Continuing the war vs high priced drugs

Should GMA sign any time now the controversial Executive Order setting a price ceiling on 22 essential drugs sold in the country, a new page in Philippine health care will be opened. And oh boy, will the writing on this chapter hurt the multinational pharmaceutical industry operating locally.

Since Day 1 when the first bill that initiated today’s Cheaper Medicines Law was filed some four years ago, foreign-based drug marketers in the country have been actively seeking to stall and/or water down provisions that would have been inimical to their interests.

More than a year now after the bill has been signed into law, prices of essential drugs continue to be at levels much higher than those in neighboring nations.

And if there is one defining reason that supports public clamor for the President to sign the EO to set a maximum retail price (MRP) for essential drugs, it would be the long wait of millions of Filipinos to actually benefit from the signed law.

Multinational drug companies in the Philippines are waging at the very least a three-fronted war. The first is against the signing of an MRP list, an act that is seen to immediately and considerably slash the multinational drug companies’ bloated profits.

Voluntary compliance

Drug companies opposed to the MRP listing are invoking the benefits of voluntary compliance as against price control, citing that the latter only encourages hoarding and eventually black market pricing as supply becomes artificially threatened.

The contentious June 8 meeting at Malacañang can be gleaned as a last ditch effort by the drug companies to persuade the country’s CEO not to impose a maximum retail price on highly saleable and brisk selling drugs now popular among sick Filipinos.

During the meeting, though, the MNC drug companies failed to give a firm plan of action that could substitute for the MRP’s 50-percent price reduction. These pharmaceutical firms should be thankful they had been given another 10 days to come up with an alternative after having bilked the public of so much money for their overpriced drugs all these years.

Open importation

Then, there is the threat of parallel importation, which the newly signed law effectively allows. This will enable third party groups and individuals to import drugs or medicines whose patents have already been registered in the Philippines.

One foreign drug manufacturer had sued a drug store owner for selling “counterfeit” drugs, which are really imported medicines that bear the same formulation as those registered and approved by the Bureau of Food and Drugs to be sold locally, but only by the local patent holder, i.e., the complainant.

Glaxo SmithKline (GSK) had won the case at the level of the lower court, but the Supreme Court reversed the decision saying that the importation of patented drugs by local drug companies is now allowed by law and cannot be penalized under the Special Law on Counterfeit Drugs.

The high tribunal said the Cheap Medicines Law amended the Intellectual Property Code as it allows third persons the right to import drugs or medicines whose patent are registered in the Philippines.

The SC said that bringing into the country unregistered imported drugs is also confirmed as allowable by the implementing rules and regulations of the Cheaper Medicines Act which declassify unregistered products as “counterfeit” under the SLCD.

Standardized regulatory requirements

Lastly, there is the ongoing collaboration among ASEAN members that attempts to synchronize pharmaceutical product standards and regulations, thus paving the way for a free flow of cheaper but quality medicines in time for the lifting of regional trade blocks next year.

Among ASEAN community members, access to pharmaceutical products is difficult because of uneven standards regarding drug quality, efficacy, and safety. With a harmonization scheme underway involving all the processes in the pharmaceutical sector – from raw materials, production, quality and testing – importation at least cost could be expected.

Among the objectives being pursued is the development of transparent and fair regulatory processes and standardized regulatory requirements, and the elimination of duplicate studies to meet different regulatory requirements. This should result in a more efficient use of resources in the research and development process of drug creation.

In particular, BFAD should benefit from this since a product registered in one ASEAN country should be acceptable in another ASEAN country. Parallel drug importers have been complaining that the slow process of registering with BFAD is a major reason why the entry of good quality but cheaper medicines is not progressing fast enough.

With the Cheaper Medicines Law, the ASEAN initiative should be able to translate to a freer flow of cheaper and quality medicines, and should benefit more than half a billion ASEAN consumers. This should also bode well for local drug makers including those of Thailand and India.

Call of the times

All over the world, governments are choosing to regulate medicine prices, at least those classified as essential, after realizing there is a way out – or around – those restrictive patents and exorbitant prices that multinational drug firms have perpetuated.

The global crusade for cheaper medicines is successfully demystifying the business of big pharmaceutical companies by exposing extravagant lobbying, marketing and advertising budgets at the expense of the dying Third World peoples.

‘Sulit’ cards – too little too late

During times when the cost of medication is depriving families of decent meals and other basic amenities, giving out “sulit” cards, as one multinational drug firm is doing, as a way to placate those struggling to have access to “high quality medicines” has come a bit too late and too little. In local parlance, it is called “consuelo de bobo.”

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.