Price control is last resort

Finally, Ate Glue signed the EO imposing price control on some vital prescription drugs. It was a half measure because the government allowed the pharma industry to voluntarily lower their prices on a larger number of prescription drugs. In a way, the outcome smells like a compromise of sorts. But now, strict monitoring is essential because the pharma industry has proven itself devoid of any sense of community.

There are however, a lot of misinformation being peddled on the issue starting from Ate Glue and the pharma industry and some congressmen allied with Ate Glue. First, the pharma industry told media that they will follow the order as good citizens but if they had their rathers, they would rather that the free market approach be allowed to deal with the prices of the prescription drugs the DOH cited as essential.

I can go with that. I am philosophically inclined to accept the position that we should always try to uphold the free market principle and use price control as a last resort. Even Sen. Mar Roxas is a strong advocate of the free market and is now being attacked by Ate Glue and her congressional supporters as a weakling because Mar opposed unilateral price control during the congressional deliberations on the bill. Because Mar understands the needs of business and industry, I guess Mar is guilty as charged.

In her attempt to deny Mar any credit for the cheaper medicines law, Ate Glue pointed out that she had always supported the stronger House version of the bill. That is sheer double talk. If she really wanted the price control feature that makes the House version supposedly stronger, it isn’t as if Mar is preventing her from making that happen. Mar made sure she had the power to impose price control as a last resort if market mechanisms fail to bring down drug prices as is obviously the case.

The fact is… it is Ate Glue who dilly dallied in signing the EO imposing price control, a power the law that Mar shepherded in Congress allows her to do. And when she finally signed the EO, it covered less than half the original number of prescription drugs recommended by the DOH.

Ate Glue is trying to make it appear that it is Mar’s fault that the prices of essential prescription drugs didn’t fall one year after the measure was signed into law. When she said in her SONA that if Mar truly wanted something to happen he should just do it, the admonition should really be directed to her because Mar does not have the power to do anything until he is elected President… unfortunately for us, that power now belongs to her as President, a power she reluctantly exercised and only because of intense public pressure.

But I understand where Ate Glue is coming from. I have covered her when she was a senator and I actually stayed at the Senate session hall late into the night as she defended our joining the World Trade Organization. To give her credit, Ate Glue truly believes in the free market. If she gave confused signals with regards this prescription medicine law, it is only because she is playing politics as usual.

Ate Glue’s spokesman for economic affairs, my good friend and First Quarter Storm comrade Gary Olivar, honestly expressed her reluctance to use price control when he explained why she is taking too much time signing that E.O. If we force investors to abide by a price ceiling, Olivar said, potential investors might get scared. “If they get turned off and refuse to invest in the Philippines, what will happen to the job opportunities that we can get from them?”

Gary, a registered Republican who campaigned for George W. Bush, was very authoritative in expressing Ate Glue’s sentiment because they are philosophically attuned on this point about allowing free market forces to set prices. And Gary’s point is precisely why Mar fought Ate Glue’s congressional allies whose idea of a stronger bill was to impose price control right away.

Mar and Ate Glue may get goose pimples by the thought that they are also more philosophically attuned to each other on this point than is politically tenable. So, how can Ate Glue say in her SONA that she was more in favor of the “stronger” bill sponsored by her allies in the House? Talk of forked tongue!

As for Big Pharma… how can they now say they want market forces to bring down prices when they have subverted these same market forces for so long? They have attacked Mar and later on, Obet Pagdanganan when they tried to use parallel importation as a means to use market forces to moderate prices. They even sued poor Obet in court for his efforts. In this country, Big Pharma has been wielding the pricing power of a cartel and they are desperately fighting to keep it.

As I said in a previous column, Big Pharma had it coming to them. Their actions have led to a crisis situation that made it necessary for government to use the ultimate weapon of price control… reluctantly, I might add.

If there are any heroes in this fight, it has to be Mar and Obet who started it, fought for it and brought it to this current stage. Mar and Obet had no other interest other than to make sure the poor had access to cheaper prescription drugs. They do not have any economic interest in drug companies ready to produce generic versions like some of Ate Glue’s congressional allies are reported to have. It pains me to hear our President and her allies twist things around as if the truth has no value in our august public forums like the SONA.

SANA

Speaking of the claims Ate Glue made in her SONA, I got this reaction from a reader who wants to change the name of the ritual to SANA.

You may have wondered, as I did, about the President’s mention of a recent credit upgrade by Moody’s as a ringing endorsement of the quality of (her) economic and financial management especially during these turbulent times. The recent upgrade is factually correct, but the context of the claim is sorely incomplete.  I therefore thought of doing some checking—-

For the record: We were upgraded twice by both S and P and Moody’s during the Ramos administration, did not move at all in rating during the Erap regime, and under PGMA’s watch, we have been down-graded on two occasions by both S and P and Moody’s — in the latter’s case, by two notches on one occasion.

Thus the recent upgrade puts Moody’s now at par with S and P and brings us back rating-wise to where we were in 1993. We are now three notches away from investment grade, when we were one notch away at the end of the Ramos administration in 1998, as well as in 2001 at the end of Erap’s abbreviated term.

As Churchill said— there are three kinds of falsehoods depending on venality— there are white lies, there are damned lies, then there are statistics… The SONA added a fourth — “GMA truths”.

Passion for golf

Lal Chatlani sent this one.

Dave and his buddies were hanging out and planning the golf tournament. Unfortunately, he had to tell them that he couldn’t join this time because his wife wouldn’t let him. After a lot of teasing and name calling, Dave headed home frustrated.

The following week when Dave’s buddies arrived at the course, they were shocked to see Dave. He was prepared for tee off. His buddies asked, “How did you talk your missus into letting you come Dave?”

 Dave replied. Last night I came home and slumped down in my chair with a beer to drown my sorrows thinking how much I wanted to go golfing with you guys. Then the ol’lady snuck up behind me and covered my eyes and said, “Surprise!”

When I peeled her hands back she was standing there in a beautiful see through negligee and she said, “carry me into the bedroom and tie me to the bed and you can do whatever you want...”

SO I DID AND HERE I AM!

Boo Chanco’s e-mail address is [email protected]. This and some past columns can also be viewed at www.boochanco.com