Gov't to import cheap medicines from India

In an effort to pressure drug companies to bring down prices, government has decided to import pharmaceutical products from India to be sold locally, initially through government-owned hospitals in the National Capital Region (NCR).

This is part of government's effort to force big foreign-owned pharmaceutical companies to bring down the prices of their products by providing competition at the retail level.

Multinational drug companies account for 70 percent of the market while local pharmaceutical companies account for only 30 percent, selling mostly to small drug stores and government agencies.

The decision is expected to meet opposition from the Chamber of Filipino Drug Manufacturers who earlier lobbied for the importation of raw materials instead of finished pharmaceutical products. They said that although the government is mainly targeting foreign-owned drug companies, local producers would suffer the brunt of competition against cheap government imports.

However, after sending a team to India to evaluate the possibility of procuring pharmaceutical products in bulk, the Department of Trade and Industry (DTI) said it has decided to make an initial importation of off-patent critical drugs.

Trade Secretary Manuel Roxas II said the team has confirmed reports that medicines are being produced at radically cheaper costs and sold at much lower prices in India.

"The differences vary, depending on specific medicines, but their prices are really much lower than ours," Roxas said. "Our prices are high because of the sheer lack of competition, there are no pressures to improve efficiencies."

Roxas said the team is still finalizing its report detailing the comparative analysis between pharmaceutical industries in India and the Philippines. Pending the final recommendations, however, he said the DTI is already making preparations for importation.

Roxas said the importation and distribution would be handled jointly by the DTI and the Department of Health (DOH) through the inter-agency task force formed late last year for purposes of monitoring drug prices. According to him, the DTI would handle all the trading aspects of the importation, from sourcing to procurement. The actual importation would be undertaken by the Philippine International Trading Corp (PITC), an attached agency of the DTI in charge of all government importation's.

However, Roxas said the DOH-DTI task force is still calculating the actual requirement of NCR-based government hospitals to determine the volume to be initially imported from Indian pharmaceutical companies.

Roxas admitted that these importations won't have an immediate impact on domestic prices but added that government plans to build up its capacity to handle bigger volumes.

"The main concern here is quality control and testing," he said. "We want to make sure we are getting not just cheap medicines but good quality medicines too. While we are building up our capabilities, the smaller the importation at this point, the easier it will be to conduct the testing."

For the long term, Roxas did not rule out the possibility of creating a procurement agency devoted entirely to the importation and distribution of pharmaceutical products.

"At this point we do not want to rush headlong into the creation of another layer in the bureaucracy and this is why the task force is handling this program," he explained. "But if the natural evolution o f the process would necessitate the creation of a procurement agency solely to undertaking this on a permanent basis, we will study it then."

Roxas also said government would study the proposed importation of raw materials, but in the meantime, importation would focus mainly on manufactured off-patent drugs. "The need here is immediate," he said. "It is possible for government to import raw materials and make that available to local drug manufacturers if they want but at this point, we just want to make cheap drugs available to the public as soon as possible."

Government has been considering various options to bring down the cost of pharmaceutical products from the imposition of outright price controls to parallel importation from cheaper sources.