Drug Access Act Bringing Down Prices In The Philippines

The Philippines' Universally Accessible Cheaper and Quality Medicine Act of 2008 will bring down local drug prices in the country by promoting a level playing field and free competition, the Philippine Chamber of the Pharmaceutical Industry said at a generics summit in Pasay City.

PCPI VP Edward Isaac credited the domestic generic industry's increased market share with lowering drug prices in the country.

"Competition also extends access of affordable medicine to the majority of the people who find it painful to buy medicines," he said.

Jamie Davies, pharmaceuticals analyst with London-based Business Monitor International, told PharmAsia News, that the Philippines had some of the highest medicine prices in Asia until very recently.

"Multinational drug makers dominated the market through aggressive promotional activities and the retention of long-term tenders from public healthcare facilities," he said. "However, following pressure from patient groups and local drug makers, the Cheaper Medicines Act was eventually signed in 2008."

Davies added that despite the apparent success of the Cheaper Medicines Act, several industry stakeholders feel that more can be done to increase access to affordable pharmaceuticals.

"In particular, the PCPI wants a stronger Bureau of Food and Drugs with increased human resources and modernized facilities," Davies said. "This sentiment was echoed by the Drug Stores Association of the Philippines and Senator Mar Roxas, who was one of the key architects of the Cheaper Medicines Act."

Philippines President Gloria Macapagal-Arroyo signed the act June 6. The director general of the Intellectual Property Office, Department of Health and other appropriate government agencies were mandated to issue the implementing rules and regulations of the Act within 120 days.

The law aims to bring down prices of medicines in the country by encouraging competition in the local pharmaceutical market, widening access to lower-cost medicines by parallel importation, government importation, and domestic production of generic drugs - and for this purpose it amends the Generics Act of 1988, the Pharmacy Law and the Intellectual Property Code (PharmAsia News, Nov. 16, 2007).

The Cheaper Medicines Act requires every drug manufacturer operating in the Philippines to produce, distribute and make widely available to the general public an unbranded generic counterpart of their branded product.

According to a Senate Committee Report, submitted jointly by the Committees on Trade and Commerce, Health and Demography and Finance in October 2007, at least 60 percent of the market is controlled by multinational companies.

The report also said that the protection given by the Intellectual Property Code of the Philippines in favor of inventors has resulted in a significant imbalance between supply and demand of drugs and medicines.

The Cheaper Medicines Act allows local generic companies to test, produce and register their generic versions of patented drugs while the patent on the drug still subsists so that the generic versions of the drug can be sold to the public immediately upon expiry of the patent.

"Local manufacturers are moving up faster than the multinational companies," PCPI President Marilou Buensuceso said at the summit. "This is true especially in life-saving medicines."

According to Buensuceso, competition is working in major therapeutic areas like antibiotics for respiratory, gastrointestinal and urinary tract infections, as well as cholesterol, hypertension and diabetes.

"Local firms accounted for 40 percent of the 2007 growth in pharmaceuticals, driven mainly by unit sales and new products," Buensuceso said.

Philippines Senator Mar Roxas said in a report by Ernst & Young that the government may exploit a patented invention even without the agreement of the patent owner when public interest requires it, or where there is public non-commercial use of the patent by the patentee.

Thailand has made headlines recently for using that rationale to issue compulsory licenses for a number of drugs patented by foreign firms (Also see "Thai Officials Say Compulsory Licenses Will Not Deter Biotech Business – BIO 2008 Exclusive" - Scrip, 24 Jun, 2008.).

"According to BMI … sales of generics drugs reached $220 million by the end of 2007 in Philippines," Davies said. "This equated to just a 10 percent share of the overall pharmaceutical market, including the prescription and OTC market."

"However, by 2012, we expect sales of generic drugs to more than quadruple, reaching $820 million, or 20 percent of the overall medicine sales," Davies added.

At the generics summit, PCPI urged the Bureau of Food and Drugs to improve its procedures and implement a supportive regulatory policy for Filipino drug companies to promote competition and bring down drug prices

"We have sown the seeds for a strong and thriving Filipino generic industry," Buensuceso said. "But the local healthcare system has to overcome its systemic weakness and historical reliance on and dominance of innovator brands."

"We are very hopeful that the passage of the … Act, which contains a very important provision allowing the BFAD to keep its revenues [from fees and other charges] will pave the way for augmentation of the agency's depleted manpower, an upgrade of its facilities … and other requirements to effectively implement this law," Isaac said.

-Ying Huang ([email protected])