, making or selling the invention including any
data related thereto, solely for purposes reasonably related to the development and submission of information and issuance of
approvals by government regulatory agencies required under any law of the Philippines or of another country that regulates the
manufacture, construction, use or sale of any product: Provided, That, in order to protect the data submitted by the original
patent holder from unfair commercial use provided in Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS Agreement), the Intellectual Property Office, in consultation with the appropriate government agencies,
shall issue the appropriate rules and regulations necessary therein not later than one hundred twenty (120) days after the
enactment of this law;
"72.5. Where the act consists of the preparation for individual cases, in a pharmacy or by a medical professional, of a medicine
in accordance with a medical
"74.3. All cases arising from the implementation of this provision shall be cognizable by courts with appropriate jurisdiction
provided by law.
"No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or
such other provisional remedies that will prevent its immediate execution.
"74.4. The Intellectual Property Office (IPO), in consultation with the appropriate government agencies, shall issue the
appropriate implementing rules and regulations for the use or exploitation of patented inventions as contemplated in this section
within one hundred twenty (120) days after the effectivity of this law."
SEC. 9. Section 76.1 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, is hereby
"SEC. 76. Civil Action for Infringement. - 76.1. The making, using, offering for sale, selling, or importing a patented product or
a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of
the patentee constitutes patent infringement: Provided, That, this shall not apply to instances covered by Sections 72.1 and 72.4
(Limitations of Patent Rights); Section 74 (Use of Invention by Government); Section 93.6 (Compulsory Licensing); and
Section 93-A (Procedures on Issuance of a Special Compulsory License under the TRIPS Agreement) of this Code.
"76.2. x x x;
"76.3. x x x;
"76.4. x x x;
"76.5. x x x; and
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"76.6. x x x."
"SEC. 93. Grounds for Compulsory Licensing. - The Director General of the Intellectual Property Office may grant a license to
exploit a patented invention, even without the agreement of the patent owner, in favor of any person who has shown his
capability to exploit the invention, under any of the following circumstances:
"93.1. National emergency or other circumstances of extreme urgency;
"93.2. Where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the
national economy as determined by the appropriate agency of the Government, so requires; or
"93.3. Where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his
licensee is anti-competitive; or
"93.4. In case of public non-commercial use of the patent by the patentee, without satisfactory reason;
"93.5. If the patented invention is not being worked in the Philippines on a commercial scale, although capable of being
worked, without satisfactory reason: Provided, That the importation of the patented article shall constitute working or using the
patent; (Secs. 34, 34-A, 34-B, R.A. No. 165a) and
"93.6. Where the demand for patented drugs and medicines is not being met to an adequate extent and on reasonable terms, as
determined by the Secretary of the Department of Health."
SEC. 11. A new Section 93-A is hereby inserted after Section 93 of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, to read as follows:
"SEC. 93-A. Procedures on Issuance of a Special Compulsory License under the TRIPS Agreement. - 93-A.1. The Director
General of the Intellectual Property Office, upon the written recommendation of the Secretary of the Department of Health,
shall, upon filing of a petition, grant a special compulsory license for the importation of patented drugs and medicines. The
special compulsory license for the importation contemplated under this provision shall be an additional special alternative
procedure to ensure access to quality affordable medicines and shall be primarily for domestic consumption: Provided, That
adequate remuneration shall be paid to the patent owner either by the exporting or importing country. The compulsory license
shall also contain a provision directing the grantee the license to exercise reasonable measures to prevent the re-exportation of
the products imported under this provision.
"The grant of a special compulsory license under this provision shall be an exception to Sections 100.4 and 100.6 of Republic
Act No. 8293 and shall be immediately executory.
"No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or
such other provisional remedies that will prevent the grant of the special compulsory license.
"93-A.2. A compulsory license shall also be available for the manufacture and export of drugs and medicines to any country
having insufficient or no manufacturing capacity in the pharmaceutical sector to address public health problems: Provided,
That, a compulsory license has been granted by such country or such country has, by notification or otherwise, allowed
importation into its jurisdiction of the patented drugs and medicines from the Philippines in compliance with the TRIPS
Agreement.
"93-A.3. The right to grant a special compulsory license under this section shall not limit or prejudice the rights, obligations and
flexibilities provided under the TRIPS Agreement and under Philippine laws, particularly Section 72.1 and Section 74 of the
Intellectual Property Code, as amended under this Act. It is also without prejudice to the extent to which drugs and medicines
produced under a compulsory license can be exported as allowed in the TRIPS Agreement and applicable laws."
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"SEC. 94. Period for Filing a Petition for a Compulsory License. - 94.1. A compulsory license may not be applied for on the
ground stated in Subsection 93.5 before the expiration of a period of four (4) years from the date of filing of the application or
three (3) years from the date of the patent whichever period expires last.
"94.2. A compulsory license which is applied for on any of the grounds stated in Subsections 93.2, 93.3, 93.4, and 93.6 and
Section 97 may be applied for at any time after the grant of the patent. (Sec. 34(1), R. A. No. 165)"
"SEC. 95. Requirement to Obtain a License on Reasonable Commercial Terms. - 95.1. The license will only be granted after
the petitioner has made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions
but such efforts have not been successful within a reasonable period of time.
"95.2. The requirement under Subsection 95.1 shall not apply in any of the following cases:
"(a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or administrative process to
be anti-competitive;
"(b) In situations of national emergency or other circumstances of extreme urgency;
"(c) In cases of public non-commercial use; and
"(d) In cases where the demand for the patented drugs and medicines in the Philippines is not being met to an adequate extent
and on reasonable terms, as determined by the Secretary of the Department of Health.
"95.3. In situations of national emergency or other circumstances of extreme urgency, the right holder shall be notified as soon
as reasonably practicable.
"95.4. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or
has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be
informed promptly. (n)
"95.5. Where the demand for the patented drugs and medicines in the Philippines is not being met to an adequate extent and on
reasonable terms, as determined by the Secretary of the Department of Health, the right holder shall be informed promptly."
SEC. 14. Section 147 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, is
hereby amended to read as follows:
"SEC. 147. Rights Conferred. - 147.1. Except in cases of importation of drugs and medicines allowed under Section 72.1 of this
Act and of off-patent drugs and medicines, the owner of a registered mark shall have the exclusive right to prevent all third
parties not having the owner's consent from using in the course of trade identical or similar signs or containers for goods or
services which are identical or similar to those in respect of which the trademark is registered where such use would result in a
likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.
"There shall be no infringement of trademarks or tradenames of imported or sold patented drugs and medicines allowed under
Section 72.1 of this Act, as well as imported or sold off-patent drugs and medicines: Provided, That, said drugs and medicines
bear the registered marks that have not been tampered, unlawfully modified, or infringed upon, under Section 155 of this Code.
"147.2. x x x."
SEC. 15. Section 159 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, is
hereby amended to read as follows:
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"SEC. 159. Limitations to Actions for Infringement. - Notwithstanding any other provision of this Act, the remedies given to
the owner of a right infringed under this Act shall be limited as follows:
"159.1. x x x;
"159.2 x x x;
"159.3 x x x; and
"159.4 There shall be no infringement of trademarks or tradenames of imported or sold drugs and medicines allowed under
Section 72.1 of this Act, as well as imported or sold off-patent drugs and medicines: Provided, That said drugs and medicines
bear the registered marks that have not been tampered, unlawfully modified, or infringed upon as defined under Section 155 of
this Code."
SEC. 16. Implementing Rules and Regulations on Amendments to Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines. - Unless otherwise provided herein, the Intellectual Property Office, in coordination with the
Department of Health and the Bureau of Food and Drugs, shall issue and promulgate, within one hundred twenty (120) days
after the enactment of this Act, the implementing rules and regulations to effectively implement the provisions of this Act that
relate to Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines.
CHAPTER 3
DRUGS AND MEDICINES PRICE REGULATION
SEC. 17. Drugs and Medicines Price Regulation Authority of the President of the Philippines. - The President of the
Philippines, upon recommendation of the Secretary of the Department of Health, shall have the power to impose maximum
retail prices over any or all drugs and medicines as enumerated in Section 23.
The power to impose maximum retail prices over drugs and medicines shall be exercised within such period of time as the
situation may warrant as determined by the President of the Philippines. No court, except the Supreme Court of the Philippines,
shall issue any temporary restraining order or preliminary injunction or preliminary mandatory injunction that will prevent the
immediate execution of the exercise of this power of the President of the Philippines.
SEC. 18. Drugs and Medicines Price Monitoring and Regulation Authority of the Secretary of the Department of Health. -
To implement the policies of this Act under this Chapter, the Secretary of the Department of Health is hereby authorized to
establish and initiate a price monitoring and regulation system for drugs and medicines within one hundred twenty (120) days
after the enactment of this Act. The Secretary of the Department of Health may also create such bodies, consultative councils,
from which advice may be sought in the implementation of a drug or medicine price monitoring and regulation policy. Such
bodies or consultative councils created by the Secretary of the Department of Health shall coordinate its efforts together with
other government agencies.
SEC. 19. Functions and Responsibilities of the Secretary of the Department of Health. - Pursuant to Section 18 of this Act,
the Secretary of the Department of Health shall have the following powers:
(A) Power to Recommend the Maximum Retail Price of Drugs and Medicines Subject to Price Regulation - (1) Upon
application or motu proprio when the public interest so requires, the Secretary of the Department of Health shall have the power
to determine the maximum retail prices of drugs and medicines which shall be recommended to the President of the Philippines
for approval. In order that affordable prices of drugs and medicines from the different manufacturers, importers, traders,
distributors, wholesalers, or retailers shall be made available to the public, the Secretary of the Department of Health, as he/she
may deem fit and after a proper determination, shall have such approved maximum retail prices of drugs and medicines
published;
(2) In recommending the maximum retail price, the Secretary of the Department of Health shall consider the following factors:
(a) Retail prices of drugs and medicines that are subject to regulation in the Philippines and in other countries;
(b) The supply available in the market;
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(c) The cost to the manufacturer, importer, trader, distributor, wholesaler or retailer of the following, but not limited to:
(i) The exchange rate of the peso to the foreign currency with which the drug or any of its component, ingredient or raw
material was paid for;
(ii) Any change in the amortization cost of machinery brought about by any change in the exchange rate of the peso to the
foreign currency with which the machinery was bought through credit facilities;
(iii) Any change in the cost of labor brought about by a change in minimum wage; or
(iv) Any change in the cost of transporting or distributing the medicines to the area of destination;
(d) Such other factors or conditions which will aid in arriving at a just and reasonable maximum price; and
(3) No retailer shall sell drugs and medicines at a retail price exceeding the maximum retail price approved by the President of
the Philippines as provided in Section 17 of this Act: Provided, That, the Secretary of the Department of Health shall
immediately undertake a study on the prevailing prices of drugs and medicines subject to price regulation and provide an initial
list of drugs and medicines, which maximum retail prices he/she shall recommend to the President of the Philippines.
(B) Power to Include Other Drugs and Medicines in the List Subject to Price Regulation - Upon application or motu proprio
when the public interest so requires and after proper determination, the Secretary of the Department of Health may order the
inclusion of drugs and medicines to the list subject of price regulation under Section 23 hereof.
(C) Power to Implement Cost-Containment and Other Measures - (1) The Secretary of the Department of Health shall have the
power to implement the fair price of drugs and medicines for purposes of public health insurance and government procurement
based on the order of the President of the Philippines imposing maximum retail prices; and
(2) The Secretary of the Department of Health shall have the power to implement any other measures that the government may
avail of to effectively reduce the cost of drugs and medicines that shall include, but not limited to, competitive bidding, price
volume negotiations, and other appropriate mechanisms that influence supply, demand and expenditures on drugs and
medicines.
(D) Power to Impose Administrative Fines and Penalties - After due notice and hearing, the Secretary of the Department of
Health shall have the power to impose administrative fines against any person, manufacturer, importer, trader, distributor,
wholesaler, retailer, or any other entity, in such amount as it may deem reasonable, which in no case shall be less than Fifty
thousand pesos (Php50,000.00) nor more than Five million pesos (Php5,000,000.00) for violations of the maximum retail price
approved by the President of the Philippines pursuant to the provisions of this Chapter.
(E) Power to Deputize Government Entities - The Secretary of the Department of Health shall have the power to call upon and
deputize any official, agent, employee, agency, or instrumentality of the national and local government for any assistance that it
may deem necessary to carry out the purposes of this Chapter.
(F) Other Powers Necessary to Implement Provisions of this Chapter - The Secretary of the Department of Health shall exercise
such powers and functions as may be necessary to implement and enforce the provisions of this Chapter of this Act, including
the power to require the production and submission of records, documents, books of account, bills of lading, input documents,
records of purchase and sale, financial statements, and such other documents, information and papers as may be necessary to
enable the Secretary of the Department of Health to carry out its functions, duties, and responsibilities. Accordingly, within
thirty (30) days from the effectivity of this Act and every December 31st of every year thereafter, every manufacturer, importer,
trader, distributor, wholesaler, and retailer of a drug and medicine whether included in or excluded from the list of drugs and
medicines that are subject to price regulation shall furnish the Secretary of the Department of Health a list, containing on the
minimum the corresponding prices and inventory, of all drugs and medicines it manufactures, imports, trades, distributes,
wholesales, or retails, data pertaining to the factors enumerated under Section 19(A)(2), and any and all necessary information
that the Secretary of the Department of Health may require.
SEC. 20. Procedures for Inquiries, Studies, Hearings, Investigations, and Proceedings. - All inquiries, studies, hearings,
investigations and proceedings conducted by the Secretary of the Department of Health shall be governed by the rules adopted
by him/her, and in the conduct thereof shall not be bound by the technical rules of evidence.
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SEC. 21. Effectivity of the Decisions or Orders of the Secretary of the Department of Health. - All decisions or orders of the
Secretary of the Department of Health pursuant to Section 19 Paragraphs (A) Power to Recommend the Maximum Retail Price
of Drugs and Medicines Subject to Price Regulation, (B) Power to Include Other Drugs and Medicines in the List Subject to
Price Regulation, (C) Power to Implement Cost-Containment and Other Measures, (D) Power to Impose Administrative Fines
and Penalties, (E) Power to Deputize Government Entities, or (F) Other Powers Necessary to Implement Provisions of this
Chapter, shall be immediately operative.
SEC. 22. Review of the Decisions or Orders of the Secretary of the Department of Health. - A party adversely affected by a
decision, order or ruling of the Secretary of the Department of Health may, within thirty (30) days from notice of such decision,
order or ruling, or in case of a denial of a motion for reconsideration thereof, within fifteen (15) days after notice of such denial,
file an appeal with the Court of Appeals, which shall have jurisdiction to review such decision, order or ruling.
The filing of a petition for a writ of certiorari or other special remedies in the Supreme Court shall in no case supersede or stay
any decision, order or ruling of the Secretary of the Department of Health, unless the Supreme Court shall so direct, and the
petitioner may be required by the Supreme Court to give bond in such form and of such amount as may be deemed proper.
SEC. 23. List of Drugs and Medicines that are Subject to Price Regulation. - The list of drugs and medicines that are subject
to price regulation shall include, inter alia:
(a) All drugs and medicines indicated for treatment of chronic illnesses and life threatening conditions, such as, but not limited
to, endocrine disorders, e.g., diabetes mellitus; gastrointestinal disorders, e.g., peptic ulcer; urologic disorders, e.g., benign
prostatic hyperplasia (BPH); cardiovascular diseases, e.g., hypertension; pulmonary diseases, e.g., pulmonary tuberculosis
(PTB), asthma; auto-immune diseases, e.g., systemic lupus erythematosus (SLE); skin diseases, e.g., psoriasis; neuro-
psychiatric disorders; other infectious diseases, e.g., human immunodeficiency virus-acquired immune deficiency syndrome
(HIV-AIDS); and other conditions such as organ transplants and neoplasm;
(b) Drugs and medicines indicated for prevention of diseases, e.g., vaccines, immunoglobulin, anti-sera;
(c) Drugs and medicines indicated for prevention of pregnancy, e.g., oral contraceptives;
(d) Anesthetic agents;
(e) Intravenous fluids;
(f) Drugs and medicines that are included in the Philippine National Drug Formulary (PNDF) Essential Drug List; and
(g) All other drugs and medicines which, from time to time, the Secretary of the Department of Health determines to be in need
of price regulation.
SEC. 24. Illegal Acts of Price Manipulation. - Without prejudice to the provisions of existing laws on goods not covered by
this Act, it shall be unlawful for any manufacturer, importer, trader, distributor, wholesaler, retailer, or any person engaged in
any method of disposition of drugs and medicines to engage in acts of price manipulation such as hoarding, profiteering, or
illegal combination or forming cartel, as defined under Section 5 of Republic Act No. 7581, otherwise known as the Price Act,
and all other acts committed in restraint of trade.
SEC. 25. Penalty for Illegal Acts of Price Manipulation. - Any person or entity who commits any act of illegal price
manipulation of any drug and medicine subject to price regulation shall suffer the penalty of imprisonment for a period of not
less than five (5) years nor more than fifteen (15) years or shall be imposed a fine of not less than One hundred thousand pesos
(Php100,000.00) nor more than Ten million pesos (Php10,000,000.00), at the discretion of the court. The court may also order
the suspension or revocation of its license to operate (LTO), professional or business license.
Whenever any act of illegal price manipulation of any drug and medicine subject to price regulation is committed by a juridical
person, its officials or employees, or in case of a foreign corporation or association, its agent or representative in the Philippines
who are responsible for the violation, shall be held liable therefor.
SEC. 26. Display of Maximum Retail Price Fixed and Approved by Order of the President of the Philippines for Drugs and
Medicines Subject to Price Regulation. - (a) Within a reasonable period as may be determined by the Secretary of the
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Department of Health, and: Provided, That it conforms to existing drug product labeling requirements, every manufacturer,
importer, distributor, wholesaler, trader, or retailer of a drug and medicine intended for sale shall display the retail price which
shall not exceed the maximum retail price approved by order of the President of the Philippines. The maximum retail price shall
be printed on the label of the immediate container of the drug and medicine and the minimum pack thereof offered for retail
sale with the words "RETAIL PRICE NOT TO EXCEED" preceding it, and "UNDER DRUG PRICE REGULATION" on a
red strip.
(b) Within a period as may be determined by the Secretary of the Department of Health from time to time, every manufacturer,
importer, or trader shall issue a price list to wholesalers, distributors, retailers and to the Secretary of the Department of Health,
indicating the retail price, the maximum retail price, and such other information as may be required by the Secretary of the
Department of Health.
SEC. 27. Reports from Local Government Units (LGUs) and the Department of Trade and Industry (DTI). - All local
government units and the Department of Trade and Industry shall help ensure the implementation of pricing policies provided
under this Chapter by submitting quarterly price monitoring reports to the Secretary of the Department of Health of drugs and
medicines identified by the latter, and any and all necessary information that the Secretary of the Department of Health may
require.
SEC. 28. Role of the Department of Health (DOH) and the Department of Trade and Industry (DTI). - The Department of
Health and the Department of Trade and Industry shall conduct independent periodic surveys and studies of the selling prices of
all drugs and medicines referred to in Section 23 of this Act all over the country as well as their share or effect on the family
income of the different economic groups in the country for purposes of serving as data base for government efforts to promote
access to more affordable medicines, as well as evaluating the effectivity of the measures undertaken to promote access to more
affordable medicines. The DTI shall always officially provide the Secretary of the Department of Health copies of these
independent reports.
SEC. 29. Rules and Regulations. - The Secretary of the Department of Health, in consultation with the Department of Trade
and Industry, the Congressional Oversight Committee and other appropriate government agencies, shall, within one hundred
twenty (120) days from the effectivity of this Act, promulgate the rules and regulations necessary to effectively implement the
provisions of this Chapter.
SEC. 30. Reportorial and Public Notice Requirements. - (a) The Secretary of the Department of Health shall submit a bi-
annual Monitoring Report of its performance on the implementation of this Act to the Office of the President. This report
submitted to the Office of the President shall be published in a newspaper of general circulation within thirty (30) days upon
submission.
(b) It shall also submit annually a report of its performance on the implementation of this Act to both Houses of Congress,
within fifteen (15) days from the opening of the regular session. It shall also regularly report and comply immediately to any
order of the Congressional Oversight Committee.
(c) The order of the President of the Philippines imposing maximum retail prices on drugs and medicines, including the
conditions implementing it, shall be published within fifteen (15) days from issuance in at least two (2) newspapers of general
circulation. All wholesalers, manufacturers, distributors, importers, or traders shall have a copy of the order of the President of
the Philippines and provide the same to their clients and customers for every transaction.
(d) All drug outlets are required to post in a conspicuous area within its premises a clear copy of the order of the President of
the Philippines which shall be easily accessible to the consuming public and updated regularly as the situation may warrant.
CHAPTER 4
STRENGTHENING OF THE BUREAU OF FOOD AND DRUGS
SEC. 31. Strengthening of the Bureau of Food and Drugs (BFAD). - (a) For a more effective and expeditious implementation
of this Act, the Director or head of the Bureau of Food and Drugs shall be authorized to retain, without need of a separate
approval from any government agency, and subject only to existing accounting and auditing rules and regulations, all the fees,
fines, royalties and other charges, collected by the Bureau of Food and Drugs under this Act and other laws that it is mandated
to administer based on the immediately prior year of operations, for use in its operations, like upgrading of its facilities,
equipment outlay, human resource development and expansion, and the acquisition of the appropriate office space, among
10
others, to improve the delivery of its services to the public. This amount, which shall be in addition to the annual budget of the
Bureau of Food and Drugs, shall be deposited and maintained in a separate account or fund, which may be used or disbursed
directly by the Director or head.
(b) After five (5) years from the coming into force of this Act, the Director or head of the Bureau of Food and Drugs shall,
subject to the approval of the Secretary of the Department of Health, determine if the fees and charges, mentioned in Subsection
(a) hereof, are sufficient to meet its budgetary requirements. If so, it shall retain all the fees and charges it shall collect under the
same conditions indicated in said Subsection (a) but shall forthwith, cease to receive any funds from the annual budget of the
National Government; if not, the provisions of Subsection (a) shall continue to apply until such time when the Director or head
of the Bureau of Food and Drugs, subject to the approval of the Secretary of the Department of Health, certifies that the
abovestated fees and charges the Bureau of Food and Drugs shall collect are enough to fund its operations.
(c) The Bureau of Food and Drugs shall submit a yearly performance report to the Quality Affordable Medicines Oversight
Committee, as provided in Section 45 of this Act. The report shall itemize the use of such retained funds in the past year up to
the present and the budgeted use of the same in the succeeding periods.
SEC. 32. Quality Assurance of Drugs. - The Bureau of Food and Drugs shall take the necessary steps to ensure that all drugs
authorized for marketing in the country shall conform to international standards for the content, purity and quality of
pharmaceutical products as established in the International Pharmacopoeia: Provided, That imported products in finished
dosage forms, should be certified under the World Health Organization (WHO) certification scheme on the quality of
pharmaceutical products moving in international commerce: Provided, further, That the registration for multisource
pharmaceutical products should conform to the WHO guidelines on registration requirements to establish interchangeability.
CHAPTER 5
NON-DISCRIMINATORY CLAUSE
SEC. 33. Non-Discriminatory Clause. - It shall be unlawful for any retail drug outlet to refuse to carry either by sale or by
consignment, or offer for sale drugs and medicines brought into the country, as allowed under Section 7 of this Act which
amends Section 72.1 of the Intellectual Property Code of the Philippines or Republic Act No. 8293, by the government or
authorized third party which have been previously approved for distribution or sale by the Bureau of Food and Drugs. For this
purpose, the said products shall be displayed with equal prominence as all other products sold in the establishment.
SEC. 34. Refusal to Sell Drugs and Medicines. - No manufacturer, importer, trader, distributor, wholesaler shall withhold
from sale or refuse to sell to a wholesaler or retailer any drug or medicine without good and sufficient reasons.
SEC. 35. Penalties. - Any person or entity who shall refuse to carry or sell drugs and medicines pursuant to the provisions of
this Chapter shall be punished with a fine of not less than One hundred thousand pesos (Php100,000.00) but not more than Five
hundred thousand pesos (Php500,000.00), at the discretion of the court. For the succeeding offense, the penalties shall not be
less than Five hundred thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00), at the
discretion of the court, and suspension or revocation of its license to operate (LTO), business or professional license, as the case
may be.
SEC. 36. Implementing Rules and Regulations on the Non-Discriminatory Clause. - Within one hundred twenty (120) days
from the effectivity of this Act, the Department of Health, in consultation with the Department of Trade and Industry, shall
promulgate the rules and regulations necessary to effectively implement the provisions of this Chapter.
CHAPTER 6
AMENDMENTS TO REPUBLIC ACT NO. 6675, OTHERWISE KNOWN AS THE GENERICS ACT OF 1988
SEC. 37. Section 5 of Republic Act No. 6675, otherwise known as the Generics Act of 1988, is hereby amended to read as
follows:
"SEC. 5. Posting and Publication. - The Department of Health shall publish annually in acceptable means of public
dissemination in at least two (2) newspapers of general circulation in the Philippines the generic names, and the corresponding
brand names under which they are marketed, of all drugs and medicines available in the Philippines."
11
follows:
"SEC. 6. Who Shall Use Generic Terminology. - (a) All government health agencies and their personnel as well as other
government agencies shall use generic terminology or generic names in all transactions related to purchasing, prescribing,
dispensing and administering of drugs and medicines.
"(b) All medical, dental and veterinary practitioners, including private practitioners, shall write prescriptions using the generic
name. The brand name may be included if so desired.
"(c) Any organization or company involved in the manufacture, importation, repacking, marketing and/or distribution of drugs
and medicines shall indicate prominently the generic name of the product. In the case of brand name products, the generic name
shall appear prominently and immediately above the brand name in all product labels as well as in advertising and other
promotional materials.
"(d) Drug outlets, including drugstores, hospital and non-hospital pharmacies and nontraditional outlets such as supermarkets
and stores, shall inform any buyer about any and all other drug products having the same generic name, together with their
corresponding prices so that the buyer may adequately exercise his option. Within one (1) year after the approval of this Act,
the drug outlets referred to herein shall post in conspicuous places in their establishments a list of drug products with the same
generic name and their corresponding prices.
"(e) There shall appear prominently on the label of a generic drug the following statement: this product has the same therapeutic
efficacy as any other generic product of the same name. Signed: BFAD."
follows:
"SEC. 8. Required Production. - Subject to the rules and regulations promulgated by the Secretary of Health, every drug
manufacturing company operating in the Philippines shall be required to produce, distribute and make widely available to the
general public an unbranded generic counterpart of their branded product."
follows:
"SEC. 11. Education Drive. - The Department of Health jointly with the Philippine Information Agency and the Department of
the Interior and Local Government shall conduct a continuous information campaign for the public and a continuing education
and training for the medical and allied medical professions on drugs with generic names as an alternative of equal efficacy to
the more expensive brand name drugs. Such educational campaign shall include information on the illnesses or symptoms
which each generically named drug is supposed to cure or alleviate, as well as in contraindications. The Department of Health
with the assistance of the Department of the Interior and Local Government and the Philippine Information Agency shall
monitor the progress of the education drive, and shall submit regular reports to Congress."
follows:
"SEC. 12. Penalty. - (A) Any person who shall violate Section 6(a) or 6(b) of this Act shall suffer the penalty graduated
hereunder, viz:
"(a) for the first conviction, he shall suffer the penalty of reprimand which shall be officially recorded in the appropriate books
of the Professional Regulation Commission.
"(b) for the second conviction, the penalty of fine in the amount of not less than Ten thousand pesos (Php10,000.00) but not
exceeding Twenty-five thousand pesos (Php25,000.00), at the discretion of the court.
"(c) for the third conviction, the penalty of fine in the amount of not less than Twenty-five thousand pesos (Php25,000.00) but
not exceeding Fifty thousand pesos (Php50,000.00) and suspension of his license to practice his profession for sixty (60) days at
the discretion of the court.
12
"(d) for the fourth and subsequent convictions, the penalty of fine of not less than One hundred thousand pesos (Php100,000.00)
and suspension of his license to practice his profession for one (1) year or longer at the discretion of the court.
"(B) Any juridical person who violates Sections 6(c), 6(d), 7 or 8 shall suffer the penalty of a fine of not less than One hundred
thousand pesos (Php100,000.00) and suspension or revocation of license to operate such drug establishment or drug outlet at
the discretion of the court: Provided, That its officers directly responsible for the violation shall suffer the penalty of fine of at
least Forty thousand pesos (Php40,000.00) and suspension or revocation of license to practice profession, if applicable, and by
imprisonment of not less than six (6) months nor more than one (1) year or both fine and imprisonment at the discretion of the
court: and, a list of drug products with the same generic name and their corresponding prices.
Provided, further, That if the guilty party is an alien, he shall be ipso facto deported after service of sentence without need of
further proceedings.
"(C) The Secretary of Health shall have the authority to impose administrative sanctions such as suspension or cancellation of
license to operate or recommend suspension of license to practice profession to the Professional Regulation Commission as the
case may be for the violation of this Act.
"The administrative sanctions that shall be imposed by the Secretary of the Department of Health shall be in a graduated
manner in accordance with Section 12.A.
"An administrative case may be instituted independently from the criminal case: Provided, That, the dismissal of the criminal
case or the withdrawal of the same shall in no instance be a ground for the dismissal of the administrative case."
SEC. 42. Implementing Rules and Regulations to the Amendments to the Generics Act of 1988. - The Department of Health,
in consultation with the appropriate government agencies, shall, within one hundred twenty (120) days from the effectivity of
this Act, promulgate the rules and regulations necessary to effectively implement the provisions of this Act that relate to
Republic Act No. 6675, or the Generics Act of 1988.
CHAPTER 7
AMENDMENTS TO REPUBLIC ACT NO. 5921, AS AMENDED, OTHERWISE KNOWN AS THE PHARMACY
LAW
SEC. 43. Section 25 of Republic Act No. 5921, as amended, otherwise known as the Pharmacy Law, is hereby amended to read
as follows:
"SEC. 25. Sale of medicine, pharmaceuticals, drugs and devices. - No medicine, pharmaceutical, or drug, except for those
which are non-prescription or over-the-counter, of whatever nature and kind or device shall be compounded, dispensed, sold or
resold, or otherwise be made available to the consuming public except through a prescription drugstore or hospital pharmacy,
duly established in accordance with the provisions of this Act. Non-prescription or over-the-counter drugs may be sold in their
original packages, bottles, containers or in small quantities, not in their original containers to the consuming public through
supermarkets, convenience stores and other retail establishments.
"Pharmaceutical, drug or biological manufacturing establishments, importers and wholesalers of drugs, medicines, or biologic
products, shall not sell their products for re-sale except only to retail drug outlets, hospital pharmacies or to other drug
wholesalers under the supervision of a registered pharmacist, and supermarkets, convenience stores, other retail establishments
for over-the-counter drugs, duly licensed by the Bureau of Food and Drugs."
SEC. 44. Implementing Rules and Regulations to the Amendments to the Pharmacy Law. - The Department of Health, in
consultation with the appropriate government agencies, within one hundred twenty (120) days from the effectivity of this Act,
shall promulgate the rules and regulations necessary to effectively implement the provisions of this Chapter.
CHAPTER 8
MISCELLANEOUS PROVISIONS
13
SEC. 45. Congressional Oversight Committee. - For the effective implementation of this Act, there shall be created a
Congressional Oversight Committee, hereinafter referred to as the Quality Affordable Medicines Oversight Committee, to be
composed of five (5) members from the Senate, which shall include the Chairpersons of the Senate Committees on Trade and
Commerce and Health and Demography, and, five (5) members from the House of Representatives, which shall include the
Chairpersons of the House of Representatives Committees on Trade and Industry and Health. The Quality Affordable
Medicines Oversight Committee shall be jointly chaired by the Chairpersons of the Senate Committee on Trade and Commerce
and the House of Representatives Committee on Trade and Industry. The Vice-Chair of the oversight committee shall be jointly
held by the Chairpersons of the Senate Committee on Health and Demography and the House of Representatives Committee on
Health.
SEC. 46. Appropriations. - For the initial implementation of this Act, the amount of Twenty-five million pesos
(Php25,000,000.00), in addition to the budget of the Department of Health, shall be provided for the operations of the Office of
the Secretary of the Department of Health. The Quality Affordable Medicines Oversight Committee shall be provided an initial
budget of Five million pesos (Php5,000,000.00) to perform its functions as mandated under this Act. Thereafter, such sum as
may be necessary for its continued implementation shall be included in the annual General Appropriations Act.
SEC. 47. Separability Clause. - Any portion or provision of this Act that may be declared unconstitutional or invalid shall not
have the effect of nullifying other portions and provisions hereof as long as such remaining portion or provision can still subsist
and be given effect in their entirety.
SEC. 48. Repealing Clause. - All laws, decrees, executive orders, proclamations and administrative regulations or parts thereof
inconsistent herewith are hereby repealed or modified accordingly.
SEC. 49. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in at least two (2) national papers
of general circulation.
Approved,
(Sgd.) PROSPERO C. NOGRALES (Sgd.) MANNY VILLAR

Speaker of the House of Representatives President of the Senate
This Act which is a consolidation of Senate Bill No. 1658 and House Bill No. 2844 was finally passed by the Senate and the
House of Representatives on April 29, 2008.
(Sgd.) MARILYN B. BARUA-YAP (Sgd.) EMMA LIRIO-REYES

Secretary General Secretary of Senate
House of Represenatives
Approved: JUN 06, 2008
(Sgd.) GLORIA MACAPAGAL-ARROYO

President of the Philippines
Print
Philippine President Signs Cheaper Medicines Act
Asia Medical eNewsletter
August 05, 2008
14
President Gloria Macapagal-Arroyo of the Philippines signed Republic Act no. 9502 on June 6, 2008. This Act is officially
titled the “Universally Accessible Cheaper and Quality Medicines Act of 2008,” and was originally proposed in October 2007.
The new law amends the Pharmacy Law (Republic Act no. 5921), the Intellectual Property Code (Republic Act no. 8293), and
the Generics Act of 1988 (Republic Act no. 6675).
The Intellectual Property Code amendments allow for parallel importation of cheaper drugs and medicines from abroad whose
local patents have not expired. In addition, it allows generic drug manufacturers to experiment, produce, and register patented
drugs before the expiration date of the patents. This way, generic drug companies will be able to market their product
immediately after patent expiration. The law will also make drug patents more difficult to obtain in the future, by disqualifying
newly discovered uses of known drugs.
The amendments to the Pharmacy Law allow pharmacies and licensed retailers to sell OTC products. The amendments to the
Generics Act would require drug manufacturers to produce, distribute, and make widely available unbranded generic
equivalents to their branded drugs.
The President has also been given the power to impose price ceilings on various drugs based on recommendations from the
Health Secretary. These include drugs for prevention of disease, for chronic illness, and others listed in the Philippine National
Drug Formulary Essential Drug List.
Finally, the Quality Affordable Medicines Oversight Committee will be established to monitor the implementation of this new
Act.
Please past as anonymous - thx

E-DRUG: Cheaper Medicines Act in Philippines
--------------------------------------------
[20 years after the Philippines introduced a Generics Act - designed to
reform the way medicines are supplied and used in the country - a new
law has just been passed. It aims to ensure that poor Filipinos have
improved access to essential medicines at affordable prices and
acceptable quality. The passage of the new Act begs the question about
the lack of effective implementation of the previous Generics Act.
Without implementation, little change is likely to occur. The
Philippines probably had sufficient policy tools already in place,
without a new Act; what was missing was the political will to enforce
the Generics Act, to ensure that the country's drug regulatory agency
was effective in ensuring only quality products were registered, and
that prescribers and dispensers were encouraged to use only generics.
Such action would have meant that for the past 20 years, Filipinos would
have benefited from cheaper medicines and had more access to them.
Hopefully, they will not have to wait another 20 years. Below a local
newspaper story from Philippines - copied as fair use. AC]
Philippines president signs Cheaper Medicines Act
FRIDAY, JUNE 6, 2008 | CONSTITUTION AND LAW
STA. CRUZ, Laguna (PNA) -- President Gloria Macapagal-Arroyo on Friday

signed Republic Act no. 9502, an Act providing for cheaper and quality
medicines.
The new law amends Republic Act no. 6675 or the Generics Act of 1988,
Republic Act no. 8293 or the Intellectual Property Code, and Republic
Act no. 5921 or the Pharmacy Law.
In signing the Cheaper and Quality Medicines Act of 2008, the President
said the Generics Law before was incomplete.
15
"The importance of the Cheaper and Quality Medicines Act, we now
completed our legislative reforms in bringing affordable medicines to
the people," she said.
Under the new law, it allows the parallel importation of patented

medicines from other countries where these are more affordable.
It also allows local generics firm to test, produce and register their
generic versions of patented drugs, so these can be sold right upon
patent expiry early working principle).
However, the new law prohibits the grant of new patents based only on
newly discovered uses of a known drugs substance.
The Act also allows the government use of patented drugs when public
health is at stake.
It also gives the President the power "to impose price ceilings on
various drugs, upon the recommendation of the Health Secretary.
These drugs include those for chronic illnesses, for prevention of

diseases, and those in the Philippine National Drug Formulary (PNDF)
Essential Drug List.
The Act also strengthens the Bureau of Food and Drugs (BFAD) to ensure
the safety of medicines by allowing it to retain its revenues for
upgrading of its facilities, equipment and human resources; and also
ensures the availability of affordable medicines by requiring drug
outlets to carry a variety of brands for each drug -- including those
sourced from "parallel importation" -- to give the consumer more
choices.
The new law also creates a congressional oversight committee -- such as

the Quality Affordable Medicines Oversight Committee -- to monitor the
implementation of the Cheaper and Quality Medicines Act.
President Arroyo, assisted by Health Secretary Francisco Duque who

accompanied her here, also distributed some 65 PhilHealth cards to
indigent residents of this town.
She then inspected the newly upgraded Laguna Chest Center building here.
The President proceeded to AMHERST Pharma Distribution Center in Binan,

Laguna.
(By Lilybeth G. Ison - PNA)

LBV/LGI/mec
GMA signs Cheaper Medicines Act
PNA -- President Gloria Macapagal-Arroyo on Friday signed Republic Act no. 9502, an Act providing for cheaper and quality
medicines.
The new law amends Republic Act no. 6675 or the Generics Act of 1988,Republic Act no. 8293 or the Intellectual Property
Code, and RepublicAct no. 5921 or the Pharmacy Law.
16
In signing the Cheaper and Quality Medicines Act of 2008, the President said the Generics Law before was incomplete.
"The importance of the Cheaper and Quality Medicines Act, we nowcompleted our legislative reforms in bringing affordable
medicines tothe people," she said.
Under the new law, it allows the parallel importation of patentedmedicines from other countries where these are more
affordable.
It also allows local generics firm to test, produce and register theirgeneric versions of patented drugs, so these can be sold right
uponpatent expiry early working principle).
However, the new law prohibits the grant of new patents based only on newly discovered uses of a known drugs substance.
The Act also allows the government use of patented drugs when the public is at stake.
It also gives the President the power "to impose price ceilings onvarious drugs, upon the recommendation of the Health
Secretary.
These drugs include those of chronic illnesses, for prevention ofdiseases, and those in the Philippine National Drug Formulary
(PNDF)Essential Drug List.
The Act also strengthens the Bureau of Food and Drugs (BFAD) to ensurethe safety of medicines by allowing it to retain its
revenues forupgrading of its facilities, equipment and human resources; and alsoensures the availability of affordable medicines
by requiring drugoutlets to carry a variety of brands for each drug -- including thosesourced from "parallel importation" -- to
give the consumer morechoices.
The new law also creates a congressional oversight committee -- such asthe Quality Affordable Medicines Oversight
Committee -- to monitor theimplementation of the Cheaper and Quality Medicines Act.
President Arroyo, assisted by Health Secretary Francisco Duque whoaccompanied her here, also distributed some 65 PhilHealth
cards toindigent residents of this town.
She then inspected the newly upgraded Laguna Chest Center building here.
The President proceeded to AMHERST Pharma Distribution Center in Binan, Laguna.
The Pharmaceutical Market:Philippines
Opportunities and Challenges

Published:
February 17th 2012
Pages:
66
Single User Price:
£620 / $1085 / €775
Available Formats:
On-line, PDF by Email and Paper
17
THE PHARMACEUTICAL MARKET: PHILIPPINES - REVIEW
The Philippines is projected to be the tenth largest economy in the Asia Pacific region by 2016. High government spending to
stimulate the economy has improved conditions temporarily but in turn has created a large budget gap. The Philippines remains
on the USTR’s Watch List in 2011, primarily due to the fact that “the United States remains concerned about amendments to
the patent law that prohibit patents on certain chemical forms unless the applicant demonstrates increased efficacy”.
Demographically, the population of the Philippines will be the seventh largest in the Asia Pacific region covered by 2016. The
population remains relatively young.
The Philippines has one of the highest drug prices in the world. Changes brought about by the controversial Cheaper Medicine
Act have impacted the Philippines pharmaceutical market in a number of areas, including IP laws, competition and drug
price control mechanisms. Since the Act’s implementation, a considerable number of drugs have seen price reductions by up to
half. The immediate term will be the most volatile, as the government battles with the international pharmaceutical industry for
ground in the market, which up until recently experienced a free-market policy with no price regulations in place.
Espicom estimates a high single-digit CAGR in US dollar terms for the Philippines pharmaceutical market in the period
2011 to 2016. The Philippines will be the ninth largest pharmaceutical market in the Asia Pacific region by 2016. The
Philippines is heavily reliant on imports of finished medicaments, and exports little in way of pharmaceuticals, therefore the
deficit in the balance of trade is likely to increase during the forecast period. The Philippines OTC sector is dominated by
three Filipino pharmaceutical companies that control over half of this sector. The Philippines generics sector is being actively
backed by the government and is led by UniLab.
ENHANCED STRATEGIC INTELLIGENCE
Espicom's highly regarded world pharmaceutical market reports have been redesigned to provide enhanced strategic
intelligence in a user-friendly format. Each report provides in-depth information, setting the pharmaceutical market in context.
The reports provide:
 Five-year projections for economic, demographic, health expenditure, health workforce and pharmaceutical
market indicators.
 Specialised intelligence on OTCs, generics, biologics and biosimilars.
 Exclusive economic and demographic data from the Economist Intelligence Unit (EIU) for each market in
the series.
 A separate statistical health file, comprising health expenditure, health infrastructure, health services and
health personnel.
 The reports are updated quarterly, providing you with the latest information for a full year. In addition, the
service will keep you up to date with market and industry news on a regular basis.
HEALTHCARE STATISTICS
A comprehensive tabula review, comprising demographics, epidemiology, health expenditure, hospital and primary care
infrastructure & services and healthcare personnel, is additionally included.
Manila, Philippines. President Arroyo signed Executive Order 821 last July 28 passing EO 821 or the Cheaper Medicines Law
for the country.
Today, Robert Louie P. So of the Department of Health (DoH) says that the Palace is not changing it deadline for
implementation. August 15 is the compliance date for retailers with automated systems, and September 15 for smaller
establishments with manual systems.
What are the medicines included in the EO 821 Cheaper Medicine Law for the Philippines?
Out of the 22 that was originally recommended by the Department of Health (DOH), only 5 essential medicines were approved:
18
 anti-hypertensive amlodipine (including its S-isomer and all salt form)
 anti-cholesterol atorvastatin
 antibiotic/antibacterial azithromycin (and all its salt form)
 anti-neoplastics/anti-cancer cytarabine (and all its salt form)
 anti-neoplastics/anti-cancer doxorubicin (and all its salt form)
In a case study of generic cholesterol medicines, prices of branded and generics can differ by up to 70%. This law hopes that
the difference will be much less and make medicines more affordable.
People from the Philippines hope that more medicines are added to this list in the near future.
Implementation Of The Cheaper Medicines Act Progressing Slowly
December 2009 | Industry Trend Analysis

 Printable version
 Bookmark
Bureaucracy and a lack of funding are hampering the implementation of the Universally Accessible Cheaper and Quality
Medicines Act in the Philippines. Only 21 pharmaceuticals have had their prices cut since the legislation was passed in 2008.
Although BMI expects additional medicines to be included in the scheme during 2010, progress will be slow, mainly due to a
lack of engagement from drugmakers.
Strong Growth Ahead

Click here to see full size Table
In order to calculate price cuts, the authorities in the Philippines must look at the situation in other parts of the world. At a
Senate oversight hearing, the project management unit manager of the Department of Health National Drug Program, Robert
Louie So, revealed that sourcing information had been 'administratively cumbersome'.
In addition to requesting data from numerous foreign organisations and generic drug manufacturers, the information must be
compiled and validated. So also blamed the delay in the Department of Budget and Management's release of notices, which if
more efficient would allow the Department of Health to set up an office specifically tasked to assess the global drug pricing
environment.
Two of the most prominent champions of the legislation, Senators Manuel Roxas and Pia Cayetano, have expressed their
dismay at the situation. Roxas said the Department of Health could just send a list of drugs to the Department of Trade and
Industry, which could train individuals to research price differentials locally and in other countries. Cayetano even offered her
own staff to help accelerate the process.
Under the Universally Accessible Cheaper and Quality Medicines Act, five drugs are currently subjected to a Maximum Retail
Price in the Philippines. The anti-hypertensive amlodipine 10mg is priced at PHP38.50 (US$0.83), atorvastatin for high
cholesterol costs PHP50.63 (US$1.09), the price for the anti-infective azithromycin 250mg is PHP108.50 (US$2.33), cytarabine
100mg/mL for haematological malignancies costs PHP240 (US$5.15), and doxorubicin 10mg is priced at PHP1465.75
(US$31.44). All prices are 50% lower than previously. [1] Another 16 medicines have been subjected to a 10-15% price cut by
the government.
The Philippines pharmaceutical market is forecast to expand by 7.67% in 2009. Although this growth is below the 2004-2008
compound annual growth rate (CAGR) of 9.73%, it is still respectable given the economic downturn. Annual per-capita
spending is US$29.10 and expenditure as a percent of GDP is 1.67%. Through to 2014, we are forecasting a CAGR of 8.82%
for combined sales of over-the-counter (OTC) medicines and prescription drugs in the Philippines.
http://www.pharmaceuticalsinsight.com/file/85445/implementation-of-the-cheaper-medicines-act-progressing-slowly.html
19
Pharmaceutical Market Forecast Revised Downwards
January 2012 | Industry Trend Analysis

 Bookmark
BMI View: The government of the Philippines' increasing efforts in healthcare provision are positive for pharmaceutical and
medical devices sales, however, more has to be done in order to sustain market growth. We expect the relatively stable
economic and political situations to provide an attractive environment for multinational companies to invest in the country,
despite our downgrade of the pharmaceutical market projection.
BMI has revised down its forecast for the Philippines' pharmaceutical market following receipt of the most recent market
information and reappraisal of historic data. According to the Pharmaceutical and Healthcare Association of the Philippines
(PHAP), combined sales of prescription and over-the-counter medicines increased from PHP123.2bn (US$2.73bn) in 2010 to
PHP126.0bn (US$2.74bn) in 2011, equating to growth of 2.29%. The 2011 figure was moderately lower than what BMI
previously estimated (PHP140bn; US$3.0bn).
Over the medium term to 2016 and long term to 2021, we forecast the Philippine pharmaceutical market to post local currency
compound annual growth rates (CAGRs) of 3.67% and 4.34% respectively. The market will reach a value of US$4.8bn by
2021.
New Outlook
In BMI 's Q212 Asia Pacific Risk/Reward Ratings (RRRs), the Philippines scores 48.7 out of 100, below the regional average of
53.7, ranking 12 th out of the 18 key markets in the region. Low annual per capita pharmaceutical (US$28.8) and healthcare
(US$78.9) expenditure mean the majority of the population does not have access to healthcare or a wide variety of
pharmaceutical products. Consequently, we do not expect pharmaceutical sales in the country to rise significantly unless the
government steps up its efforts to improve healthcare provision. [1]
BMI Long-Term Economic View: The Philippines has significant economic growth potential and may come into the investment
spotlight in the next few years. Although the country has been hampered by political instability and poor investor perception,
we believe President Benigno Aquino III will be able to make progress on both fronts. Consumerism should pick up in a big
way towards the end of the decade as general income levels rise.
Relative Steady Growth From 2011

Recent Healthcare Sector Developments
In January 2012, international health experts praised the rotavirus vaccination programme in the Philippines that makes it the
first country in South East Asia to vaccinate newborn babies against rotavirus. Initially about 700,000 newborns from 5.2mn
families identified as 'poorest of the poor' by the Department of Social Welfare and Development under its National Household
Targeting System will be vaccinated.
In December 2011, state-owned Philippine Health Insurance (PhilHealth) said it planned to use its PHP90bn (US$2.0bn)
reserve funds to increase the benefit packages of its members. President and chief executive Eduardo Banzon said the funds
will be used to reduce members' out-of-pocket expenses during hospitalisation, though the provider has not decided the exact
amount. The planned rise in the premium contributions of members, effective from January 2012, will not be covered by the
funds, Banzon said. PhilHealth is set to expand the coverage of social health insurance for all Filipinos by the end of 2013.
BMI Political View: The Philippines faces a number of political challenges over the coming years that, if handled successfully,
could improve governance. However, given the country's low income levels and high levels of inequality, we expect the
political scene to remain vulnerable to intermittent periods of turmoil.
[1]
Business Monitor Online - Industry Trend Analysis - Healthcare Improvements Encouraging But More Needs To Be Done-
November 29 2011.
20
http://www.pharmaceuticalsinsight.com/file/109746/pharmaceutical-market-forecast-revised-downwards.html
Roche's Avastin Approved For Ovarian Cancer Treatment
October 2011 | Industry Trend Analysis

 Bookmark
BMI View : While the approval of Roche's Avastin (bevacizumab) as a first-line treatment for ovarian cancer in the Philippines
is a positive decision that will moderate the burden of disease, we believe the country's low per capita healthcare and
pharmaceutical expenditure put the drug out of reach for the vast majority of the population. In addition, it is also unlikely that
Roche will follow GlaxoSmithKline (GSK)'s differential price strategy as the majority of the Swiss company's portfolio contains
hard-to-develop biologics.
The Philippine Food and Drug Administration (FDA) has approved the use of Roche's Avastin (bevacizumab) in combination
with standard chemotherapy (carboplatin and paclitaxel) as a front-line treatment for women with advanced ovarian cancer. In
the Philippines, ovarian cancer is the second leading cause of death from gynaecologic cancers, and seventh most common
cause of cancer mortality in women. According to BMI 's Burden of Disease Database (BoDD), the number of disability-
adjusted life years (DALYs) lost to ovarian cancers in the country was approximately 14,000 in 2005 and will increase by 8%
to 15,123 by 2030.
Low Burden
High-Cost Drug Out Of Reach For Most
Avastin has been approved for treatment against several cancers, such as colorectal and lung cancer, in the US, Europe and
Canada. The cost of using Avastin on top of standard treatment for lung and cancer patients is approximately US$100,000
annually. For colorectal cancer, the cost is US$42,800-55,000 annually. [1]
We believe the cost of using Avastin in the Philippines will be equally high and consequently it is unlikely that many patients
will be able to afford such treatment. Per capita pharmaceutical and healthcare expenditure in the Philippines reached US$29.4
and US$77.3, respectively in 2010. By 2020, the expenditure amounts will only increase to US$51.2 and US$139.5
respectively. This is still insufficient to cover the high cost of Avastin.
Low Expenditure
Differential Drug Pricing, An Unlikely Possibility
In 2010, GSK cut drug prices in the Philippines by 50% and in January 2011 the company announced that its revenue in the
country grew above the industry average, highlighting the success of this strategy. [2] BMI believes that in the short-term, Roche
is unlikely to use a differential pricing strategy in the Philippines. According to the BoDD, DALYs lost to ovarian cancer
represented 2.5% of the DALYs lost to all cancers. Therefore, if Roche lowers the price of Avastin for ovarian cancer
treatment, it will not necessary see a significant revenue increase from volume sales.
More importantly, Roche's portfolio largely differs from other pharmaceutical companies that have used differential drug
pricing such as GSK, Sanofi and Bristol-Myers Squibb (BMS). In line with Roche's long-term strategy of providing
personalised medicines for patients, its pharmaceutical portfolio is largely made up of biologics against cancer and other rare
diseases as opposed to small molecules. These biologics products are usually harder and more expensive to develop and some
of Roche's products are indicated for rare disorders, such as Rituxan (rituximab) for Wegener's granulomatosis and microscopic
polyangiitis, further highlighting that a lower cost may not necessarily bring more volume sales.
In September 2011, Severin Schwan, the chief executive of Roche, said the company had run a successful pilot programme in
Brazil involving a 'substantial double-digit discount' on Rituxan.
21
Despite the success of this scheme, we continue to believe it is unlikely to extend to the Philippines in the short term. Brazil is
one of the world's most attractive emerging markets. BMI forecasts compound annual growth rates (CAGRs) through to 2015
and 2020 of 7.95% and 7.31% respectively in local currency terms (12.52% and 10.61 in US dollars term) for Brazil. In
contrast, the CAGRs for the Philippines are projected to be 5.73% and 6.29% respectively in local currency terms (7.90% and
7.44% in US dollars terms).
While the growth rate is moderately high, there is still a possibility that Roche will not achieve similar success if differential
pricing is used in the Philippines as pharmaceutical sales in absolute terms are low, totalling US$2.7bn in 2010 (Brazil's
pharmaceutical sales reached US$20.9bn in the same year).
Brazil > Philippines

Roche Developments In The Philippines
In October 2011, the FDA approved Roche's Tarceva (erlotinib) as a first-line therapy for patients with advanced or metastatic
non-small-cell lung cancer with epidermal growth factor receptor (EGFR). According to the Philippine Cancer Society, lung
cancer is the leading cause of death the country.
In August 2011, as part of its corporate social responsibilities, Roche partnered with the Hepatology Society of the Philippines,
with the support of the Yellow Warriors Society, to launch the Pegassist Easy Access Plan for patients with hepatitis B.
Through this plan, hepatitis B patients can have access to Pegasys (PEGylated interferon) with discounts of up to 50%.
[1]
Mayer, Robert J - Two Steps Forward in the Treatment of Colorectal Cancer - New England Journal of Medicine 350.23
(2004): 2406-408.
[2]
Business Monitor Online - Industry Trend Analysis - Differential Pricing: A Key Strategy To Boost Sales In Emerging
Markets- January 26 2011.
http://www.pharmaceuticalsinsight.com/file/107592/roches-avastin-approved-for-ovarian-cancer-treatment.html
The Philippines has made it easier for generic drugs to enter the marketplace thereby reducing the amount of time a branded
drug has exclusivity, much to the annoyance of research-based pharmaceutical companies. While the development will
negatively impact the multinationals in the short-term, BMI believes that the improved intellectual property environment will
protect the long-standing interests of foreign firms.
Cheaper Medicines Act not properly implemented — Villar

ROUCHELLE DINGLASAN, GMA NEWS March 19, 2012 5:03pm
19 1 Email0 ShareThis20

A study conducted by the Senate committee on trade and commerce has shown that four years after the ratification of Republic
Act No. 9502 or the "Universally Accessible Cheaper and Quality Medicines Act of 2008," prices of some medicines have yet
to go down.

At the bicameral hearing of the quality affordable medicine oversight committee on Monday, it was revealed that of the five
drugs included in the study, only the price of one has decreased since 2008 — and it was not even because of the law.

“Norvasc lang ang bumaba. Nabanggit kanina na kaya bumaba ito [ay] dahil naalis na ‘yung patent protection at talagang
normally bababa na ‘yun. Walang kinalaman ang batas sa pagbaba nun,” Sen. Manny Villar, chairman of the Senate
committee on trade and commerce, told reporters in an interview after the hearing.

Other drugs that were part of the study were Plendil, which cost P23.76 before the passage of the Cheaper Medicine Law but is
now P32.25; Ventolin (inhaler), which used to be P352 but is now P432.50; Ponstan, which used to be P26 but is now P29.75;
and Bactrim, which used to be P17 but is now P33.75.
70-percent decrease
22

But according to Reinier Gloor, executive director of Pharmaceutical & Healthcare Association of the Philippines, prices of
some medicines have gone down by as much as 70 percent since the law was passed. He said most of these medicines were
those sourced from abroad.
“There are lots of Filipino companies… 125 local firms, some competing with multinational products. In certain products
sourced from India or China and so forth, the reduction is 60 to 70 percent. For products made in Europe and the United States,
the product price reduction goes down to 60 percent,” Gloor said.

Still, Villar said he would further study the implementation of the Cheaper Medicines Act.
“Hindi ako titigil hanggang hindi nakakagawa ng rekomendasyn ang aking komite dito sa implementasyon ng batas na ito.
Mahalaga na bumaba ang presyo ng gamot, ito ang objective ng batas na ito at ‘yan ang dapat mangyari,” he said.
“Lobbied”?

Villar said it is “possible” that pharmaceutical companies had a hand — through intensive lobbying — in drafting the
Implementing Rules and Regulations (IRR) of the law.
“Possibleng nagkaron ng lobbying sa IRR pero wala akong inaakusahan. Ang sinasabi ko lang ay posible… Masyadong
maaga para malaman kung sino pero definitely sa ating pagre-review may mga kumpanya na nagva-violate nito,” he said.
Villar said his committee would invite health officials who drafted the IRR to the third bicameral hearing.
Out with VAT
To further lower the prices of medicines, Villar proposed to remove the value-added tax on medicines.
“Pino-propose ko rin na tanggalin ang VAT sa gamot. Hindi naman talaga dapat na papatungan pa ng VAT ang mga gamot
[dahil] talaga namang napakahalaga ito sa ating buhay, kaya hindi ko naiintindihan kung bakit naipasama yan sa VAT natin
noon,” he said.
He said his son, Las Piñas Rep. Mar Villar, has already filed a bill for this, noting that tax measures must originate from the
House of Representatives.
Free medicines for cancer patients
Meanwhile, Villar also proposed to provide free medicines specifically to cancer patients.
“Ako’y talagang nag-propose noon pa na dapat itong mga gamot sa cancer ay ibigay ng gobyerno na libre. Naniniwala akong
kaya ng budget 'yan,” he said.
The senator claimed that the government may opt to buy in bulk to avail of discounts.
“Ang isang Pilipino ay hindi dapat mamatay dahil sa cancer na hindi lamang nagkakaroon ng pagkakataon [makatikim ng
gamot],” he said. – KBK, GMA News
MANILA – Senator Manny Villar underscored yesterday the need to amend the Cheaper Medicines Act after it failed
to achieve the primary objective of making the basic medicines available to the big number of poor Filipinos.
”What bothered me is that 90 percent of the poorest of the poor can’t still afford to buy essential medicines like
Norvasc. I don’t want to see the poor Filipinos die because they can’t afford to buy medicines,” Villar said.
He made the statement during the Senate inquiry into the status of the implementation of the Cheaper Medicines
Act at the Manila Tytana College along Macapagal Blvd. in Pasay City.
23
”It seems that this law is not successful in its objective to bring down the costs of medicines for the poor Filipinos. If
we cannot bring down the prices of medicines, this law is useless,” Villar added.
Villar, chairperson of the Senate committee on trade and commerce, expressed dismay over the failure of the
Department of Health to come out with comprehensive report on the implementation of the Cheaper Medicines Act.
”It’s very surprising. Actually, it shocked me that we have no exact data how many of the poor benefited from this
law. What we are trying to establish is the magnitude of the problem and how the law is being implemented but you
cannot give me an idea. I can see very clearly that you’re not monitoring this law,” Villar told the DOH
representatives.
The senator said that under the law, the DOH is the government agency that should monitor the implementation of
the Cheaper Medicines Act.
Villar said he would propose to increase the coverage of the law from only 27 medicines “to make sure that those
who have no money will not die because they have no money.”
When the Cheaper Medicines law was enacted four years ago, the costs of the 22 basic medicines have been
reduced by at least 50 percent but Villar wants to see if it could be reduced even up to 70 percent like in other
countries such as Thailand and India.
Villar said he would invite the drug manufacturers in the next hearing after learning that many small drug retailers
cannot lower the prices as prescribed by the law due to higher costs imposed by the manufacturers on the basic
medicines covered by the Cheaper Medicines Act.
”We will invite representatives of the drug manufacturers in the next hearing so that we may be able to determine
how they can help to lower further the costs of medicines,” he said.*PNA
Cheaper Medicines Act Amendment Pushed

By TARA YAP
March 21, 2012, 12:45am
PASSI CITY, Iloilo — The Cheaper Medicines Act must be amended to give it teeth, declared Senator Manuel Villar who
stressed his disappointment in the fact that poor Filipinos still cannot afford to buy needed medicines due to the lax
implementation of said Act.
“I will not allow the law to be sabotaged,” said Villar who was in Passi City recently for the 2012 Pintados de Pasi Festival.
Villar, who chairs the Senate Trade and Commerce Committee, said majority of pharmaceutical companies are not keen in
bringing down medicine prices since the enactment of the law in 2008.
Since the passage of the law that is also known as Republic Act No. 9502, only the price of 27 medicine brands were reduced
by 50 percent.
Villar said he is looking at the lowering of prices of more medicine brands by as much as 70 percent, like in India.
He also said the amendment of said Act will also give credit to the initiative of Iloilo fourth district Rep. Ferjenel Biron, one of
the original authors of the law.
Biron wanted mandatory drug price regulation, which would automatically reduce prices of approximately 1,000 basic
medicines.
24
But it was the version of former Senator and now Secretary of the Department of Transportation and Communication (DOTC)
Manuel A. Roxas II that was enacted into law.
Three years of Cheaper Medicine Law has not made drugs affordable
Three years after the Universally Accessible Cheaper and Quality Medicines Act of 2008 (Republic Act 9502) was signed,
essential drugs are still neither assessable nor affordable to ordinary Filipinos.
Health Alliance for Democracy (HEAD) today criticized the Aquino administration for perpetuating “an anemic
implementation of an already watered-down law”. Citing a 2009 study by Health Action Information Network on medicine
prices and availability in the Philippines, “standard treatments with these (brand-name drugs) require several days’ up to a
weeks’ worth of wages”, said Dr. Geneve E. Rivera, secretary-general of Health Alliance for Democracy (HEAD).
According to the same study, “generic medicines in private facilities may be unaffordable too, requiring several days’ wages to
purchase.” “Treatment courses using generic medicines in public facilities are generally affordable based on the salary of the
lowest paid government worker. However, many Filipinos earn less than this wage and that managing an illness entails other
costs that may eventually render even the lowest-cost treatments unaffordable.”
HEAD believes that the Aquino government has not done enough to regulate the practices of multinational drug companies.
These companies have had their way in dictating drug prices, which are often three-to-four times more than prices in other
countries.
“How can the Cheaper Medicine Law have any real impact when the monopoly of big transnational pharmaceutical in the drug
industry continues?” said Dr. Rivera. The health group also believes that essential steps in establishing a national, a truly
Filipino drug industry must be undertaken.
“While the immediate goal is to put an end to the monopoly pricing that has kept our people captive for decades, the more long-
term goal is to institutionalize fundamental changes in the entire drug industry because this is the only way to ensure affordable
and accessible medicine.” added Dr. Rivera. ###
Villar: Cheaper medicines law failed
03/11/2012
A senator has called for amendments to the Cheaper Medicines Act “after it failed to achieve the primary objective of making
the basic medicines available to the big number of poor Filipinos.”
At the Senate inquiry into the status of the implementation of the law at the Manila Tytana College on Macapagal Boulevard in
Pasay City last Thursday, Sen. Manuel Villar said ”what bothered me is that 90 percent of the poorest of the poor still can’t
afford to buy essential medicines like Norvasc. If we cannot bring down the prices of medicines, this law is useless.”
Villar, chairman of the Senate committee on trade and commerce, expressed dismay over the failure of the Department of
Health (DoH) to come out with a comprehensive report on the implementation of the law.
”It shocked me that we have no exact data on how many of the poor benefited from this law. What we are trying to establish is
the magnitude of the problem and how the law is being implemented but you cannot give me an idea. I can see very clearly that
you’re not monitoring this law,” Villar told the DoH representatives.
He said he would propose to increase the coverage of the law from the current 27 medicines.
When the Cheaper Medicines Law was enacted four years ago, the costs of 22 basic medicines were reduced by at least 50
percent, but Villar wants to see if it could be reduced even up to 70 percent as in Thailand and India.
25
Villar said he would invite the drug manufacturers to the next hearing after learning that many small drug retailers cannot lower
the prices as prescribed by the law due to higher costs imposed by the manufacturers on the basic medicines covered by the law.
The senator also instructed the Philippine International Trading Corp. and the Department of Trade and Industry to coordinate
with the DoH and his committee on how to effectively implement the law.
Sen. Pia Cayetano, who attended Thursday’s hearing, supported Villar’s call for the government agencies to strictly implement
the law.
“Perhaps the DoH should come up with specific listings because we want to get more accurate data on the implementation of
the law,” she said. PNA
Villar also wants to determine if herbal medicines should be included in the implementation of the law.
Aside from the possible amendment of the Cheaper Medicines Act, Villar said his committee will conduct public hearings on
Senate Bill 2960 which he authored, proposing the creation of the Drug Price Regulatory Board. PNA
Kapakanan ng bayan, binarat sa Cheaper Medicines Act?
by Darius Galang
Nananatiling hindi abot-kamay sa mga maralitang Pilipino ang mga esensiyal na gamot, sa kabila ng pagsasabatas ng Cheaper
Medicines Act of 2008. (Darius Galang)
Kabi-kabila ang patalastas sa telebisyon ng mga tindahan ng generic na gamot, ngunit nasasalamin kaya nito ang tunay na
kalagayan ng mura at abot-kayang gamot sa bansa?
Naisabatas nga ang Cheaper Medicines Act, ngunit marami ang nagsasabing “ilusyon” lamang ang mga naibigay na pangako
ng Republic Act No. 9502. Kasama na rito ang Consumers’ Action for Empowerment, isang koalisyon ng mga organisasyon at
mga indibiduwal na nag-aabante ng kapakanan ng mga mahihirap laluna sa usapin ng medisina.
Isinabatas noong Hunyo 2008 sa ilalim ng administrasyong Gloria Macapagal-Arroyo ang RA 9502, kilala rin bilang
Universally Accessible Cheaper Medicines Act. Ngunit hanggang sa kasaluluyan, hindi pa rin abot-kaya ang mga gamot na
maaaring magsalba sa buhay ng mga mahihirap nating kababayan.
“Walo sa sampung Pilipino ang hindi nakakabili ng gamot,” ang pahayag ni Eleanor Nolasco, tagapagsalita ng grupo. “Third
year na, pero ano ba ang naging tugon nito sa pagiging available ng gamot. Sa karanasan, hindi ito nagsilbi sa interes ng
mayorya ng ating mga kababayan dahil hindi naman naging mura ang gamot.”
“Kasi alam naman natin na walang access o hindi kaya ng ating mga kababayan na makabili ng gamot lalung-lao na yung
essential medicines na tinatawag.”
Hindi malusog na batas
Sinabi pa ni Nolasco na “sa simula pa lamang, may taglay nang mga mali sa Cheaper Medicine Act at hindi na ito inasahang
mapapababa ang presyo ng gamot.”
Pati ang mga bilang sa datos ay magpapalugmok sa hangad ng kasaping organisasyon na Health Alliance for Democracy
(Head) para sa pagpapaunlad ng sariling industriya ng gamot, pati na rin ang hangad nitong pagpapatupad ng National Drug
Policy. At sa karanasan ng mga kasapi ng Consumers’ Action for Empowerment, pinagtitibay ang ilusyon ng murang gamot ng
tatlong bagay.
26
Una, nangako man ang batas na tumulong sa generic firms sa pagdebelop ng kalidad at abot-kayang gamot, hindi ito
nangangahulugan ng suporta para sa isang lokal na industriya. Nakita ng grupo na pabor pa ang batas sa parallel importation.
Maaari kasing magpasok ng bukod sa mas murang gamot ay may tatak pa (branded) mula sa ibang bansa kung saan mura ang
mga ito. Kahit mayroon namang katulad ito sa merkado ng Pilipinas.
Protesta kontra sa Cheaper Medicines Act noong Hunyo 7, 2011. (Darius Galang)
Sa pananaliksik ng grupo, sumusunod ang bansa sa Japan bilang mga bansang may matataas na presyo ng gamot sa Asya.
Lumalabas na posibleng patayin ng parallel importation ang industriya ng gamot sa bansa, ayon sa naturang grupo.
Ikalawa, nananatili ang monopolyadong kontrol ng mga korporasyong transnasyunal sa mga patente ng gamot. Lumalabas na
nasa pagitan ng 80-90 porsiyento ng mga esensiyal na gamot ay off-patent (maaari nang mamanupaktura nang mas malaya na
walang takot sa pagmamay-ari dahil sa patente) pero hindi pa maaaring maimanupaktura upang mabili ng mga mamamamayan.
Kulang lamang sa 200 mula sa 800 esensiyal na gamot ang naipoprodyus ng lokal na manufacturers ng gamot. Ipinapakita nito
na kulang na kulang ang suporta ng gobyerno sa industriya, ayon pa sa CAE.
Ikatlo, kontrolado pa rin ng unregulated free-market forces ang pagtatakda ng presyo ng gamot. “Hindi natatanggal ang
monopolyo ng transnational pharmaceutical companies sa ating industriya,” pansin ni Nolasco. Kaya naman malaya pa rin ang
pagdidikta ng transnasyunal na mga korporasyon na nagmamanupaktura at naglalako ng mga gamot na magpatupad ng presyo
nila sa kanilang mga produkto, kahit pa may kapangyarihan ang pangulo ng bansa na magtakda ng price ceilings.
“Bukod pa dito ay hindi naman tinutulungan ng pamahalaan na makipag-compete ang ating lokal na mga brand,” dugtong ni
Nolasco.
Sinabi pa ni Nolasco na kahit may Generics Act, hindi rin ito makakatugon laluna sa mga hikahos sa buhay. “Mura nga ang
gamot ngunit wala ka namang pera, at wala ka namang support mechanisms o provisions para maka-access ka (sa gamot).
Ampaw rin ang labas ng batas.”
Serbisyo ang isa-isip
Sa kasalukuyan, umabot sa 20 lamang na esensiyal na gamot ang bumagsak ang presyo, hindi tulad ng inaasahan na
masasaklawan ng batas na sinasabing essential medicines upang masagot ang pangangailangan para sa mga pangkaraniwang
karamdaman. “Kaya ilusyon lang ang Cheaper Medicines Bill dahil laluna sa puntong ngayon na binabaan pa ang health
budget. Pati na ang supplies ng gamot sa public institutions ay hindi na available,” sabi pa ni Nolasco.
Sa ngayon, inaasahan sana ang estado na magbigay ng libreng gamot lalung laluna sa mga pampublikong institusyon o ospital.
Pero hindi pa ito nagaganap, sabi ni Nolasco. “Kaya ang mga mahihirap nating pasyente at kababayan ay kailangan pa silang
maghanap sa iba’t ibang drugstore at parmasya. Kung mayroon man, wala naman silang sapat na pambili para dito sa essential
medicines.”
“Nananawagan kami sa gobyernong Aquino na remedyuhan ang problema ng hindi maawat na pataas na presyo ng gamot,”
panawagan ni Nolasco, “sa pamamagitan ng probisyon ng libreng esensiyal na gamot para sa mas nakararaming mahihirap
laluna sa mga pampublikong ospital at government health centers. Totohanin nila ang pagbaba ng halaga ng essential
medicines at gawin nila itong accessible laluna sa mga mamamayang mahihirap. ”
Dugtong niya na maaabot ito sa pamamagitan ng pagsasabansa ng lokal na industriya ng gamot, at pagbuo ng isang drug
regulatory board na demokratikong kakatawan sa stakeholders, o iba’t ibang sektor ng mga mamamayan.
 How can the Law and its IRR make medicines more accessible & affordable to Filipinos?
Question: How can the Law and its IRR make medicines more accessible & affordable to Filipinos?
Answer: Print
27

The Law and its IRR intend to make medicines more accessible & affordable to Filipinos by enforcing provisions that improve
market competition, availability, contain costs, improve healthcare provider and consumers behaviour, and when instances so
require, even regulate prices.
a. Interventions to Improve Competition:
i. Parallel Importation of patented Medicines
ii. Required Production of Generic Drugs
iii. Promotion of quality generic drugs
iv. Enforcement of the Early working Provision for patented medicines.
b. Interventions to Improve Availability:
i. Compulsory Licensing for patented Medicines

ii. Special Compulsory Licensing for patented Medicines
iii. Government Use of Patented Medicines
iv. Mandatory Carry for patented parallel imports
v. Non-traditional outlets like Convenience Stores and supermarkets allowed to sell Over-the-Counter drugs
c. Cost containment Measures:
i. PhilHealth Reimbursements
ii. Government Pooled Procurement
iii. Consignment
d. Interventions to improve Professional behavior to serve the needs of the poor and vulnerable:
i. Generics only precribing in government facilities and by government health workers
ii. Required use of generic terminology in all transactions including precribing for health workers and reimbursing for
PHIC
e. Interventions to regulate prices
i. Imposition of Maximum Retail Prices
28
ii. Drug Price Monitoring by the Government

US lobbied against Cheaper Medicines Act
PUBLISHED ON SEPTEMBER 16, 2011

15 5ShareThis23Email3

By INA ALLECO SILVERIO
Bulatlat.com
Main Story: Wikileaks bares extent of US interference in Philippine affairs
Sidebar: US admits role in opposing Sison’s exclusion from terrorist List
From September 19, 2005 to January 15, 2010, dozens of cables were sent to the US Department of State from
Manila regarding the disputes in the Philippines concerning Intellectual Property Rights (IPR) and the pricing
mechanisms of pharmaceutical drugs.
Former senators Manuel Roxas introduced the “Cheaper Medicines Act,” in November 2005. The bill was said to be
a response to the high cost of pharmaceuticals in the Philippines relative to the rest of Asia. It originally sought to
lower the cost of drugs and increase competition among pharmaceutical manufacturers primarily by making it
easier for the producers of generic drugs to access the proprietary data of patent holders; prohibiting the granting of
patents for new uses of existing drugs; permitting parallel imports of patented pharmaceuticals; and applying the
principle of international patent exhaustion to shorten the terms of certain Philippine-issued patents.
According to the website Knowledge Ecology International, the controversial cables constantly lied about the IPR
norms in the TRIPS agreement. It said that much of the US advocacy in the Philippines was done in close
cooperation with Pfizer.
“The Department of State often claims that TRIPS requires patents on new uses of old drugs or data exclusivity, but
this is not true. The US Department of State also implies in several cables that parallel trade (importing the patent
owners’ own product that was placed in the market in another country), is inconsistent with Trade-Related Aspects
of Intellectual Property Rights Agreement (TRIPS),” the KEI said.
29
The advocacy group also said the cables’ declarations that the Philippine government was simply trying to protect
poor people by calling for strong IPR monitoring was “incredible” given that “at the same time the Embassy and
White House trade officials are plotting against poor people.”
US companies worried about changes in PH pharmaceutical policies
In Kenney’s October 27, 2005 cable , she said US stakeholders are worried about possible changes in the
Philippines’ pharmaceutical policies.
She said US IPR rights holders are concerned about then Senator Manuel Roxas’ move to amend the Intellectual
Property Code with respect to patents and parallel imports for pharmaceuticals.
” Roxas’ proposal would change the IP Code so that the period of patent protection begins after the product has been
introduced anywhere in the world rather than just in the RP. Pharmaceutical companies believe that this will
essentially cut the time frame for patent protection in half to 10 years. The Roxas bill will also permit pharmacies
and other entities licensed to distribute pharmaceuticals to avail of parallel import schemes. Currently, only
government facilities and programs can legally import drugs from countries that do not provide patent protection,”
she Kenney. She then went on to say that the Embassy is seeking a meeting with Roxas to explain the US’ concerns
with the bill and its potential to weaken patent protection for pharmaceuticals.
Kenney said Roxas’ bill is especially troubling to U.S. pharmaceutical rights holders, which are trying to retain their
market share and profitability in the Philippines.
“While the bill taps into more flexible provisions in TRIPS, it may not offer enough protection for drug makers.
Passage of the bill would not reflect well on the Philippines’ efforts to improve IPR and be removed from USTR’s
Special 301 Priority Watch List, following its out-of-cycle review this January. U.S. pharmaceutical patent holders,
represented by PHAP, may defuse concerns about the high drug costs and the potential for an avian flu pandemic by
focusing on alternate ways to reduce the cost of medicine, and support information exchange and planning to
address any potential pandemic.
US lobbied against new use patents in drug industry
In a later cable dated Dec. 11, 2006 to the US Department of State,Kenney said Roxas and Quirino Rep. Junie Cua,
(the congressman who sponsored the Cheaper Medicines proposal in the House of Representatives), “agreed to
resolve US concerns.”US Trade Representative for Southeast Asian and Pacific Affairs David Katz had previously
30
met with the two lawmakers, and this was followed by another visit by an unnamed economic counselor Nov. 22 “to
lobby for the removal” of the two provisions of concern.
“He passed to both copies of the interagency-cleared non-paper identifying specific language changes,” the cable
said.
“He argued that while the Philippines has every right to take actions to benefit the health and economic
circumstances to its population, those actions must respect the obligations the country has signed and the rights of
the holders of patents.”
Kenney said both lawmakers then proceeded to review the language changes word per word in the presence of the
counselor.
“Both agreed that the current wording of the data exclusivity provision of the legislation is overly broad. Roxas
promised to resolve the problem in the Senate version and to provide us with the new language. Cua undertook to
consult with Roxas and others on changing the language of the House version,” she said.
The US, however, was unable to get all its agenda when the two legislators’ did not give in on the issue of “new use
patents.”
Kenney said the two noted that the “new use patents” was a controversial concept internationally, but they did not
agree that it was violative of the TRIPS. The two lawmakers refused to remove the provision from their bills, and
Cua even pointed out how India’s new patent legislation does not protect new use patents.
By December 8, however, Cua and the House committee on Trade amended the bill partially, resolving the US
concerns on data exclusivity.
Kenney was not satisfied saying that it would have been better if the bill used the new language they recommended.
“Nonetheless, we believe resolution of the data exclusivity issue brings this legislation a long way toward
acceptability. We will continue to work with legislators to ensure that new language on this point is acceptable, and
will continue to provide language to Washington agencies for their review as soon as it becomes available,” she said.
Despite the US’ efforts against its passage, Republic Act No. 9502, or the “Universally Accessible Cheaper and
Quality Medicines Act of 2008,” was passed. It was able to reduce by half the prices of 22 essential medicines, but
advocacy groups said the final law was “very much watered down” compared to the original proposal.
31
Afraid of Indian drug companies
According to reports, the US was worried about the possible entry of numerous Indian drug companies in the local
market.
Business reports state that India’s pharmaceutical companies comprise an estimated $8 billion industry and
growing at the rate of 7.7 percent annually. The indian drug industry currently ranks third in terms of volume of
production with a 10-percent share of the global pharmaceutical market, and 14th in value.
Indian drug companies also have the highest number of manufacturing plants approved by the US Food and Drugs
Administration (FDA) outside the United States. Currently over 200 facilities are FDA-approved. These same
companies today export their products to more than 65 countries (within regulated markets) and to the rest of the
world, including the Philippines. They have the largest number of Abbreviated New Drug Applications filed with the
US FDA. Many of these are already at Phases 2 and 3 study levels.
Allowing the entry of these companies may very well have the effect of bringing down prices of medicines in the local
market.
In a Mar 5, 2009 cable, Kenney said the Philippine press featured stories noting that drug prices have not fallen
since the Cheaper Medicines Act came into effect, and that this created pressure for more immediate action from the
government.
“However, the Philippine government must tread carefully and should not ignore Pfizer’s warning that it could
withdraw many drugs from the Philippine market if price controls are put into effect. Pfizer’s withdrawal of
medicines from Thailand following laws on compulsory licensing clearly demonstrates the risks. Post will continue
to remind Health Department officials that expecting pharmaceutical companies to sell products for less than it
costs to produce them could prove counterproductive,” she said.
UNCLAS SECTION 01 OF 03 MANILA 005068 SIPDIS STATE FOR EAP/EP, EB/IFD, EB/TPP/BTA/ANA,
EB/TPP/MTA/IPC STATE ALSO PASS USTR FOR BWEISEL AND DKATZ STATE ALSO PASS USAID, OPIC, USDA
TREASURY FOR OASIA FOR AJEWELL USDOC FOR 4430/ITA/MAC/DBISBEE USDOC PASS USPTO FOR
PFOWLER E.O. 12958: N/A TAGS: ECON [Economic Conditions], EFIN [Financial and Monetary Affairs], ETRD [Foreign
Trade], KIPR [Intellectual Property Rights], RP [Philippines] SUBJECT: USTR VISIT LAYS GROUNDWORK FOR
JANUARY SPECIAL 301 IPR OUT-OF-CYCLE REVIEW SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET
DISTRIBUTION ¶1. (SBU) Summary: USTR, Department of Commerce (DOC) and U.S. Patent and Trademark Office
(USPTO) officials, accompanied by econoffs, met with congressional leaders and GRP officials to discuss IPR protection and
the upcoming Special 301 Out-of-Cycle review (OCR). The GRP is keen to get off the Priority Watch List, but faces an uphill
battle. IPR enforcement agencies remain stalled by a general lack of authority and resources. Proposed special IPR courts alone
might not lead to improvement because appeals would place IP cases back into the old system. Recent proposed legislation on
pharmaceutical patents pose a weakening of a generally strong IP code. However, the Intellectual Property Office continues to
make progress and a visible decline in the overall availability of pirated and counterfeit goods were noted. Removal from the
Priority Watch List is a possibility, but more action is needed before January. End Summary. ¶2. (U) U.S. Trade Representative
32
(USTR) Director for Southeast Asia and Pacific Affairs David Katz, U.S. Department of Commerce (DOC) Deputy Director
David Bisbee and U.S. Patent and Trademark Office (USPTO) Senior Counsel Peter Fowler visited Manila October 16-17 to
meet with RP Congressional leaders and executive branch counterparts in preparation of an upcoming 301 IPR Out-of-Cycle
Review (OCR), which will determine whether the RP remains on the Special 301 Priority Watch List. The meetings focused
primarily on IPR protection and enforcement, although they touched on broader economic issues as well (reported in septel).
--------------------------------------------- -------------- IPR ENFORCEMENT HAMPERED BY LACK OF RESOURCES AND
AUTHORITY --------------------------------------------- -------------- ¶3. (SBU) Officials at the Optical Media Board (OMB) and
the Bureau of Customs expressed frustration with an overall lack of resources and authority. OMB reported that their staffing,
resources and budget remain constant, but that rapidly rising utility costs are taking a toll. Of their USD 428,000 dollar budget,
only about USD 89,000 is available after paying personnel and operating costs. The OMB proposes nearly doubling its staff
from 66 to 111 to effectively implement its mandate. For OMB, interagency cooperation is another stumbling block. Its
representative highlighted one recent case in which they tried to work with the National Bureau of Investigation (NBI), but the
planned raid ultimately failed because NBI acted without OMB. ¶4. (SBU). The IPR enforcement unit at the Bureau of Customs
is still in limbo. The unit was established in 2003, took one year to implement and still is not functional. The unit has no fixed
budget nor permanent staff. Currently, the unit is working with seven agents and one lawyer. Customs officials conservatively
estimate that they need at least seven lawyers and 25 to 30 agents to be effective. ------------------------- IPR COURTS ON THE
HORIZON ------------------------- ¶5. (SBU) The GRP's Supreme Court plans to implement three special IPR courts in metro
Manila soon, according to Ismael Khan, Chief of the Court's Public Information Office. Three judges will be designated with
exclusive criminal and civil jurisdiction over IPR cases. The Court does not plan to create a separate IPR appellate court;
existing appellate courts will accommodate IPR appeals so once a case is appealed, prosecutors will encounter long delays once
again. There are over 1400 IPR cases pending with 95 percent of cases concentrated in Manila. Khan commented that if the
caseload becomes too heavy, the Supreme Court will simply designate more IPR courts. Khan emphasized that it is important to
try and accomplish these changes within the existing judicial framework rather than through Congress as legislative initiatives
would be time consuming and possibly unsuccessful. ¶6. (SBU) Comment: For the GRP and the Supreme Court, creation of
IPR courts is a key initiative with respect to IPR. While the current initiative demonstrates progress, there is a risk that it could
become a bureaucratic reshuffling instead of a more permanent, effective legislative change. The fact that there is no provision
for a special IPR appellate court may render the IPR courts ineffective. End Comment. ---------------------------------------------
--------- U.S. STAKEHOLDERS WORRIED ABOUT PHARMACEUTICAL POLICY ---------------------------------------------
--------- ¶7. (U) In discussions with U.S. IPR rights holders, Katz, Fowler and econoffs heard concerns about a recent bill
sponsored by Senator Roxas to amend the Intellectual Property Code of the RP, with respect to patents and parallel imports for
pharmaceuticals. Roxas' proposal would change the IP Code so that the period of patent protection begins after the product has
been introduced anywhere in the world rather than just in the RP. Pharmaceutical companies believe that this will essentially
cut the time frame for patent protection in half to 10 years. The Roxas bill will also permit pharmacies and other entities
licensed to distribute pharmaceuticals to avail of parallel import schemes. Currently, only government facilities and programs
can legally import drugs from countries that do not provide patent protection. ¶8. (SBU) The Intellectual Property Office (IPO)
and Philippine pharmaceutical representatives co-sponsored a forum to discuss the Roxas bill, which by coincidence took place
just after the USTR/USPTO visit. Embassies were not invited, but preliminary reports indicate that the dicussion was heavily
biased toward the Roxas bill. The IPO told us that the discussion covered an "educational agenda." (Note: Embassy will closely
monitor developments on this proposed legislation as it is likely to become a key issue during the Special 301 review. Embassy
is seeking a meeting with Roxas to explain our concerns with his bill. End note.) ------------------- IPO INCHING FORWARD
------------------- ¶9. (SBU) Director General Adrian Cristobal of the IPO emphasized that the focal point now for the GRP's IP
strategy is the IP courts. IPO is also committed to automating its patent registration and creating a searchable database, which
will greatly enhance record keeping. IPO reports an annual four percent average increase in overall filing rates for patents and
trademarks. IPO officials are working with the Central Bank to implement an electronic patent filing system, which they hope
to have online next year. Cristobal noted that the majority of trademark applications are made by Filipino applicants with only
about ten per cent attributed to foreigners. ¶10. (SBU) Cristobal stated that GRP interagency cooperation is improving. IPO
now has a full-time secretariat chaired by a lawyer and regular case review SIPDIS meetings with prosecutors. Cristobal noted
that key people are beginning to recognize that piracy affects domestic producers. Cristobal mentioned that the National
Telecommunications Commission (NTC) is talking about forming its own IP unit, but IPO is working with them to try and keep
the IP function within IPO while possibly installing an IPO technical expert at NTC. ¶11. (U) USTR stressed to Cristobal that
the deadline for interested party submissions for the OCR is December 2 so that the review can be completed in January.
---------------------- THE VIEW FROM CONGRESS ---------------------- ¶12. (SBU) In a meeting with Senator Ralph G. Recto,
Senate Committee Chairman on Ways and Means, USTR stressed the importance of IPR protection to overall economic growth
and the investment climate. Recto's position was that the necessary laws have been passed and now it is a matter of
implementation. He stated that the GRP's actions demonstrate that they are fighting IPR violators. He added that he is not aware
of any large-scale production or manufacturing of pirated or counterfeit goods in the Philippines and that illegal goods found in
the Philippines come from Malaysia, China and other countries in the region. ¶13. (SBU) Econ Counselor, Commercial
Counselor, Katz, Fowler and Bisbee reviewed the IPR agenda at a private dinner with key members of Congress from the
House Committees on Trade and Industry, Appropriations, Public Information and Ways and Means. These members of
congress were concerned about how the Philippines' Priority Watch List status reflects badly on the investment climate. They
33
expressed interest in working with the GRP, especially the IPO, is supporting stronger enforcement as well as meeting with
industry representatives with a stake in better IPR enforcement. --------------------------------------------- ----- VISIBLE
REDUCTION OF COUNTERFEIT AND PIRATED GOODS --------------------------------------------- ----- ¶14. (SBU) The
USTR/USDOC/USPTO team met with the Intellectual Property Coalition, which includes Philippine industry representatives
who support stronger IPR measures, to discuss general IPR issues and tour a local shopping mall notorious for the sale of
counterfeit goods (including apparel, sunglasses, and cellular phones) and pirated optical media (DVDs, music CDs, and
computer software). While such goods are still widely available, USG officials noticed a decline in the overall quantity in
comparison to their first visit in February. A second mall visit the next day affirmed this impression. ------- COMMENT -------
¶15. (SBU) The visit by USTR, DOC and USPTO provided a good preliminary look at where the RP stands with respect to the
upcoming OCR. There is a real interest in the GRP, starting with the President, to get the RP off the Priority Watch List.
However, there are still some key concerns that need to be addressed, particularly the implementation of an effective IPR court
system and overall law enforcement. IP legislation is strong in the RP, but implementation is crucial. The team did see progress,
but it is not yet evident whether it is enough to justify removal from the Priority Watch List. The Roxas bill and its potential to
weaken patent protection for pharmaceuticals is concerning and will be monitored in coming weeks. In the meantime, the visit
heightened GRP awareness and emphasized the opportunities inherent in the upcoming OCR. JONES
UNCLAS SECTION 01 OF 02 MANILA 000468 STATE FOR EAP/MTS, EAP/EP, AND EEB/TPP/IPE STATE PASS USTR
FOR BWEISEL, RBAE AND KEHLERS STATE ALSO PASS USAID, OPIC TREASURY FOR OASIA USDOC FOR
4430/ITA/MAC USDOC PASS USPTO BANGKOK FOR JENNIFER NESS SENSITIVE SIPDIS E.O. 12958: N/A TAGS:
KIPR [Intellectual Property Rights], ETRD [Foreign Trade], EINV [Foreign Investments], ECON [Economic Conditions], RP
[Philippines] SUBJECT: PHILIPPINES CLOSER TO DRUG PRICE CONTROLS REF: 08 MANILA 2611 MANILA
00000468 001.4 OF 002 ¶1. (SBU) Summary. The Philippine Department of Health has listed 34 prescription medications that
will be subjected to price controls under the Cheaper Medicines Act (reftel) enacted last year. The main impetus for the rapid
imposition of price controls came from advocacy groups and non-governmental organizations. Local representatives of
international drug companies participated in consultations on maximum retail prices, but warn that some of the controlled
prices are lower than the costs of making the drugs, which could force them to withdraw many drugs from the Philippine
market. End summary. Health Department Chooses Drugs for Price Limits --------------------------------------------- --- ¶2. (SBU)
With the passage last year of the Cheaper Quality Affordable Medicines Act, and its implementing rules and regulations now in
effect, the Philippine Department of Health has begun listing drugs and medicines subject to its price controls. According to the
Philippine Health Department, the meeting of any one of four grounds may subject a drug to price controls. The first ground is
that the drug is at least four times as expensive in the Philippines as in other Association of Southeast Asian Nations (ASEAN)
countries. Second, the drug has fewer than four generic versions. Third, the original "innovator" brand must outsell generic
versions. The fourth is that a given drug is of "public health concern." ¶3. (SBU) Over the past two weeks, the Department of
Health has produced a provisional list of 34 drugs that will be covered by price controls. The Department indicated the final list
will be reduced to 25, and will be released by the end of March. As it currently stands, the list Post obtained includes anti-
diabetes drugs, including insulin; cancer drugs; antibiotics; asthma and blood pressure medications. We discussed the list with
an assistant to the Secretary of Health, who assured us that the listing has been open and transparent and has included
consultations with the pharmaceutical industry. There will be at least one more hearing on the list in which drug industry
representatives are expected to participate. Drug Companies Part of Talks but Are Worried --------------------------------------------
¶4. (SBU) We met with several directors of the Pharmaceutical and Health Association of the Philippines, the trade association
of foreign drug companies, who noted that the main impetus for the rapid imposition of price controls came from advocacy
groups and non-governmental organizations. While the Association acknowledged that it has been invited to consult with the
Health Department, it also noted that some member companies had not participated. The Association is also concerned that the
final list of drugs subject to price control may contain more than 25 medications. ¶5. (SBU) In addition, the Association asserts
that the Health Department has been pressuring companies to sell drugs in small packages that can retail for 100 pesos, or
around USD 2, offering to exempt such drugs from price controls. In many cases, this can amount to a handful of tablets needed
for one cycle of a course of doses. Representatives of Pfizer warned us that for certain antibiotics, small doses can promote
antibiotic-resistant bacteria, and claimed that it is being pressed to sell antibiotics that currently cost over 1000 pesos for the
100-peso fixed price. Pfizer said that if these price controls are put into effect, it will withdraw many drugs from the Philippine
market. Comment ------- ¶6. (SBU) The Philippine press has recently featured stories noting that drug prices have not fallen
since the Cheaper Medicines Act came into effect, creating pressure for more immediate action from the government. However,
the Philippine government must tread carefully and should not ignore Pfizer's warning that it could withdraw many drugs from
the Philippine market if price controls are put into effect. Pfizer's withdrawal of medicines from Thailand following laws on
compulsory licensing clearly demonstrates the risks. Post will continue to remind Health Department officials that expecting
pharmaceutical companies to sell products for less than it costs to produce them could prove counterproductive. MANILA
00000468 002.3 OF 002 Kenney
34
UNCLAS SECTION 01 OF 02 MANILA 005447 SIPDIS Sensitive STATE FOR EAP/MTS STATE PASS TO USTR FOR
BWEISEL AND DKATZ STATE PASS TO USAID FOR CDOWNEY USDOC FOR 4430/ITA/MAC/DBISBEE USDOC
PASS TO USPTO FOR PFOWLER, KHAUDA E.O. 12958: N/A TAGS: ECON [Economic Conditions], ETRD [Foreign
Trade], KIPR [Intellectual Property Rights], BEXP [Trade Expansion and Promotion], RP [Philippines] SUBJECT:
PHARMACEUTICAL PATENT PROTECTION ON THE CHOPPING BLOCK Sensitive but Unclassified - Not for Internet -
Protect Accordingly. ------- SUMMARY ------- ¶1. (SBU) Senator Manuel Roxas, Chairman of the Senate Committee on
Economic Affairs and the Committee on Trade and Commerce, introduced a bill last month proposing amendments to the RP's
Intellectual Property Code (IP) that could significantly weaken intellectual property rights protection for pharmaceutical
products. The bill would further liberalize the compulsory licensing provision, allow the "early use" of patented drugs by
potential generic manufacturers, and expand parallel importation. Committee hearings on SB2139 are scheduled to start this
week. Embassy has written to Roxas expressing our concern and are trying to meet with him at the earliest opportunity. End
Summary. ------------------------------------------- SENATE BILL WEAKENS DRUG PATENT PROTECTIONS
------------------------------------------- ¶2. (U) Senator Manuel ("Mar") Roxas, Chairman of the Senate Committee on Economic
Affairs and the Committee on Trade and Commerce, introduced a bill last month (SB2139) to amend the Intellectual Property
Code (IP) of the Philippines. Based on conversations with GRP officials and industry representatives, Embassy understands that
the bill proposes three major changes that could significantly weaken intellectual property rights protection for pharmaceutical
products. First, it would liberalize compulsory licensing by immediately allowing exceptions when drugs or medicines are to
"protect public health." Current compulsory licensing provisions involve a lengthy bureaucratic process. Since the law's
inception in 1998, only four cases have been filed. ¶3. (U) Second, the bill includes an "early use" provision that would allow
the experimentation, production and registration of a patented drug and its data before the expiration of the patent. This would
permit manufacturers to make and sell the drug as a generic immediately after patent expiration. Current law provides patent
protection for a product from the date of patent approval in the Philippines, provided that the patent application is filed within
one year of the product's introduction to the world market. The Roxas proposal would nullify any advantage to filing a local
patent in the Philippines and reduce the overall period of patent protection. ¶4. (U) Third, the Roxas bill would allow parallel
importation of drugs and medicine by the government, again under the umbrella of "public health," upon application to the
Intellectual Property Office (IPO), regardless of whether the imported product is protected by a local patent. Currently, parallel
imports are not allowed for products under patent protection in the Philippines. The Roxas proposal, therefore, expands parallel
imports by eliminating local patent protection on imported medicines. In addition, the bill prohibits the ability of a rights holder
to apply for an additional patent for a "new use" discovered for a drug with an existing patent.
------------------------------------------ DIVERGENT VIEWS ON PATENT PROTECTION NEEDS
------------------------------------------ ¶5. (SBU) In mid-October, the GRP co-sponsored a forum on public health with the
Philippine Chamber of the Pharmaceutical Industry (PCPI), a local industry advocacy group composed of Philippine generic
manufacturers, to "examine flexibilities" in the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) with
respect to patents, including compulsory licensing, early use provisions, and allowances for parallel importation. Although
Embassy was not invited to the event, the Pharmaceutical and Healthcare Association of the Philippines (PHAP), an industry
association with members holding U.S. patent rights, said the forum was attended by pharmaceutical industry representatives,
officials from the Department of Trade and Industry, Department of Health and the Bureau of Food and Drugs, the Chair of the
House Committee on Trade and Industry, and the Vice-Chair of the House Committee on Health. ¶6. (SBU) Ireneo Galicia,
Deputy Director General at the Intellectual Property Office, told Econoff that the Roxas bill was "mentioned" at the forum and
a "brief description of the salient points of the bill" was provided. According to Galicia, Senator Roxas sees patents as the main
cause behind high medicine costs. However, one of the forum briefing papers, submitted by IPO itself, expressed "a growing
concern that the TRIPS standards for intellectual property rights may have negative implications with regard to affordability
and access to medicines, especially in the Philippines." Galicia commented that Roxas does not necessarily take into account
other factors such as production prices. Galicia noted that the IPO tried to "disabuse" attendees of the notion that patents are the
only problem. He said the forum helped Roxas understand there are other ways to reduce medicine prices. Galicia still expects
committee hearings to move forward on the Roxas bill, however. ¶7. (SBU) Representatives from Pfizer and from PHAP had a
completely different assessment of the forum, expressing dissatisfaction with the way it was organized and a general feeling
that the cards were stacked against patent holding pharmaceutical companies. PHAP indicated that industry representatives,
aside from those of the local PCPI, were given very little time to speak and felt that their views were not heard. Pfizer expressed
similar concerns, noting that it seemed like the forum was organized so as to garner support for the Roxas bill rather than to
provide a balanced discussion of alternative ways to reduce medicine costs. ¶8. (SBU) Overall, Galicia said the forum
highlighted the need for the IPO to revisit pertinent rules and regulations, as well as business processes, in order to improve
overall efficiency and effectiveness. Specifically, IPO needs to reexamine whether "issued patents are of good quality"
(meaning that IPO is issuing patents appropriately) and whether rules are being applied uniformly. In the meanwhile, SB2139
will move forward to committee hearings this week. Rumor has it that Representative Ferjenel Biron, Vice-Chair of the House
Committee on Health, intends to file a counter-bill in the House that closely models the Senate version. ¶9. (U) Embassy has
written to Senator Roxas expressing USG concern with the legislation and Econ Counselor has requested a meeting with him to
underscore these concerns. ------- COMMENT ------- ¶10. (SBU) The Roxas bill is especially troubling to U.S. pharmaceutical
rights holders who are trying to retain their market share and profitability in the Philippines. While the bill taps into more
flexible provisions in TRIPS, it may not offer enough protection for drug makers. Passage of the bill would not reflect well on
35
the Philippines' efforts to improve IPR and be removed from USTR's Special 301 Priority Watch List, following its out-of-cycle
review this January. U.S. pharmaceutical patent holders, represented by PHAP, may defuse concerns about the high drug costs
and the potential for an avian flu pandemic by focusing on alternate ways to reduce the cost of medicine, and support
information exchange and planning to address any potential pandemic. JONES
ZCZCXRO0159 OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB DE RUHML #0468/01 0640550
ZNR UUUUU ZZH O 050550Z MAR 09 FM AMEMBASSY MANILA TO RUEHC/SECSTATE WASHDC IMMEDIATE
3389 INFO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE RUCPDOC/USDOC WASHDC IMMEDIATE
RUEAWJB/USDOJ WASHDC IMMEDIATE RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION IMMEDIATE
Hide header UNCLAS SECTION 01 OF 02 MANILA 000468 STATE FOR EAP/MTS, EAP/EP, AND EEB/TPP/IPE STATE
PASS USTR FOR BWEISEL, RBAE AND KEHLERS STATE ALSO PASS USAID, OPIC TREASURY FOR OASIA
USDOC FOR 4430/ITA/MAC USDOC PASS USPTO BANGKOK FOR JENNIFER NESS SENSITIVE SIPDIS E.O. 12958:
N/A TAGS: KIPR [Intellectual Property Rights], ETRD [Foreign Trade], EINV [Foreign Investments], ECON [Economic
Conditions], RP [Philippines] SUBJECT: PHILIPPINES CLOSER TO DRUG PRICE CONTROLS REF: 08 MANILA 2611
MANILA 00000468 001.4 OF 002 ¶1. (SBU) Summary. The Philippine Department of Health has listed 34 prescription
medications that will be subjected to price controls under the Cheaper Medicines Act (reftel) enacted last year. The main
impetus for the rapid imposition of price controls came from advocacy groups and non-governmental organizations. Local
representatives of international drug companies participated in consultations on maximum retail prices, but warn that some of
the controlled prices are lower than the costs of making the drugs, which could force them to withdraw many drugs from the
Philippine market. End summary. Health Department Chooses Drugs for Price Limits --------------------------------------------- ---
¶2. (SBU) With the passage last year of the Cheaper Quality Affordable Medicines Act, and its implementing rules and
regulations now in effect, the Philippine Department of Health has begun listing drugs and medicines subject to its price
controls. According to the Philippine Health Department, the meeting of any one of four grounds may subject a drug to price
controls. The first ground is that the drug is at least four times as expensive in the Philippines as in other Association of
Southeast Asian Nations (ASEAN) countries. Second, the drug has fewer than four generic versions. Third, the original
"innovator" brand must outsell generic versions. The fourth is that a given drug is of "public health concern." ¶3. (SBU) Over
the past two weeks, the Department of Health has produced a provisional list of 34 drugs that will be covered by price controls.
The Department indicated the final list will be reduced to 25, and will be released by the end of March. As it currently stands,
the list Post obtained includes anti-diabetes drugs, including insulin; cancer drugs; antibiotics; asthma and blood pressure
medications. We discussed the list with an assistant to the Secretary of Health, who assured us that the listing has been open
and transparent and has included consultations with the pharmaceutical industry. There will be at least one more hearing on the
list in which drug industry representatives are expected to participate. Drug Companies Part of Talks but Are Worried
-------------------------------------------- ¶4. (SBU) We met with several directors of the Pharmaceutical and Health Association of
the Philippines, the trade association of foreign drug companies, who noted that the main impetus for the rapid imposition of
price controls came from advocacy groups and non-governmental organizations. While the Association acknowledged that it
has been invited to consult with the Health Department, it also noted that some member companies had not participated. The
Association is also concerned that the final list of drugs subject to price control may contain more than 25 medications. ¶5.
(SBU) In addition, the Association asserts that the Health Department has been pressuring companies to sell drugs in small
packages that can retail for 100 pesos, or around USD 2, offering to exempt such drugs from price controls. In many cases, this
can amount to a handful of tablets needed for one cycle of a course of doses. Representatives of Pfizer warned us that for
certain antibiotics, small doses can promote antibiotic-resistant bacteria, and claimed that it is being pressed to sell antibiotics
that currently cost over 1000 pesos for the 100-peso fixed price. Pfizer said that if these price controls are put into effect, it will
withdraw many drugs from the Philippine market. Comment ------- ¶6. (SBU) The Philippine press has recently featured stories
noting that drug prices have not fallen since the Cheaper Medicines Act came into effect, creating pressure for more immediate
action from the government. However, the Philippine government must tread carefully and should not ignore Pfizer's warning
that it could withdraw many drugs from the Philippine market if price controls are put into effect. Pfizer's withdrawal of
medicines from Thailand following laws on compulsory licensing clearly demonstrates the risks. Post will continue to remind
Health Department officials that expecting pharmaceutical companies to sell products for less than it costs to produce them
could prove counterproductive. MANILA 00000468 002.3 OF 002
With Cheaper Medicine Bill, Still No Access to Low-Cost Essential Medicine
BY KILOSBAYAN PARA SA KALUSUGAN

DEMOCRATIC SPACE
Posted by Bulatlat
Vol. VII, No. 45, December 16-22, 2007
36
The 14th Congress is wrapping up legislative measures on CHEAPER MEDICINE with the Senate finishing ahead as it
approved on third hearing Senate Bill 1658. The lower house is still to approve House Bill 2844, a consolidation of 23 house
bills. Both houses of Congress promised to “bring prices of essential medicines” within the reach of the people through the
legislation of the bill on cheaper medicines.
But can the Cheaper Medicine Bill really lower the prices of medicine?
While the legislation of the Cheaper Medicine Act is a positive development, we at the KilosBayan para sa Kalusugan (KBK)
are not very optimistic that the people will really have access to low-cost essential medicines through the much-boast about
Bill. However, while our senators and congressmen take pride of the bills they passed and are still deliberating on in the lower
house, we believe that both versions of the bill failed to significantly address and solve why prices of medicines in the country
are very expensive and how their prices may be significantly lowered.
In the comprehensive and strategic sense, the Cheaper Medicine Act does not make any single mention about the need to
develop our own national drug industry.
Scientific research, development and manufacture of local essential drugs could not flourish given the present restrictions on
trade and lack of government support.
One of the most decisive steps in really lowering the prices of medicine is to develop our own national drug industry just like
what India and Pakistan have done in the last 10 years.
The KBK is disappointed that the Cheaper Medicine Bill did not tackle the problem.
The house bill sponsored by party list representatives of Bayan Muna proposes provisions on supporting the local drug
manufacturers by giving them tax incentives but this, we fear, will not even pass inclusion to the final version of the house bill.
The Cheaper Medicine Act is silent about the control of multi-national corporations in the marketing, distribution and pricing of
medicine.
Sadly, we at the KBK feel that the proposed amendments to some sections of the IPC are still to a large degree protective of the
interests of the transnational drug firms. We are disappointed that the Cheaper Medicine Act did not stand for the people on
crucial TRIPS-WTO issues such compulsory licensing and selective parallel importation of essential medicines after extensive
government testing for safety and efficacy.
The creation of a Drug Price Regulatory Board could be one crucial step in lowering the prices of medicine.
The creation of a Drug Price Regulatory Board is one of the concrete short-term solutions proposed by KBK in regard lowering
(read: controlling TNC-dictated high prices) of essential medicines.
KBK fears that with the aggressive lobbying of drug TNCs the House Bill will surely encounter rough sailing. We therefore
challenge the members of the House of Representatives to resist the TNC pressure and stand for the interest of the people.
However, KilosBayan para sa Kalusugan believes that on the whole, the Cheaper Medicine Act that is now in the final process
of being enacted into a law WILL NOT deliver on its promise of really providing cheaper medicines for the people.
Once again, KilosBayan para sa Kalusugan reiterates the following recommendations:
Strategically, access to essential medicines can only be ensured by formulating a comprehensive pro-people national policies
and programs that will:
· Develop a self-reliant national drug industry that is responsive to the medical and health needs of the people.
· Develop the technology to refine and extract raw materials and chemicals.
· Tap the medicinal potential of indigenous and herbal plants in the Philippines through government-sponsored research and
development.
· Develop a self-reliant industry to provide the essential medicines needed by the people.
37
While working towards the long term solutions stated above, it is also important to undertake immediately do-able measures to
make medicines low-cost, safe, and effective, such as:
· Regulate prices based on the production cost and reasonable profit.

· Selective parallel importation of essential medicines after extensive government testing for safety and efficacy.
· Assert compulsory licensing.
· Implement National Drugs Policy and Generic Law.
· Provide incentive to local drug manufacturers to ensure production of medicines (i.e. tax holiday, tax exemption, reduction of
VAT, etc.).
· Create a transitory drug price regulatory board with the following characteristics:
o Life span of 3-5 years
o Represented by stakeholders (i.e. academe, consumers, health professionals, etc.)
o With independent selection process
KilosBayan para sa Kalusugan/posted by Bulatlat
(UPDATE 2) Arroyo signs cheaper medicines law

By Lira Dalangin-Fernandez
INQUIRER.net
First Posted 10:38:00 06/06/2008
Filed Under: Congress, Legislation, Laws, Consumer Issues, Government, Health, Medicines
STA. CRUZ, Laguna -- President Gloria Macapagal-Arroyo signed here on Friday a new law that aims to bring down the price
of medicines by encouraging more competition in the local market through parallel importation of cheaper but quality drugs.
Republic Act 9502, or the "Universally Accessible Cheaper and Quality Medicines Act of 2008," also seeks to help the local
generics industry by amending the Intellectual Property Code and strengthening the regulatory powers of the Bureau of Food
and Drugs against substandard medicine.
"We all know about the importance of the Generics Law before but it was incomplete, and now with the cheaper medicines and
quality bill we have completed, I believe, our legislative reforms in bringing affordable medicines to the people," Arroyo said in
a brief message after signing the new law
She directed the Department of Health (DoH) to come up with the implementing rules and regulations within 120 days.
The agency, for its part, said the new law would allow it to expand a program to deliver cheap medicines to the grassroots.
"With the signing of this Act, the DoH is put into high gear to further accelerate efforts to expand Botika ng Barangay
[Drugstore of the Villages] outlets with the goal of 15,000 outlets nationwide by 2010," Health Secretary Francisco Duque said
in a statement.
Although listed as a priority measure by the Legislative Executive Development Advisory Council (LEDAC), the cheaper
medicines bill was bypassed by the 13th Congress due to lack of time and quorum.
Congress finally ratified it in April this year.
But the measure's passage came after months of intense debates amid alleged efforts by pharmaceutical firms to delay, water
down, or archive the bill.
For it to get the nod of the lawmakers, especially members of the House of Representatives, Arroyo also agreed to remove a
"generics only" provision that would have required physicians to only prescribe the generic names of drugs.
Arroyo said the measure was part of government efforts to make medicines affordable to the people, especially the poor already
burdened by high prices of oil, electricity, and food.
38
In an interview after the signing, the law?s principal author, Senator Manuel Roxas II, said the measure will remove all
roadblocks towards parallel importation of medicines.
He also said safeguards are in place to prevent the proliferation of fake drugs.
The other senators present at the signing were Pia Cayetano and Ramon Revilla Jr. Several congressmen also showed up for the
ceremony.
With the new law, any individual or organization registered with the Bureau of Food and Drugs may import medicines and sell
them cheap to the public.
Other salient features of the new law include:
? Prohibition of the grant of new patents based only on newly-discovered uses of a known drug substance;
? Allowing local generics firms to test, produce and register their generic versions of patented drugs, so these can be sold right
upon patent expiry ("early working principle");
? Allowing the government use of patented drugs when the public interest is at stake;
? Giving the President the power to put price ceilings on various drugs, upon the recommendation of the Secretary of Health.
These drugs include those for chronic illnesses, for prevention of diseases, and those on the Philippine National Drug
Formulary (PNDF) Essential Drug List;
? Strengthening the Bureau of Food and Drug Administration so that it could ensure the safety of medicines, by allowing it to
retain its revenues for upgrading of its facilities, equipment and human resources; and
? Ensuring the availability of affordable medicines by requiring drug outlets to carry a variety of brands for each drug,
including those sourced from "parallel importation," to give the consumer more choices
Consumers group finds Cheaper Medicines Law no better than a placebo
PUBLISHED ON JUNE 3, 2011

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A 2008 study of the Consumers Action for Empowerment and the Health Action Information
Network concluded that a single course of antibiotics amounts to three days’ worth of wages; not
much has improved since then.
By MARYA SALAMAT
MANILA – A consumers’ group observed the third anniversary of Cheaper Medicines Law by delivering to the
government and to its health department, in particular, a “Kalabasa” or Squash award, in the hope that the
government’s eyesight would improve to help it see the dire situation of public health in the country more clearly. “It
39
is sad to think that the health department itself is the one promoting higher-priced medicines,” said Robert
Mendoza, secretary-general of Alliance of Health Workers (AHW).
Mendoza aired this accusation as he criticized the government for having continuously slashed the budget of public
hospitals over the years. Mendoza said “the DOH knows there are no more medicines in its hospital pharmacies,
forcing patients even the poorest ones to go out and cough up money for medicines. But its prices, said Mendoza,
remained too high for ordinary Filipinos because the government has failed to cut it down despite the Cheaper
Medicines Law and its high-profile populist 50-percent reduction in prices of too few medicines a couple of years
ago.
Robert Mendoza, secretary-general of Alliance of Health Workers, said “It is sad to think that the health department
itself is the one promoting higher-priced medicines,” (Photo by Marya Salamat / bulatlat.com)
In a brief picket in front of the health department in Manila, members of the Consumers Action for Empowerment
(CAE) took turns explaining why the RA 9502 or the Universally Accessible Cheaper and Quality Medicines Act of
2008 is a failure. They said it did not “democratize access to essential medicines” in the country. Some local drug
manufacturers think it has benefited only some of the upper middle class to upper class who can buy medicines.
Medicines still out of reach
Because of “the poor’s plunging purchasing power,” the CAE said “majority of Filipino consumers still could not
afford to buy life-saving drugs.” Until now, said Eleanor Nolasco, spokesperson of CAE, “few Filipinos can feel the
price cuts in medicines.” Sean Vilchez, a nurse working at the Philippine Orthopedic Center and deputy secretary
general of Health Alliance for Democracy (HEAD), lamented that until now, many of their patients are “under-
medicated, with some dying because of lack of medicines”.
AHW member in a rally in front of DOH
CAE gives government kalabasa award for failing to cut prices of drugs. (Photos by Marya Salamat / bulatlat.com)
The consumers’ group dismissed the “token increase” in the minimum wage in the National Capital Region (NCR).
They said the P22 emergency cost-of-living allowance hardly raised the real value of the minimum wages that is
worth only P248 today when compared to 2000 prices. Unfortunately, the NCR wage rate practically serves like a
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ceiling amount for setting the wage rates in other parts of the country, even if prices of goods there are the same
with those in NCR, if not higher like that of oil products.
The CAE reminded the public that in their study with Health Action Information Network in 2008, a single course
of antibiotics amounts to three days’ worth of wages. But because the wages did not substantially increase while the
prices of most medicines did not substantially decrease, not much has improved in terms of accessibility of
medicines, the consumers’ group said.
Drug industry still foreign-dominated
Three years ago when RA 9502 or Cheaper Medicines Law was enacted, the CAE had immediately seen its major
failings which they predicted would ultimately render it useless. Based on these failings, they foresaw its tragic
failure in meeting its avowed goal of bringing down prices of medicines in the country.
Dr Geneve Rivera, secretary-general of HEAD, said, during their protest in front of the DOH, that far from
developing the local drug industry that could have helped reduce drug prices, the law has “even paved the way for
further commercializing medicines and medical services.” She traced this to the fact that RA 9502 did not raise a
finger in removing the stranglehold in the country’s drug industry of foreign pharmaceutical corporations.
Consumers group finds Cheaper Medicines Law no better than a placebo

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The RA 9502 is “so toothless we won’t even demand for its implementation,” said Rivera.
Only five percent of the country’s drug industry is composed of Filipino small businesses in manufacturing and
packaging medicines, Rivera estimated. “And always, they are in danger of folding up because of lack of government
support,” she added.
The leading and largest group of pharmaceutical companies in the Philippines, the Pharmaceutical Association of
the Philippines (PHAP), is 90-percent composed of multinational or foreign companies, and only 10-percent comes
from Filipino drug companies, based on an estimate of EdwardIsaac, former president of all-Filipino Philippine
Chamber of Pharmaceutical Industries (PCPI).
41
CAE rally at DOH on 3rd anniv of RA9205.(Photo by Marya Salamat / bulatlat.com)
The few relatively big Filipino drug companies such as Unilab and Pharex,which lead in local production of generic
drugs, have varied working arrangements themselves with the bigger foreign drug companies, especially in
distribution as these bigger foreign-controlled companies have broader distribution networks in the country.
Mr Isaac said in an interview that for local drug companies to achieve a high 50-percent share of the local drug
market, “We need to strengthen further our fundamentals. This means continuous improvement in quality,
marketing and R&D” (research and development).
While the consumers’ group CAE is demanding price cuts in drugs, among others, in this country known for selling
medicines at its most expensive prices in Asia, most pharmaceutical companies would rather the government seek
ways to raise the paying capacity of patients, for example through strengthening Philhealth and implementing
“universal health care.” This, in a nutshell, only means making the able-bodied, working Filipinos pay for their less
healthy and lower-income fellow citizens, via regular payment of increasing social health insurance fees.
Kalabasa award goes to government & DOH for failing to cut down the price of medicines despite the Cheaper
Medicines Law. (Photo by Marya Salamat / bulatlat.com)
The so-called universal health care through Philhealth is still at a very early stage though. The coverage of financial
protection according to Philhealth last February hardly reaches five in every one hundred “target population”. As
such, amidst calls to lower drug prices, the government under former president Gloria Macapagal-Arroyo tried to
look populist a couple of years ago and imposed price cuts in less than 21 essential medicines, in an industry that
sells as much as 3,500 pharmaceutical brands.
In the face of imminent price cuts, drug companies under PHAP voluntarily slashed prices of some of their
medicines even as they complained of cuts in profits. Meanwhile, the few Filipino drug companies who are mostly
into generic or off-patent drugs complained that they were forced also to slash prices, when they were in fact already
in the business of selling lower-priced medicines. They seem also to be hurt by the blanket parallel importation of
cheaper drugs that had been approved by the government.
At present the Philippines is importing lower-priced generic drugs even if some of these are in direct competition
with its nascent generic drug industry, which, incidentally, are being made to operate under stricter European-like
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requirements. Filipino drug industry leaders have been known to boast that they manufacture generic drugs of
superior quality.
The drugs industry is “a very fertile ground for capitalist profits because people will always try to reach for
medicines for their loved ones” said Dr Rivera. But for as long as the Philippines remains “hamstrung in policies and
agreements of the World Trade Organization (WTO), its government has no sincerity in truly developing its local
drugs industry,” said Rivera. She denounced also the persistent lack of funding for local drug research and
development.
Needed first aids
The consumers’ group CAE reiterated their long-time recommendation of creating a Drug Price Regulatory Board –
a salient point of the draft Cheaper Medicines Bill that former Senator Mar Roxas had cut out before approving the
bill. CAE said that drug prices could be made lower if such a Board was constituted.
CAE also reiterated their demands for the government to support local drug manufacturers, to impose a selective
parallel importation of drugs for starters, and to give local drug manufacturers a tax holiday.
The consumers’ group also demands free medicines to be made available in all public hospitals.
On June 7, the Consumers’ Action for Empowerment together with other people’s health groups said they will
march from the University of Sto. Tomas to Mendiola at 9am “to register the people’s discontent over RA 9502 and
to raise people’s awareness on the real causes of expensive prices of medicines.”
2. Cheaper Medicines Law - The enactment in 2008 of the “Universally Accessible Cheaper and Quality
Medicines Act” (R.A. 9502) and in 2009 of the “Food and Drug Administration Act” (R.A. 9711), were
important milestones in laying the foundation for improving the quality and reducing the prices of
medicines. The “Cheaper Medicines Act” confers on the President the authority to regulate the price of
medicines and drugs and empowers the DOH Secretary to establish a drug price monitoring and
regulation system. Pursuant to this Act, the President issued Executive Order (E.O.) 821 (made effective
August 15, 2009) prescribing the maximum retail prices (MRP) – also known as government mediated
access prices (GMAP) – for selected medicines that address some diseases which are common causes of
morbidity and mortality in the country. The E.O. covered only five active pharmaceutical ingredients
including some antihypertensive, antibiotics, and anti-neoplastics/anti-cancer.
At the same time, some manufacturers negotiated with the government to reduce prices of selected
products voluntarily, rather than fall under mandatory price regulation. The DOH approved voluntary
price reductions of up to 50 percent for 16 molecules (or 41 drug preparations) in August 2009, and a
further 97 products in 2010. However, voluntary price reductions apply only to the products of
participating manufacturers, not to alternative suppliers of generic substitutes. The DOH has
established a process for monitoring and evaluation of the impact of these measures.
Initial feedback has identified a number of concerns: (i) the selection of products for price restraint does
not follow rational selection principles (for example, not all first line treatments for hypertension or
asthma are covered); (ii) the level of price reductions is arbitrary (surveys have found Philippines prices
43
for originator brands to be over 15 times higher than international reference prices, and even lowest
cost generics 5-6 times international reference prices); (iii) the scheme may reduce generic competition
and publicize brand-name medicines (for many of the products there is a much cheaper, quality generic
substitute available); (iv) PhilHealth cannot use voluntary price reductions in its reimbursement of
18
medicines because they apply to specific manufacturers only; and in aggregate, the medicines falling
under the scheme account for a relatively limited share of the market.
Ricochet: The myth of cheaper medicines

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Written By: Rene Ezpeleta Bartolo
Tuesday, 20 March 2012
Category: Opinion
On June 06, 2008, former President Gloria Arroyo signed into law amid fanfare general elation Republic Act No. 9502 or the
“Universally Accessible Cheaper and Quality Medicines Act of 2008.”
There was a common sigh of relied all over the land because at long last the Filipino faced the welcome prospect of buying
medicines at cheaper prices, free from the whimsical manipulation by multinational drug companies.
Four years after it was signed into law, the law has failed to touch substantially the lives of our countrymen.
So, we ask: “Have special interests groups succeeded in derailing the implementation of this law?” Apparently, they have.
A study conducted by the Senate committee on trade and commerce headed by Senator Manuel Villar has shown that four years
after the ratification of Republic Act No. 9502 or the “Universally Accessible Cheaper and Quality Medicines Act of 2008,”
prices of some medicines have yet to go down.
The study was presented before the bicameral hearing of the quality affordable medicine oversight committee on Monday.
The study demonstrated alarming results, among them:
Of five drugs included in the study, only the price of one has decreased since 2008 — and it was not even because of the law.
Of the five, only the hypertensive drug Norvasc had a cost reduction because of the removal of the patent protection and not
because of the law.
The other four had skyrocketed in cost since 2008: Plendil, which cost P23.76 before the passage of the Cheaper Medicine Law
is now P32.25; Ventolin (inhaler), which used to be P352 is now P432.50; Ponstan, which used to be P26 is now P29.75; and
Bactrim, which used to be P17 is now P33.75.
Villar said it is “possible” that pharmaceutical companies had a hand — through intensive lobbying — in drafting the
Implementing Rules and Regulations (IRR) of the law, which Villar said is “defective.”
Villar said his committee would invite health officials who drafted the IRR to the third bicameral hearing.
If the law has failed to deliver its promise to provide cheaper and quality medicines to Filipinos it is largely because the
government has failed to muster the political will to go against transnational drug companies.
Republic Act 9502 was ostensibly the law that would correct the “scandalous anomaly” in a country as poor as the Philippines,
where medicines and drugs are among the costliest in Asia.
Consumers’ groups told reporters “because of its many flaws, RA 9502 has failed to bring down the “inhumane” prices of drugs
and medicines.” The groups trace the uselessness of the law largely to its failure to break “the control of transnational
corporations on all aspects of the [drug] industry.”
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Estimates put the share of transnational companies in sales alone of medicines and pharmaceuticals in the Philippines from 68
to 72 percent. In 2008, pharmaceutical sales in the country amounted to P116 billion.
According to the group, RA 9502,also failed because, although between 80 and 90 percent of essential drugs being sold in the
Philippines are no longer patented, the law did not provide for the development of a sound local drug industry that could have
taken advantage of the fact that previously patented medicines can now be developed by local manufacturers.
The groups likewise criticized the policy of dependence being fostered by RA 9502, which gives particular focus on drug
importation, including parallel importation.
According to the Philippine International Trading Corporation (PITC), the trading and importing arm of the government, drugs
that can be imported from India or Pakistan can be sold at half the price in local pharmacies.
And finally, the strongest indication of government insincerity in the implementation of the cheaper medicines law is that in an
industry that is worth P10 billion annually, the government allots only P1 billion for parallel importation.
The cheaper medicines law is a myth, an empty dream.
It is an indictment against a government that bends before foreign business interests.
(For comments and reactions, email: renebartolo.rico@ymail.com)
Poor and Sick Filipinos Pay Dearly for Failure of Cheaper-Medicines Law

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By MARYA SALAMAT
Bulatlat
MANILA — A law that was supposed to provide cheaper and quality medicines to Filipinos has failed to deliver on
its promise — a promise that was hamstrung by the law’s own defects and the seeming inability of the government to
muster the political will to go against transnational drug companies, according to health and consumer advocates.
Called “The Universally Accessible Cheaper and Quality Medicines Act of 2008,” or Republic Act 9502, the law
sought to correct what many called a scandalous anomaly in a poor country like the Philippines, where medicines
and drugs are among the most expensive in Asia.
The law “proved to be irrelevant and useless,” said Dr. Gene Nisperos, vice-chairman of the Health Alliance for
Democracy (HEAD) in a conference last week. “In hospitals, whether private or public, prices of medicine have not
changed with this law,” he said.
45
Because of its many flaws, RA 9502 has failed to bring down the “inhumane” prices of drugs and medicines, said the
Consumers’ Action for Empowerment (CAE) .
Amid the usual finger-pointing and bickering, the CAE said that the Department of Health (DOH) isn’t the only
party accountable for the failure. “Although we’re in agreement that the Senate and other government fora should
take the DOH to task for its failure in implementing the law, we’ve been saying that the law itself has inherent
flaws,” Nisperos said.
TNC Control
The consumer group traces the uselessness of the law largely to its failure to break “the control of transnational
corporations on all aspects of the [drug] industry.” Estimates put the share of transnational companies in sales alone
of medicines and pharmaceuticals in the Philippines from 68 to 72 percent. Last year, pharmaceutical sales in the
country amounted to P116 billion.
Health and consumer advocates proteting the high price of medicine. (Photo by Marya Salamat / bulatlat.com)
According to the group, RA 9502, signed by President Arroyo on June 6, 2008, also failed because, although
between 80 and 90 percent of essential drugs being sold in the Philippines are no longer patented, the law did not
provide for the development of a sound local drug industry that could have taken advantage of the fact that
previously patented medicines can now be developed by local manufacturers.
CAE criticized the policy of dependence being fostered by RA 9502, which gives particular focus on drug
importation, including parallel importation.
While it would seem that consumers can benefit from parallel importation, it actually discourages the development
of the local drug industry. In fact, RA 9502 has not shown any support to local manufacturers, said Eleanor Nolasco
of Health Action Information Network (HAIN). Eventually, it will kill the Philippine pharmaceutical industry, she
said.
Moreover, the law failed to make sure that parallel importation, such as it is, will redound to the benefit of poor
Filipinos.
Parallel Importation
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Under parallel importation, the same drug that is manufactured and priced high in the Philippines can be imported
– with or without the consent of the patent owner — from another country and sold here for prices that are several
times lower than the ones produced locally. This is a method that transnational drug companies like Pfizer oppose
because it obviously cuts their profits in countries where drugs are expensive, like the Philippines.
At first glance, parallel importation seems beneficial to consumers. But, according to the health-advocacy group
KilosBayan Para sa Kalusugan, this is not necessarily true.
According to the Philippine International Trading Corporation (PITC), the trading and importing arm of the
government, drugs that can be imported from India or Pakistan can be sold at half the price in local pharmacies.
But KilosBayan, in a primer, said these imported drugs can be sold at a much lower price. It cited Ponstan
(mefenamic acid), which can be bought in India for the equivalent of P2.58 and in Pakistan P1.29. And yet, the same
pain killer is sold for P11.25 in the 10,000 or so Botika ng Barangay outlets set up by the Arroyo administration,
which promised half-priced medicines. Ponstan is sold for P25 pesos in commercial pharmacies.
“Why set the reduction of prices at just half of commercial prices when this could be lowered even more?”
KilosBayan asked in its primer, citing the prices in India and Pakistan.
KilosBayan said parallel importation has not been maximized to the advantage of consumers. In fact, according to
the Council for Health and Development, a health NGO, “the provisions on parallel importation bear no significant
impact on the prices of medicines because even before the passage of the law, parallel importation is utilized by the
government in its Botika ng Barangay program.”
Besides, the government only allots P1 billion for parallel importation — in an industry that is worth P100 billion.
Drug Cartel
Another major factor why the cheaper-medicine law failed to make a dent on the high cost of drugs and medicines is
the fact that, according to data from the PITC, 80 percent of drugs being manufactured for multinational
47
corporations is done by one company. Moreover, as much as 70 percent of wholesale distribution is handled by a
sister company.
In the end, according to CHD, “more than 60 percent of the retailing of finished products is sold through Mercury
Drug, which has more than 600 outlets nationwide.”
In other words, there’s an existing cartel of drug manufacturers and distributors that continue to dominate the
market despite RA 9502. Indeed, one of the law’s biggest defects is it did not provide for the creation of a regulatory
board for drug prices – a board that could have broken the stranglehold of this cartel — despite the strong clamor
and recommendation of health-sector representatives and people’s organizations during public hearings when the
law was still being crafted.
As a result, the law squandered an opportunity to promote democratic representation of consumers and other
stakeholders that in turn could ensure the law’s intent is being followed. Currently, the task of monitoring medicines
being sold in the country lies with the Bureau of Food and Drugs, an agency under the DOH that progressive health-
sector representatives judged as weak.
The RA 9502 gives President Arroyo the power to impose price caps on retail prices of drugs and medicines but she
has not exercised that power.
In fact, on the first anniversary of RA 9052, leaders of the Pharmaceutical and Healthcare Association of the
Philippines (PHAP) personally thanked President Arroyo for the government’s support in ensuring that their
business would remain “viable.”
PHAP executive director Reiner W. Gloor thanked President Arroyo for assuring them that “we religiously
implement laws that uphold patent protection.” PHAP, an industry lobby group, is largely composed of
multinational drug manufacturers and providers of most of the country’s patented medicines.
Generic Drugs
The domination of the local drug industry by TNCs also has an impact on the affordability of medicines and on the
campaign to lower prices through the prescription of generic drugs. But because not all drugs and medicines have
their respective generic counterpart, the situation remains dire.
According to CHD, there are about 600 drugs in the Philippines that are considered essential. But of this number,
only 200 are being produced by Philippine companies. The other 400 off-patent drugs, meanwhile, do not have local
generic counterparts and are also dependent on importation, the CHD said.
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This partly explains why the use of generic drugs is low in the Philippines. In 2006, for instance, generic drugs
account for only five percent of medicines sold locally while in other countries such as in the United states, there was
a recorded 50 percent generic-drug use.
Token Legislation
Although the intent of RA 9502 is to address the problem of expensive medicines, critics said it has unfortunately
become an example of token legislation because it did not support the local drug industry and it did not enable the
health sector to monitor its own pharmaceutical policy. This much is clear among the young health workers.

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In a rally by nurses demanding an increase in their entry-level salary grade, the health workers criticized the
government’s disproportionate response to the AH1N1 or swine flu epidemic. They said that other diseases which
are far more common and deadlier – for example tuberculosis or diarrhea — have largely been ignored.
“Despite the so-called cheaper-medicines law, we haven’t brought down the incidences of poverty-related diseases.
Instead, morbidity and mortality rates have even increased,” Nolasco, of HAIN, said. She cited the still widespread
malnutrition. “It’s not only fatal, it can also cause learning difficulties and disabilities,” Nolasco said.
To this day, said Nolasco, diarrhea still kills; cholera has returned; pneumonia, broncho-pneumonia, and other
illnesses that had been supposedly controlled years ago, are showing up again. There is also a resurgence of malaria
and dengue cases, she said.
Apart from rising death rates due to poverty-related diseases, or diseases that sprung and became fatal because of
lack of proper nutrition and sanitation, among others, Nisperos of HEAD also cited the nil impact of the law on the
second biggest health problem of Filipinos — chronic diseases such as hypertension.Though prevention is better, it
is still a given that people today are contracting chronic diseases. “Once you are stricken with it, you’re forced to be
under medication for the rest of your life,” Nisperos warned. It thus becomes all too important for people to be able
to buy their needed medicines.
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Without discounting the number of the dying, Nisperos called attention to the growing number of people now who
can’t function well because of their failure to acquire medicines for their chronic illnesses. “We’ve been saying for a
long time — our peoples’ inability to access their needed medicines don’t just result in many untimely deaths, it also
results in many suffering pain instead of becoming healthy, productive citizens.” There are more people, Nisperos
said, “whose illnesses get worse because they can’t buy the medication they regularly need.”
And being a member of PhilHealth won’t help either, Nisperos said. “Further illustrating the inutility of the cheaper-
medicine law, it didn’t even get PhilHealth’s cooperation, as PhilHealth doesn’t cover medicines for chronic diseases
such as hypertension, diabetes, and heart ailments.
RA 9502, in other words, “has absolutely no impact on health services,” Nisperos said. (Bulatlat.com)
Botika ng Barangay drug prices can still be lower

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14 April 2009
By JAN MARCEL RAGAZA and ALLIAGE MORALES
ONE of the most common drugs sold over the counter is the headache and fever tablet paracetamol, which costs P2.74 in
commercial outlets. At the government-run Botika ng Barangay (BnB), paracetamol costs just a fifth of that at only 50
centavos.
Other drugs are as affordable to impoverished Filipinos at the BnB—the anti-diarrhea loperamide for P1.05 against P4.10 in
private drugstores, and the anti-diabetes glibenclamide at 78 centavos against P8.90.
But even though medicines are cheaper at BnB outlets, these community drugstores have failed to gain a foothold in the drug
market. The botikas number 12,000 against the 700 or so Mercury Drug outlets, but their market share is only 5 percent as
against Mercury’s 60 percent. Unable to make a dent, health experts doubt whether the BnB program can pull down drug prices
to half of 2001 levels, as it aims to by next year.
One problem is that the industry is still very much dominated by big pharmaceutical companies that dictate drug prices and
promote branded medicines. Another problem is that BnB stores are inefficiently run enterprises that are no more than medical
sari-sari stores, where
procurements are irregular, unsystematic
and even overpriced.

As cheap as they are, drugs sold by the BnB
could cost even less. The government
is in fact buying drugs at prices two times
higher than the international price index set by
the World Health Organization as suppliers,
middlemen and government agencies
make layers of profit on these
procurements.
President Gloria Arroyo launched the BnB

program shortly after assuming the presidency
in 2001, her own version of the community-
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based drugstore that started out as Botika sa Barangay (BSB) during the Marcos years. The program aims to improve access to
medicines and promote the use of generic drugs as cheaper alternatives to expensive branded medicines.
The main purchaser and supplier of drugs for the Department of Health and the BnB is the Philippine International Trading
Company Pharma Inc. (PPI). PPI is a government corporation Arroyo created to procure drugs locally or abroad to enable the
BnB program to sell “half-priced medicine.”
PPI supplies the DOH with 21 essential drugs, among them paracetamol for aches and loperamide for diarrhea. But this
investigation shows that 16 of these drugs can be cheaply bought from 11 other wholesale drug distributors at 9 to 48 percent
less.
Big markups
Interviews with a dozen sources as well as reports from the Commission on Audit and the National Statistics Office, DOH
administrative orders and academic studies also reveal that the BnB program has been weighed down by violations of
procurement laws and bureaucratic inefficiencies.
The DOH procurement plan and the COA report for 2007 show that based on the prices of six drugs, PPI adds markups of
anywhere from 20 to as much as 107 percent.
The price of a 5-milligram glibenclamide tablet more than doubled from 29 to 60 centavos in the DOH price list set by the PPI.
The 2007 DOH price list showed that the price of a 500-milligram paracetamol tablet was 39 centavos. The PPI originally
pegged its price at 29 centavos, with a 58 percent profit margin going to the state company. Yet when the League of
Municipalities bought a dozen types of branded medicines from PPI, the markup was only 15 percent, the COA noted.
The final price that consumers pay for their purchases in BnB outlets includes the allowable 30 percent markup of BnB
operators, markups from the PPI itself ranging from 20 to 107 percent, and markups from local suppliers with whom the state
company is doing business and manufacturers from whom the distributors get their products. In all, the markups jack up the
original price of generic drugs by a low as 50 percent to as high as 150 percent.
PPI is a self-sustaining state company surviving on sales and not on government subsidies, said Joe Cortez, its vice president
for sales and marketing. It has been borrowing money to finance procurement programs and is in fact in the red.
The DOH’s Administrative Order 144 issued in 2004 allows BnB operators to purchase from DOH-accredited suppliers or
directly from the PPI when it is more advantageous. Cortez admitted, however, that some drugs might be priced higher than
others because of “cross subsidy.” PPI loses when it sells certain drugs at prices that the DOH sets below market standard but
recovers losses through higher markups on other drugs. Cortez said the DOH sets the price range when it prepares its bidding
plan for the drugs it procures.
“There was a time when we bought amoxicillin at P2.05, (but) sold it to the DOH at only P1.70 just to complete the whole
package of the 19 products. You will have to look at the total package because the 20- to 25-percent markup is an average of
the whole package,” he added.

The standard markup, Cortez said, includes 7 percent for warehousing, 5 percent for VAT and 18 percent for operating costs.
“Well, there is a 6.5 percent distribution fee, but we’re not putting all those costs because we are sort of doing a cross subsidy,”
said Cortez.
Cortez acknowledged that the PPI prices may be higher than those of 11 drug suppliers interviewed for this report. “I will not
deny (about the costly PPI drugs) for the reason that it is true. We are not entertaining companies without CGMP (current good
manufacturing practice certification from the Bureau of Food and Drugs),” he said.
Cortez added: “I don’t want to say that (other suppliers’ products) are substandard. At least in (our products), the consumers are
assured of quality. Not all drugs are (with) CGMP.”
According to 2008 records, drug procurement from the PPI amounting to about P80 million was subject to a 10-percent VAT,
further raising drug prices.
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Aside from the tax imposed on the drug purchases from the PPI, the DOH also paid 10-percent VAT for the drugs it bought the
Philippine Institute of Traditional and Alternative Health Care (PITAHC), an attached agency that manufactures herbal drugs,
lagundi and sambong that are also sold in BnB outlets.
Lapses in procurement
Health Undersecretary Alexander Padilla said the DOH allows “different” kinds of procurement. He clarified, however, that
local government units, and not the DOH regional offices, are designated to hold public bidding for stock re-orders.
Administrative Order 144 requires DOH regional centers for health development (CHD) to conduct a centralized bidding twice
a year to accredit competent suppliers who offer the best quality of drugs for BnB operators at the lowest possible price. The
order does not prescribe sanctions in case of violations.

With the CHD’s go-signal, operators can negotiate directly with their chosen suppliers, in violation of Republic Act No. 9184,
or the Government Procurement Reform Act, which stresses competitive bidding as the mode of procurement. Even then, BnB
operators cannot influence price setting because they buy in limited quantities, defeating the purpose of pulling down the prices
of drugs at a most affordable level.
One operator in Quezon City confirmed that the DOH regional office lets operators in Metro Manila purchase stocks on their
own. When capital is finally revolving, operators rely heavily on private suppliers for re-orders as long as the outlet exists.
Julio Garcia, coordinator of the BnB program in Metro Manila, reasoned that conducting biddings entails too much work from
the regional offices—preparations of bidding rules and documents, publication of bidding to the awarding, all of which need
financial and human resources.
Garcia also disclosed that some officials of DOH regional offices banded together at one convention of DOH representatives in
2007 and acted as a sort of middlemen in procuring suppliers for BnB operators, saying their regions have few suppliers.
Transactions such as these, he said, are prone to corruption and abuse.
The COA castigated the DOH regional offices for failing to establish a revolving fund for stock replenishment authorized under
the general appropriations law. In the Cordillera Administrative Region and Northern Mindanao, state auditors discovered that
operators obtained stock from nonaccredited suppliers, provincial health teams and “ambulant vendors,” including motorcycle-
riding retailers.
Meanwhile, an analysis of the DOH price list and WHO price reference shows that DOH drug purchases are on the average two
times higher than the international price index, an indication of the government’s inefficiency in drug procurement.
Cortez said PPI imports only branded, not generic, medicines from India. Generic drugs are procured locally and sold to DOH
and other government units with some profit margin.
A check with the Medclik drug price reference in India, however, reveals that prices of nine of the 12 drugs available for
comparison can be bought 30 to 391 percent cheaper than the DOH-procured drugs.
Wasting money?
Problems have dogged the BnB program from the very beginning. A World Bank study, for example, found the P20-million
budget for drugs in 2002 “too big” for the 300 botika outlets established at the time. The bank said the government was wasting
money in an outlet with an absorptive capacity of only P5,000.
According to informants for the study, the P25,000 capital the DOH invests in each BnB outlet is not enough to sustain the
outlet.
“Wala ‘yon. Masyadong maliit (It’s nothing. It’s too small),” said one supplier, adding that the P25,000 can only purchase 100
boxes of amoxicillin. This results in incomplete lists of drugs. The supplier said that around P200,000 to P300,000 capital is
needed to start a small drugstore business like the BnB.
Delayed procurement and stock shortages also threaten the financial viability of the program.
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Around 200 BnB outlets have closed since the program started in 2001 because of flawed management and bankruptcy. This
translates to at least P5 million losses in capital seed.
Despite the problems, Padilla is confident that the BnB program has attained its goal of reducing drug prices through aggressive
competition. Based on the price comparison made by the DOH, drug prices were supposedly reduced by as high as 95 percent,
even exceeding the goal since the program was introduced.
Indeed, former health secretaries and experts believe that reduction in prices is in sight. But they also said that as long as big
pharmaceutical companies remain dominant and dictate prices and in the process monopolize the market, the government’s
efforts to regulate prices of essential, life-saving drugs through the BnB and other programs will be dwarfed.
Former Health Secretary Jaime Galvez Tan said government must address the imbalance. The problem is, he said, “wala lang
talagang guts eh, walang political will (It has not guts, no political will).”
(The authors are senior journalism students of the University of the Philippines. This two-part report is an abridged version of
their thesis, which was done under the supervision of UP journalism professor and VERA Files trustee Yvonne Chua.)
Cheaper Medicines Act signed into law
July 10,2008
Republic Act No. 9502, popularly called the Cheaper Medicines Act,
was signed into law on June 6, 2008. The law was enacted with the
avowed objective of promoting and ensuring access to affordable and
quality drugs and medicines for all.
Under the new law, the President of the Philippines, upon the
recommendation of the Secretary of Health, may impose maximum
retail prices over certain essential drugs and medicines, whenever the
President determines that the situation warrants such price regulation.
In recommending the maximum retail price, the Secretary of Health
will consider the retail prices of regulated drugs and medicines in the
Philippines and in other countries, the supply in the market, and the
cost to the manufacturer or seller.
Administrative fines may be imposed by the Secretary of Health on

those who would sell above the approved maximum retail price, while
acts of price manipulation of drugs and medicines, such as hoarding,
profiteering, or illegal combination or forming a cartel, are criminal
offenses punishable by imprisonment or fine, at the discretion of the
The new law also amended certain important provisions of the

Intellectual Property Code of the Philippines (Republic Act No. 8293):
- The Director General of the Intellectual Property Office is authorized

to grant compulsory licenses for the exploitation of a patented
invention, either by manufacture or through parallel importation, even
without the permission of the patent holder. In addition to the grounds
for the grant of a compulsory license as provided under the Intellectual
Property Code, the new law provides that the license may also be
issued when the demand for patented drugs and medicines is not being
met to an adequate extent and on reasonable terms. It should be noted,
however, that Section 100.6 of the Intellectual Property Code still
requires that the patentee “be paid adequate remuneration taking into
account the economic value of the grant or authorization.” Furthermore,
Section 26 of the Intellectual Property Code precludes the grant of
53
pharmaceutical patents for the “mere discovery of a new form or new
property of a known substance which does not result in the
enhancement of the known effect of that substance.” The rationale for
this provision is that newly discovered uses of old pharmaceutical
inventions should not be considered inventive where it does not involve
an “inventive step.” The familiar example is the new use of Viagra for
erectile dysfunction years after its use as a hypertension medicine.
- Section 72 of the Cheaper Medicines Act abolished the “national

exhaustion principle” in favor of the “rule of international exhaustion”
of patent rights. Under the national exhaustion principle, it would
constitute infringement for anyone to import patented pharmaceutical
products into the country without the authorization of the patent holder,
who may in effect restrict the use of its pharmaceutical products for its
commercial advantage. However, the adoption of the “international
exhaustion” rule enables the government to authorize or permit the
importation of patented pharmaceutical products without infringing the
right of importation by the patent holder where it has itself made the
patented pharmaceutical product available anywhere else in the world,
in effect liberalizing the importation of these products.
- A patent owner may no longer prevent third parties from testing,

using, making or selling the patented drugs and medicines, as well as
related data, if these are done solely for the application and issuance of
approvals by Philippine government regulatory agencies. This
liberalized rule allows generics drug companies to test and register their
generic version of a patented drug with the Bureau of Foods and Drugs
in anticipation of the expiration of the patent protection on those
products. Under this liberalized rule, the making and use of generic
versions of patented pharmaceutical products – which would normally
be acts of infringement without the patent holder’s authorization –
would no longer be infringing activities since the purpose is only to
enable the generics manufacturers to produce generic equivalents as
soon as they can, which they can commercially sell and exploit on day
one of the expiration of the patent protection.
The Cheaper Medicines Act also provides that no court, except the
Philippine Supreme Court, may issue a temporary restraining order or
preliminary injunction to prevent the exercise of the President’s power
to impose maximum retail prices over drugs and medicines or the IPO
Director General’s grant of a compulsory license to import.
08 August 2007, MakatiCity – The Intellectual Property Office of the Philippines (IP Philippines) today
announces its support to the passage into law of the Cheaper Medicines Bill in the 14th Congress.
The bill seeks to amend provisions in Republic Act No. 8293 or the Intellectual Property Code of the
Philippines pertaining to non-patentable inventions (section 22), limitation of patent rights (section
72), use of invention by government (section 74), and limitations on rights conferred to trademark
owners in cases of importation of medicines (section 147).
This is following the call of President Gloria Macapagal-Arroyo urging Congress to enact the bill in her
State of the Nation Address (SONA), and various cause-oriented groups rallying behind it.
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“By clarifying particular patent provisions in the IP Code, the bill balances the health interest of the
Filipinos on one hand and the rights of patent owners on the other hand,” Atty. Adrian S. Cristobal,
Jr., Director General of IP Philippines, said. “These proposed amendments modernize our 60-year-old
patent system to make the law more responsive to the health care needs of our people in the 21st
century,” Cristobal added.
Since 2005, IP Philippines has been pushing for intellectual property reforms detailed in the National
Intellectual Property Policy Strategy (NIPPS). The office recently concluded a four-day validation
workshop for the preliminary report it conducted on the current IP situation in the country. Close to
150 participants attended the workshop, representing various sectors in the fields of law, economics
and sciences.
“One amendment to the proposed law provides access to affordable medicines abroad priced lower
than their counterparts in the Philippines. This is consistent with the Agreement on Trade-Related
Aspects of Intellectual Property (TRIPS) administered by the World Trade Organization (WTO), which
the country acceded to. The bill, however, also balances the rights of patent owners since these are
upheld in the amended provisions,” Cristobal added.
Other countries that have acceded to the TRIPS Agreement include the United States, the European
Union, Japan and other developed nations.
IP Philippines through its Bureau of Patents (BoP) provides the registration and grant of patent for
inventions. A patent is a legal right granted by the government to a patent owner to exclude others
from using the patented item for a specified period of time in exchange for patentable information
and disclosure.
From 2003 to 2006, IP Philippines received a total of almost 11,000 patent applications. The office
also granted close to 3,000 applications from 2003 to 2007.
An invention must embody a technical solution to a problem, with the solution offered fulfilling the
following criteria: it must be new, involves an inventive step, and possesses industrial applicability. A
patented invention is protected for 20 years from the filing date of application, and this cannot be
renewed.
Cheaper Medicine Act: The Challenge to Pharmaceutical Industry in Exercising Economic Freedom
Posted by knowledgesource under Business, Knowledge Management, Pharmaceutical, Quality Management, Technology
Management
[2] Comments
This article was recently published by The American Chamber of Commerce of the Philippines in the AmCham Business
Journal April 2010 Issue (Cover Story).
Almost 2 years ago, the pharmaceutical industry in the Philippines faced greater challenges when the President of the
Philippines, Her Excellency Gloria Macapagal Arroyo signed into law the Republic Act No. 9502: Universally Accessible
Cheaper and Quality Medicine Act of 2008. Some of the important points of the implementing rules and regulations of the Act
that affected the pharmaceutical industry were the following:
First, it amended the Republic Act No. 8293: The Intellectual Property (IP) Code which allows local generic medicine
manufacturers to test, produce and register their generic versions of patented drugs so that these could be sold immediately
upon the expiration of the patents. Furthermore, to prevent the owners of patented drugs from extending the term of their
patents by declaring newly discovered uses for the components of their drugs, the law prohibits the grant of new patents using
this provision.
Second, the law now allows the conduct of parallel importation of patented medicine from other countries such as Pakistan and
India where the prices are significantly lower than the prevailing price in the Philippines. In addition, even the Republic Act
No. 6675: The Generics Act of 1988 and Republic Act No. 5921: The Pharmacy Law were also amended in support to R.A. No.
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9502 and the President has now the power to impose price ceilings on various drugs such as for chronic illnesses and other life
threatening diseases.
The law primarily aimed to bring affordable and quality medicines to the general public and that the government is determined
to prove that health comes first before business.
With this law, both the local and multinational pharmaceutical firms were faced a greater challenges both on how to keep the
business going and still comply to the new law. Most common strategy is to bring down the operational cost of producing the
medicines. Digging deeper, what makes the price of these drugs high? Primarily, the drug development itself gets the bigger
share of the pie where research and development requires extensive studies for discovering new drugs and new applications.
That’s where patent comes into play. Pharmaceutical companies have their patents on drug discoveries to primarily protect the
technology involved and recover the high cost of investments. In the context of the amendment on the IP Code, this greatly
upsets the industry. Recently, there have been some controversies between pharmaceutical firms with regards to patents
reflecting conflicts and different issues on the patent rights.
On the second important note, with the parallel importation, the competition on the industry were intensified with more players
coming around where price becomes now the key basis (with the assumption of quality being a constant).
Philippines being a member of the ASEAN Free Trade Area (AFTA), where the agreement is to increase competitive edge as a
production base in the world market and to attract more foreign direct investments to the country, this will revolutionize the
name of the game of the multi-national and even local players of the industry. On the other hand, this also breaks the monopoly
of the pharmaceutical industry in the spirit of competition and will open a new game where innovation and entrepreneurship
comes into play which in turn will give greater market flexibility . In the end, the consuming public will have more choices and
better pricing scheme because of the greater number of sources made available to them.
New Rx needed for generics movement
Hailed as a landmark piece of legislation almost two decades ago, Republic Act No. 6675 — more popularly known as the
generics law — has unfortunately suffered from years of lax implementation.
by Alecks P. Pabico
Wednesday, September 27th, 2006 · Share this story
AMONG ALBERTO Romualdez Jr.’s saddest experiences as a physician, one that he says he continues to encounter, involves
his regular trips to the drugstore. “You cannot miss this scene,” shares Romualdez, who was the health secretary during the
brief presidency of Joseph Estrada. “Somebody with a prescription, say for antibiotics for one week, comes up to the sales clerk
and pleads, ‘This is the only money I have. Is it possible to buy just one or two tablets or whatever this amount can afford?’”
In this issue:
 We’re back!
 New Rx needed for generics movement
 It’s not easy being generic
 An illness in the family
 Podcast – Bipolar disorder: A daughter breaks her silence
 Stress and the Filipino
 And now, hospitals as tourist spots
 Your health at your fingertips
 High-quality healthcare on the cheap
 Tempest in a (feeding) bottle
 Podcast – The wonders of breastfeeding
“The poor,” he continues, “will spend all their money, give as much as they can bear, which is usually too much for them
especially if it concerns catastrophic illnesses.”
Romualdez laments how medicines, including essential, life-saving ones, are priced way too steep beyond the reach of ordinary
Filipinos. It’s an anomaly that he blames primarily on unregulated free-market forces that wreak havoc on the country’s
healthcare system.
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Indeed, compared to the demand side, the supply side — the pharmaceutical industry — is so dominant that it can dictate
whatever price it wants. As a result, next to Japan, the Philippines has the highest drug prices in Asia. It’s almost as if the
country had no law aimed precisely at bringing down the cost of medicines to levels the masses could afford.
Table 1: Comparative Retail Prices of 100 Units (Tablets/Capsules) of 12 Commonly Used Drugs in Five Developing
Asian Countries and Canada, July-September 1995 (in US$)
Source: Issues Concerning High Drug Prices in the Philippines by Prof. Joseph Lim (1997)
DRUG NAME
STRENGTH (in mg)CANADA INDIA INDONESIA NEPAL PAKISTAN PHILIPPI
Amoxycillin
Cotrimoxazole
Odofenac
Erythromycin
Erythrocin
Table 2: Price Comparison of Selected Generic Drugs between the Philippines nd Selected ASEAN Countries (in PhP)
Source: A Comparative Study of Drug Prices in the Philippines and in ASEAN Countries by DOH and
DTI (1999)
DRUG NAME PHILIPPINES THAILAND INDONESIA
Penicillin G
Rifampicin
Nifedipine
Tetracycline
Glibenclamide
Pyrazinamide
Amoxicillin
Chloramphenicol
Cotrimoxazole
Prednisone
Mefenamic Acid
Metronidazole
In 1988, though, the Philippines, ahead of everyone else in Asia, enacted a law on generics in consonance with the national
drug policy of the then fledging democracy under President Corazon Aquino. Helping usher in an era of social-reform
measures, Republic Act No. 6675 sought to promote, require, and ensure the labeling, prescribing, and dispensing of medicines
using their generic names.
Eighteen years later, the consensus among stakeholders in the healthcare sector — government agencies, generic-manufacturing
companies, distributors, and nongovernmental organizations — is that the implementation of the landmark Generics Act has
been for the most part a blow hot, blow cold affair. No less than the health department admits that its enforcement has not been
that good.
“In fact, it’s somewhat dismal,” says health undersecretary Alexander Padilla. But then he also says the law itself is defective,
because he sees it as bearing the mark of the strong pharmaceutical lobby that insisted on the right of doctors to continue
prescribing branded medicines.
“While the law compelled doctors to issue generic prescriptions,” says Padilla, “it also allowed them to continue prescribing the
branded equivalent of their choice, the net effect of which has been to nullify generics altogether.”
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Dr. Eduardo Banzon, vice president of the government Philippine Health Corporation (Philhealth) and a health economist, does
not go as far as describing the generics law as flawed. But he agrees with Padilla that it has suffered from weak enforcement.
While consumers are now familiar with the generic names of several popular over-the-counter branded medicine such as
Tylenol (paracetamol) and Ponstan (mefenamic acid), he says that people still do not ask for the generic equivalents.
“How we’ve implemented the law hasn’t empowered consumers enough,” he says. “We need to push for it more.”
FOR SURE, despite Padilla’s misgivings, the crafters of the generics law had tried to cover all bases so that generic medicines
would have a fair chance in the market. Drugstores, for instance, were supposed to have a generics menu visible and accessible
to customers. They were also to remind consumers about available generic equivalents of branded medicines. Each doctor’s
prescription, meanwhile, had to have the generic name of every medicine a patient was told to take. Even medicine ads carried
a brand’s generic name.
Table 3: Cost Structure of Pharmaceutical MNCs

Source: Interview with a pharmaceutical company official
For every peso of the price of medicines that Filipinos buy, drug companies spend for the following:
NATURE
COST OF
DESCRIPTION
(inEXPENSES
centavos)
price of the medicine as bought by the subsidiary from its “mother company” based abroad
Product
(almost transfer
all the price
foreign drug companies are merely into distribution and no longer engage in
drug manufacturing in the country)
expenses incurred by drug companies for sponsoring doctors’ seminars, conferences and
Promotions
foreign trips, as well as advertisements and other endorsements to sell their products
Sales
mainly
forceforexpenses
the salaries, vehicles and other benefits provided to medical representatives
Distribution
discounts offered
costs to pharmacies and drugstores
Medical
clinicalexpenses
trials, market research and surveys
In the United States, which passed a generic-drugs law just four years ahead of the Philippines, generic drugs now have a 50-
percent market share. By contrast, so-called “true generics” still account for a measly three percent of nominal drug sales in this
country. Prices of branded medicines should decrease by 50-60 percent when a generic equivalent is introduced in the market
— but only if consumers start buying the latter in sizeable quantities, thereby putting a challenge before the branded-drug
makers.
That generic medicines are barely making a mark can in fact be traced largely to Padilla’s very own department. As it has
turned out, the implementation of the generics law depends on the zeal of who heads the Department of Health (DOH), which
monitors compliance with Generic Act’s provisions, particularly among doctors and drug outlets. (See status of compliance
with specific provisions of the generics law)
When Dr. Alfredo R.A. Bengzon headed DOH, a nearly 100-percent compliance rate was registered particularly among
government hospitals controlled by the department. At the time, the DOH put forth the vision of “health as a right” rather than a
privilege of the few.
This encouraging trend was more or less maintained when Dr. Juan Flavier Jr. (now in his last term as a senator) succeeded
Bengzon as health secretary. “He even had a (mascot), Eric Generic,” recalls Romualdez of Flavier’s effective media campaign
to promote generics.
Unfortunately, the health secretaries that came after Flavier — Dr. Hilario Ramiro Jr., Dr. Carmencita Noriega-Reodica, and
Dr. Felipe Estrella — did not seem to have given much attention to generics. Says Romualdez: “It was still part of the program,
and I’m sure they were all in favor of the generics law, but they were not too hot about it. Kaya medyo napabayaan (That’s why
it was neglected a bit).”
By the time he assumed the Cabinet post in 1998, Romualdez says the compliance rate had fallen below 50 percent. “So we had
to start all over again, always doing monitoring, asking for hospital records and so forth,” he says. “By the time I left (in 2001),
it was again at about 80 percent, more or less.”
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Today the situation appears to have returned to the post-Flavier years. Pastor Joseph Lee, manager of Botika Binhi, a
nationwide nongovernment village pharmacy initiative that has been around since the early 1990s, attests to the vigorous
promotion of generics and the support his organization received during Flavier’s time. But he rues that the enthusiasm of those
days has declined over the years. “It’s harder now,” he says. “We really feel the lack of support.”
Padilla, for his part, puts the compliance rate at 30 to 40 percent, “50 percent at the maximum,” which he attributes to poor
monitoring and weak penalties.
Penalties for violating the generics law include reprimands, fines, the maximum of which is P10,000, suspension of licenses of
doctors for a year at the most, and six months to a year behind bars. But Joshua Ramos, deputy director of the Bureau of Food
and Drugs (BFAD), says the perception is nobody really gets penalized, given that the government seems to be having a hard
time keeping track of what doctors, hospitals, drugstores, and pharmaceutical companies are doing.
IT’S EASY enough to see, though, what Filipinos are buying at pharmacies: branded medicines, not generics, despite the wide
gap in cost. In large part, this is because they are simply following their doctor’s orders — as much as their wallets would
allow, that is. Comments Ramos: “We place a lot of trust on our doctors. When they write down a brand name, we no longer
consider another option.”
Many doctors do list down generic names in the prescriptions, but most of them do not encourage patients to consider the
generic equivalent of the branded medicine they recommend. According to a 2002 World Bank report, this is true especially
among private doctors.
“Generic prescribing in the public sector appears to be the rule rather than the exception,” said the report, which looked at the
government’s generic-drugs promotion. “It is in the private sector where prescribing habits of doctors have hardly changed:
only about a third say they would advise generics to their patients.”
Blame a particular marketing practice by big drug companies, say some medical personnel. They say that the endorsement of
branded medicines in exchange for a whole gamut of favors — dinners, spa treatments, appliances, plane tickets, foreign trips,
etc. — from pharmaceuticals remains prevalent especially among the likes of internists and pediatricians who get to see patients
fairly regularly and prescribe medication.
“What these doctors are promoting is for people to become more stylish,” says an upset Romualdez. “It’s like branding in
clothes. That’s the whole issue of branding in health. In medicine, hindi dapat may branding as it should not be as important as
the actual cure.”
Yet most of the doctors interviewed for this article say it is really a matter of quality, which they say generics simply lack. One
doctor who used to work in public health, for example, says that while he prescribes generics to lower-income families to help
them afford the medication, it’s a different case when he treats patients with severe illnesses. “It has to be branded, otherwise
the patient might die,” he says.
A young doctor who trained at the Philippine General Hospital before pursuing private practice also admits to a certain “double
standard” in his prescriptions — he does not prescribe generics to his own family. Yet another clinician says that she relies
more on the more popular brand since they are already “tried and tested.”
But BFAD’s Ramos says that going by his agency’s laboratory analyses of branded and generics medicines, there is actually
not much difference. “The percentage conformity of generic drugs is even higher than that of branded medicines,” he says,
referring to results of BFAD’s tests conducted on drugs submitted to it from January to August this year.
BFAD is the government regulatory agency that ensures the safety, efficacy, and quality of pharmaceutical products, as well as
food, cosmetics, and other invasive devices (such as condoms, IUDs, pacemakers, implants, etc.) sold in the country.
Of the 1,235 generic drugs submitted to BFAD between January and August 2006, 1,138 (92 percent) conformed to the
agency’s standards while 11 (0.89 percent) failed; 81 (seven percent) are still being processed. Among the branded medicines,
3,000 (91 percent) met BFAD standards while eight (0.24 percent) did not; 275 (8 percent) are still being analyzed.
Ramos says any perceived difference in quality between branded and generic drugs is “really more of a marketing strategy to
condition the public’s mind that generic drugs, because they are cheaper, are inferior in quality.”
59
Last year, a multinational drug company even came out with an ad that had the line “kaduda-duda ang presyo (dubiously
priced).” The ad was actually part of an official campaign against fake drugs, but Ramos says it was misleading at the very least
since it seemed to imply that a low price tag makes a drug’s quality suspect.
Philhealth’s Banzon, however, says the credibility problem of generics also stems from government drug procurement fiascos.
He says many reports that reach him often involve substandard generics bought by public hospitals, as well as by national and
local government units. “The problem might be in the procurement process because government has to buy the cheapest price,”
he says, hinting at the possibility that the quality of medicines could be sacrificed because of cost considerations.
CHEAP OR not, one problem with generics is that “quality is a little bit more difficult to control,” admits avid generics
supporter Romualdez. “But,” he adds quickly, “it can be done with BFAD equipped with the proper people and technology.”
Table 4: Top 20 Ethical/Prescription Drugs

Source: May 2006 IMS Drugstore and Hospital Sales
* off-patent
SALES
DRUG
RANK NAME MANUFACTURER/DISTRIBUTOR
(January-May 2006, in +000 PhP)
Ventolin*
1,401,196 GlaxoSmithKline
1,190,016
Augmentin GlaxoSmithKline
Sanofi-Aventis
Plendiler* Astra Zeneca
GlaxoSmithKline
Intermed Marketing**
Neobloc* GX International**
Diamicron* Servier Phils.
GlaxoSmithKline
Astra Zeneca
Ciprobay* Bayer Pharmaceuticals
United Laboratories**
Astra Zeneca
Servier Phils
Zithromax
BFAD, however, is severely undermanned. Compared to the 44,333 licensed establishments it regulates, the agency has only
220 food and drug regulation officers (FDROs) nationwide. Of 48,416 registered products, the central office has only 32
evaluators, or a ratio of one evaluator for every 1,513 products.
The good news is that BFAD expects its request for an additional 400-plus staff approved soon. “We should be following the
optimum ratio between the number of employees and the products and establishments we regulate,” says Ramos, “so that we
maintain the credibility of the seal or certificate that we award to them.”
“The government should ensure that generic drug competitors are credible and viable,” insists Banzon. Once that happens,
doctors and their patients may stop looking at brands and price tags, as in the case of Neobloc, a generic equivalent of the high-
blood pressure medicine Betaloc (Astra Zeneca brand for metoprolol tartrate).
Neobloc, which is manufactured by GX, has been able to capture a healthy share of the market, says Banzon. “If there is
credible competition,” he says, “people will definitely go for the cheaper product.”
In the meantime, the government has been trying to offset the imbalance in generics distribution with its “Gamot na Mabisa at
Abot-Kaya (Effective and Affordable Medicine)” program. Aimed at halving the 2001 price of selected drugs by 2010, the
60
program has included parallel drug importations by the Philippine International Trading Corporation (PITC) benefiting 72 DOH
hospitals and three local government units.
Botika ng Bayan and Botika ng Barangay outlets nationwide to ensure accessibility and availability of low-priced quality
medicines have also been set up. As of last July, Botika ng Bayan branches — full-blown pharmacies located in cities and
municipalities — have reached 1,135. Botika ng Barangay outlets, which are limited to generic over-the-counter drugs and a
few selected prescription drugs, now number 7,004.
The PCIJ tried but failed to interview the Pharmaceutical and Healthcare Association of the Philippines (PHAP), which has
multinational drug companies among its members, in time for this article. PHAP, however, has been quoted in other media
reports as saying that forcing its members to lower prices “would discourage innovation in an industry where innovation is key
to discovering new cures for new diseases.”
“Losses that will be incurred by the pharmaceutical industry,” it said, “which may translate to profit for the generic drugs
industry, would, in the end, prejudice consumers in the form of less investments and research and development of better
medicines.”
Interestingly, PHAP has also said that the way to reduce medicine prices in the country is through strict implementation of the
generics law, not through parallel importations. It did not, however, elaborate any further on that.
UPDATE
THIS ARTICLE had already been published when PHAP replied to PCIJ’s written queries. Here are some of its answers, as
provided by Leo Wassmer Jr., CEO and executive vice president of the association:
PCIJ: PHAP has said that to reduce medicine prices, the government has to strictly implement the generics law. What exactly
do you mean by this?
PHAP: Cheap medicines are already available locally. In compliance with the Philippine National Drug Policy, the Department
of Health developed the “Essential Drugs List” which contains medicines “that satisfy the priority health care needs of the
population.”
The Essential Drugs List shows that in each therapeutic category there is a wide range of products a consumer could choose
from according to affordability.
Also, almost daily in many broad sheets and practically hourly on many radio programs are advertisements of cheap locally
manufactured essential medicines.
Despite the availability of cheap essential medicines, there are still some who claim that medicines are expensive because of the
absence of a public information campaign as required by Sections 5 and 11 of the Generics Act of 1988. Section 6 (d) of the
same law also requires drug stores to post a list of generic products with corresponding prices as reference for buyers. Not all
drugstores comply with this requirement. This is one of the reasons why consumers do not ask for generic equivalents.
PCIJ: The drug industry’s marketing practice supposedly has continued to influence doctor’s prescription habits, even with an
ethics review you’ve initiated. Is this a fair assessment?
PHAP: Physicians are well-trained, highly discriminating professionals who will prescribe only medicines that they consider
the most appropriate for a diagnosed illness. They are also guided by the concept of “rational drug use” in their choice of
medicines.
Promotional activities are done to provide physicians quality and detailed adequate technical information about a product.
PHAP member companies are compelled to follow strict promotional guidelines.
PCIJ: Can the pharmaceutical companies themselves not address the issue of their exorbitantly priced drugs?
61
PHAP: Prices of medicines in the Philippines are not exorbitant. We must be aware that prices of all products in the market are
influenced by several factors, and the weights or effects of these factors vary from one country to another. These factors
include: economies of scale, production cost, level of demand, among others.
Philippines
Generally, patented pharmaceutical products are priced higher than non-patented or generic ones. However, due to the
enactment of the Generics Act of 1998, the government mandates that every drug manufacturing company operating in the
Philippines shall be required to produce, distribute and make available to the general public the medicine it produces, in the
form of generic drugs thereby lowering the cost of generic or non-patented pharmaceutical products as opposed to patented
ones. As a result, patented products find it hard to compete in the market. The recently passed Cheaper Medicines Act of 2009
grants the President of the Philippines the power to impose maximum retail prices over any and all drugs and medicines listed
under Section 23 thereof. Examples of drugs and medicines subject to price regulation include: (a) those indicated for treatment
of chronic illnesses and life threatening conditions; (b) Drugs and medicines indicated for prevention of diseases; (c) those
indicated for prevention of pregnancy; (d) anesthetic agents; (e) intravenous fluids; (f) drugs and medicines that are included in
the Philippine National Drug Formulary (PNDF) Essential Drugs List; (g) and all other drugs and medicines which, from time
to time, the Secretary of the Department of Health determines to be in need of price regulation. The Intellectual Property Code
of the Philippines (RA 8293) does not require the patentee to commercialize or use the invention in the Philippines. As a matter
of fact, there are many patent grantees who do not work their invention in the country. So long as the patentee pays the annuity
payments required to maintain the patent, the same remains valid for a period of 20 years. However, the IP Code (RA 8293)
provides for compulsory licensing of patented inventions, including pharmaceutical products. Compulsory licensing shall be
granted by the Bureau of Legal Affairs of the Intellectual Property of the Philippines (IPO) in case of public non-commercial
use of the patent by the patentee, without justifiable reason (Section 93.4) or if the patented invention is not being worked in the
Philippines on a commercial scale, although capable of being worked, without satisfactory reason: Provided, that the
importation of the patented article shall constitute working or using the patent. (Section 93.5) The IP Code (RA 8293) provides
for the following enforcement actions against patent infringers: civil action and criminal action. A civil action may be filed with
the court against any person making, using, offering for sale, selling or importing a patented product or a product obtained
directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee. A
criminal action can be filed with the court for repetition of the infringement by the infringer or by anyone in connivance with
him after the finality of the judgment of the court against the infringer. This criminal action prescribes in three (3) years from
the date of the commission of the crime. The Philippines has a focus on generic products. As a matter of fact, under the
Generics Act of 2008, the government mandates that every drug manufacturing company operating in the Philippines is
required to produce, distribute and make available to the general public the medicine it produces, in the form of generic drug.
Philippines : once silent, an emerging market raises its voice
Despite a population of 95 million and a growing economy, the Philippine pharmaceutical industry has been largely
overlooked in the past--but things are about to change. The industry has been quite radically reshaped in the last year, following
the approval of the Universally Accessible Cheaper and Quality Medicines Act, that includes the Maximum Drug Retail Price
(MDRP) scheme. After years without any regulation, the MDRP called for a 50% price reduction on 21 molecules, and
introduced some systematization to drug pricing in the country.
The law is meant to increase access to medicines for the poor, in a country where the price of pharmaceuticals is among the
highest in Asia and 60% of the population has no access to even basic drugs. So far, the effects of the Cheaper Medicines Law--
as it is informally called--have been negative on the pharmaceutical industry. Reiner Gloor, president and executive director of
the Pharmaceutical and Healthcare Association of Philippines (PHAP), points out that “there have been no real volume
increases, and particularly the molecules which have been touched, have been flat. It is still too early to say if it has really
expanded the market, but it has taken [even by recognition of Department of Health (DOH)] PHP 12 billion [approximately
USD 270 million] out of the pharmaceutical market”.
62
Critics claim that in addition to negatively affecting the pharma industry, the law has not truly increased access to medicines
for the poor. But former secretary of health Esperanza Cabral, who was a promoter of the voluntary price reductions adopted by
the industry, believes that “the industry may be right that the very poor are still not able to afford the medicines they need.
However, there are many people who were struggling before--a group in between rich and poor--who could only afford some,
but not all of, their medicines before the MDRP. These people have benefited from the MDRP because now they can afford the
medicines they are prescribed.”
The MDRP is the first step in increasing access to medicines. The next step is increasing social support. Currently, Philhealth,
the national insurance, covers only 38% of the population. The recently elected Aquino government, that took office on July 1st
2010, has set universal healthcare coverage by 2013 as one of its primary objectives. If it becomes reality, universal healthcare
will further change the competitive landscape in the Philippine pharmaceutical industry.
The industry will also be reshaped by the prospective harmonisation on pharmaceutical regulations that is currently being
discussed by the Association of Southeast Asian Nations (ASEAN). The harmonisation will provide opportunities for local
Philippine companies to expand beyond national borders; it will also facilitate entry into the Philippine region for foreign
pharmaceutical companies. Within the Philippines, of course, this legislation will increase competition as more products flow
in. According to Edward Isaac, president of the Philippine Chamber of the Pharmaceutical Industry (PCPI)--the voice of the
Philippine companies--the harmonisation will, at the beginning, “be a threat.” Yet he continues, “There will be a learning curve
for us, but in the long run it will be good. We believe in competition, so we are getting ready for that.”
An industry adapting to a changing environment
Local players are indeed getting ready for increased competition. While historically, multinationals controlled 80% of the
market, in recent years local companies have steadily increased their share, and locals now represent 27% of pharma business in
the country. In addition to United Laboratories (Unilab), the number-one company in the Philippine pharmaceutical industry
and a local Phillipine brand, other local players have carved out a space for themselves--including Pascual Laboratories, GX
International, and Natrapharm. They have gained leading positions in some therapeutic areas, and are challenging
multinationals.
Philippines' Government Launches Second Wave of Drug Price Cuts within Six Months
Published: 1/20/2010
The Philippines' government has launched another drug price cut push within six months of the last move, which saw prices of
blockbusters such as Lipitor and Plavix reduced by some 50% in the country; the new wave is reportedly targeting some 20
"top-selling and expensive" drugs.
IHS Global Insight

Perspective
The Philippines' Health Undersecretary has requested multinational pharmaceutical companies to propose voluntary drug
price slashes for some 20 expensive drugs.
As a follow-on
Implications
action of the implementation of the country's Cheaper Medicine Act, the new push came less than six
63
months since the first round of price cuts came into effect in August 2009.
Big Pharmas vowed to solve the issue through talks with the government, however, the prospect is not very positive given
the government's determination to reduce drug prices in the country.
The Philippines' government has launched a second round of its drug price cut push in six months as it asked pharmaceutical
companies to voluntarily slash the prices of their life-saving drugs by half, according to a report by the Wall Street Journal. The
country's Health Undersecretary Alexander Padilla issued a request letter to the Pharmaceutical Healthcare Association of the
Philippines (PHAP), the industrial association of over 50 multinational drug majors operating in the country, earlier this month,
asking multinationals to submit their price slash proposals on about 20 "top-selling and most expensive" drugs. Government
officials revealed that some drug makers have already submitted proposed voluntary price reductions on their products,
however, there have been no further details disclosed at this stage. The price slash push of the government has raised concerns
among pharmaceutical companies. Executive president of the Philippines pharmaceutical industry group, Reiner Gloor, noted
that the industry has seen 600 jobs axed as a result of a similar price cut ruling executed in August 2009. The industry is trying
to solve the issue with dialogue with the authorities, added Reiner Gloor.
Second Round of Price Axes in Six Months
The Philippines government's first wave of price slashes was put into place in August 2009, which peaked with the president's
executive order No. 821 ruling the price reduction of five drugs by 50% (see Philippines: 29 July 2009: Philippines'
President Signs Executive Order to Impose MRP on Five Drugs). That wave of drug price control began with the
imposition of maximum retail price (MRP) limits for 22 essential drugs proposed by the Department of Health (DoH) in June
(see Philippines: 11 June 2009: Philippine Department of Health Announces Ceiling Price on 22 Essential Drugs ).
Multinational companies responded by offering voluntary reductions on the prices of over 80 selected
drugs, which, however, didn't stop their best-selling drugs such as drug giant Pfizer's cholesterol-lowering
blockbuster Lipitor and antihypertensive Norvasc, from the fate of a price cut.
Philippines: Selected Drugs Undergoing Price Cuts in August 2009
Active
Indications
Manufacturer
Ingredient
Atorvastatin
Hypercholesterolaemia
Pfizer (U.S.)
Amlodipine
Hypertension
Zithromax
Azithromycin
Antibiotics
Cytarabine
Enzon (U.S.)
Doxorubicin
Johnson & Johnson (J&J, U.S.)
Clopidogrel
Antiplatelet
Bristol-Myers Squibb/Sanofi-Aventis (U.S./France)
Diamicron
Gliclazide
Servier (France)
Outlook and Implications
The latest move is one more follow-on action of the Philippine government to implement its Cheaper Medicine Law, RA 9502,
which came into effect in November 2008. In a bid to bring down the high prices of drugs, especially expensive patented
products from multinational drug makers, the ruling includes a series of heavy-handed measures for drug price control
including:
64
 Permitting parallel importation so that cheaper drugs from other countries can be brought in to force down
the prices of drugs sold in the Philippines;
 The imposition of a mandatory generics prescribing rule, which requests the public doctors and health
workers should only put generic names of the drugs on the prescriptions while leaving out the brand names. Private doctors
working in government facilities should also follow this rule;
 To allow the President to approve price ceilings proposed by the Health Secretary to certain drugs in the
interest of the public health need.
As the third and last-to-implement measure, price control is clearly a strong weapon of the Philippines government to have a
direct impact on drug prices in the country, which are claimed to be much higher than those in neighbouring markets. With an
interval of about half a year, the new round of push reflects the government's determination to force down drugs prices to save
costs on drug spend in the country and improve affordability of expensive medicines. From what has been observed during the
August push, the government is also resolved to make sure compliance from both drug manufacturers, pharmacies and hospitals
by legal action threats. For drug companies, although the negotiation will be on the way in an attempt to buffer the blow of
another round of harsh price control, it doesn't bode well for the fate of their best-selling and expensive drugs. The companies'
top-line growth in the Philippines market is therefore likely to see considerable restriction by the ceiling set for key growth-
driven products.
65

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Republic of the Philippines

Congress of the Philippines

Republic Act No. 9502 June 6, 2008

(i) recognized in the Philippine National Drug Formulary;

(iv) in finished or ready-to-use dosage form; and

or by a medical professional, of a medicine in accordance with a medical

"93.1. National emergency or other circumstances of extreme urgency;

"(b) In situations of national emergency or other circumstances of extreme urgency;

"(c) In cases of public non-commercial use; and

DRUGS AND MEDICINES PRICE REGULATION

(b) The supply available in the market;

(d) Anesthetic agents;

(e) Intravenous fluids;

STRENGTHENING OF THE BUREAU OF FOOD AND DRUGS

(Sgd.) PROSPERO C. NOGRALES (Sgd.) MANNY VILLAR

(Sgd.) MARILYN B. BARUA-YAP (Sgd.) EMMA LIRIO-REYES

Approved: JUN 06, 2008

(Sgd.) GLORIA MACAPAGAL-ARROYO

Philippine President Signs Cheaper Medicines Act

Asia Medical eNewsletter

August 05, 2008

Please past as anonymous - thx

Philippines president signs Cheaper Medicines Act

FRIDAY, JUNE 6, 2008 | CONSTITUTION AND LAW

STA. CRUZ, Laguna (PNA) -- President Gloria Macapagal-Arroyo on Friday

Under the new law, it allows the parallel importation of patented

These drugs include those for chronic illnesses, for prevention of

The new law also creates a congressional oversight committee -- such as

President Arroyo, assisted by Health Secretary Francisco Duque who

The President proceeded to AMHERST Pharma Distribution Center in Binan,

(By Lilybeth G. Ison - PNA)

GMA signs Cheaper Medicines Act

The President proceeded to AMHERST Pharma Distribution Center in Binan, Laguna.

The Pharmaceutical Market:Philippines

Opportunities and Challenges

February 17th 2012

Single User Price:

£620 / $1085 / €775

On-line, PDF by Email and Paper

ENHANCED STRATEGIC INTELLIGENCE

Implementation Of The Cheaper Medicines Act Progressing Slowly

December 2009 | Industry Trend Analysis

Strong Growth Ahead

January 2012 | Industry Trend Analysis

Relative Steady Growth From 2011

Recent Healthcare Sector Developments

Roche's Avastin Approved For Ovarian Cancer Treatment

October 2011 | Industry Trend Analysis

High-Cost Drug Out Of Reach For Most

Differential Drug Pricing, An Unlikely Possibility

Brazil > Philippines

Roche Developments In The Philippines

Cheaper Medicines Act not properly implemented — Villar

Out with VAT

Free medicines for cancer patients

Cheaper Medicines Act Amendment Pushed

Villar: Cheaper medicines law failed

Kapakanan ng bayan, binarat sa Cheaper Medicines Act?

Hindi malusog na batas