Wednesday, June 25, 2008

Health Groups Doubt New Law Would Make Medicines Cheaper

Published on Bulatlat (

Health groups expressed doubt that the Universally Accessible Cheaper and Quality Medicines Act of 2008 or Republic Act no. 9502 would bring down the prices of medicines in the country. They said that this is because the law failed to dismantle foreign control over the country’s drug industry.

Vol. VIII, No. 20, June 22-28, 2008

Mrs. Gloria Macapagal-Arroyo signed Republic Act 9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008 on June 6.

The law aims to bring down the prices of medicines in the country. The Philippines is one of the countries where medicines are the most expensive.

According to the World Drug Situation of the World Health Organization in 2000, cheaper medicinethe Philippines is classified as among countries where less than 30 percent of the population have regular access to essential drugs. Moreover, the Department of Health, in its Rational Drug Use paper in 1999 revealed that those who cannot afford the drugs they need resort to under-medication of essential drugs (such as antibiotics) and over-medication of cheaper symptomatic preparations. Symptomatic preparations are medicines that address the symptoms of a disease, like paracetamol for headache.


The Council for Health and Development (CHD), a national organization of community-based health programs, cited several reasons for believing that the new law would not deliver on its promise of reducing the cost of medicines in the country.

In a statement, Eleanor Jara, medical doctor and CHD executive director, criticized the omission of a Drug Price Regulatory Board.

The Lower House version, House Bill 2844 proposed the establishment of a Drug Price Regulatory Board. Iloilo Rep. Ferjenel Biron, principal author of the Bill, asserted that state intervention in the form of a Drug Price Regulatory Board is needed to significantly reduce the prices of medicine.

However, Section 17 of the enacted law gives the President, upon the recommendation of the Secretary of the Department of Health (DoH), the power to impose maximum retail prices over drugs and medicines.

Jara said, “Failure to create a regulatory body for drug prices would only strengthen monopoly trade among big players in the drug industry and would further banish local manufacturers into oblivion. Thus, the Filipino people’s access to essential medicines is at the mercy of profit-greedy transnational drug corporations.”

She added, “We do not understand why our legislators decided to give the authority to regulate the prices of medicines to the President when Mrs. Gloria Macapagal-Arroyo herself is tainted with corruption and other anomalies. Besides, she has no record of going against the profiteering acts of transnational drug corporations. She has allowed it for seven years. What can she do in the next 120 days?”

Under the new law, the health secretary is mandated to establish and initiate a price monitoring and regulation system for drugs and medicines within 120 days after enactment of the said law. The health secretary’s recommendations would later be approved by the President.

In an interview with Bulatlat, Dr. Geneve Rivera, secretary general of Health Alliance for Democracy (HEAD) branded the new law as a mere palliative. She said, “Walang ipinatutupad ang gobyerno na permanente at epektibong patakaran sa pagkontrol ng presyo.” (The government does not implement a permanent and effective policy of price control.)

TNC control

Rivera said that the Arroyo government does not recognize that foreign control over the country’s drug industry is the main reason for the prohibitive cost of medicines.

The CHD asserted that the Cheaper Medicine Act is silent about the control of transnational corporations (TNCs) in the marketing, distribution and pricing of medicines.

According to the CHD Primer on Cheaper Medicines, 72 percent of the country’s drug industry is controlled by TNCs. In 2006, TNCs cornered 70 percent of the P9.11-billion ($205,411,499 at an exchange rate of $1=P44.35) worth of medicines sold in the country.

In its position paper, KilosBayan Para sa Kalusugan (KBK) said, “TNCs control the pricing of essential medicine through international trade impositions like the Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization. This agreement further aggravates the escalating drug prices by granting exclusive license to TNC-dominated patent holders to produce certain drugs and dictate its price in the market.”

The Philippine International Trading Corporation (PITC) said that 80 percent of toll manufacturing of drugs for multinational corporations is done by one company. About 65-70 percent of wholesale distribution is handled by a sister company. In the end, more than 60 percent of the retailing of finished products is sold through Mercury Drug, which has more than 600 outlets nationwide.

Parallel importation

Moreover, Rivera said that provisions on parallel importation would bear no significant impact on the prices of medicines. She noted that even before the passage of the law, parallel importation is utilized by the government in its Botika ng Barangay (Village Drug Strores) program.

Third World countries use parallel importation to buy cheaper medicines from other countries. The Philippines buys medicines from Pakistan and India.

CHD’s Jara said that parallel importation would only further aggravate the country’s import-dependence and stunt the development of the local drug industry. She said, “Instead of being dependent on imports, why not develop our own drug industry and grant tax holidays for local manufacturers?”

The KBK’s position paper stated that developing a national drug industry is one of the most decisive steps in lowering the prices of medicines. It cited that India and Pakistan have done this during the last ten years.

The CHD primer revealed that there are about 600 drugs in the country that are considered essential. Of these, only 200 drugs are made by local companies. The other 400 off-patent drugs do not have local generic counterparts and are thus dependent on importation.


The KBK and CHD proposed as an alternative the creation of a transitory drug price regulatory board composed of representatives from the academe, consumers and health professionals. The drug price board would regulate prices of essential medicines based on production costs and a reasonable profit.

The health groups said parallel importation of essential medicines should be selective and subject to extensive government testing for safety and efficacy.

They are also pushing for the implementation of the Generics Law. The CHD noted that while the law has been in effect for 19 years, many are still not aware that generic equivalents are as safe and effective as branded, expensive drugs. As of 2006, generic drugs account for a measly four to five percent of medicines being sold in the Philippines.

Long-term solutions recommended by the health groups include the development of a self-reliant national drug industry that is responsive to the medical and health needs of the people; development of the technology to refine and extract raw materials and chemicals; tapping of the medicinal potential of indigenous and herbal plants in the Philippines through government-sponsored research and development, among others.


Jara said, “The Arroyo government is merely preoccupied with populist rhetoric. In reality, it falls short of medium-and long-term solutions to the Filipino people’s problems.”

Rivera said the Arroyo government would not implement measures that contradict its own policy framework. The deregulation of the drug industry and liberalization of imports of medicines, she said, form part of the neoliberal policies being undertaken by the Arroyo government. Bulatlat

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