Healthy Skepticism Library item: 16010

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Publication type: news

Esguerra CV.
EO on cheap medicines takes effect Aug. 15
Philippine Daily Inquirer 2009 Jul 21
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20090721-216474/EO-on-cheap-medicines-takes-effect-Aug-15

Full text:

The executive order setting a price ceiling on essential drugs will take effect on Aug. 15, but will cover only at least six medicines whose manufacturers refused to sell at half their current prices, according to the health department.

Among these medicines, which drug firms offered at price cuts of only 30 to 35 percent, is the widely popular antihypertensive drug amlodipine, Health Secretary Francisco Duque III Monday said.

The rest include anti-infective, anti-cholesterol, anticancer and anti-diabetic drugs, he said.

Duque said at least 14 other medicines would no longer be covered by the executive order after their producers-at least five companies-voluntarily cut their prices by a minimum of 50 percent.

In line with the cheaper medicines law passed last year, the Department of Health (DoH) recommended to President Gloria Macapagal-Arroyo a 50-percent price cut on 21 essential medicines through a draft order.

Ms Arroyo had given drug firms 10 days or until July 18 to reduce prices by half so there would no longer be a need for the executive order.

But some of the firms apparently tried to circumvent the Palace order, primarily by offering price cuts for drugs not belonging to the 21 essential drugs.

One company was found to have offered to cut the price of a medicine no longer being sold in the local market, said Dr. Robert So, program director of the DoH pharmaceutical management unit.

So said his office was verifying a similar case involving another drug.

Burden on patients

At a media briefing in Malacañang, Duque said drug firms had been selling their products at high prices for a long time.

The commonly used drugs have been sold for as much as 200 percent higher than in other Asian countries such as India and Thailand.

“It’s adding to the burden of our patients who, otherwise, could have accessed these very good, quality, branded medicines if it were not for the price barrier,” Duque said.

He said drug companies who failed to heed the 50-percent price cut order reasoned that doing so would eat up so much of their profit margins.

“Even if they are going to say that it will threaten the viability of their operation, I, for one, will not readily accept that,” he said.

“I will have to look at their financial statement. They would have to disclose how much they actually earn, how much they spend for operations, for importation, taxes paid, transfer cost, marketing cost, advertising cost,” Duque said.

P10 billion in foregone sales

The industry’s offer to voluntarily cut prices could reduce sales by as much as P7 billion to P10 billion a year, making it hard for smaller drug firms that produce and market three or four products to survive, according to the Pharmaceutical and Healthcare Association of the Philippines (PHAP).

The industry opposed moves to introduce price controls, looking at the maximum retail price mechanism under the law as a form of regulation, said PHAP head Reiner Gloor.

Wrong signal

Gloor said some drugs could continue to be inaccessible to the poor unless the healthcare system was reformed.

“That sends a wrong signal for the country, which has followed free market policy,” Gloor told Reuters in an interview.

“We’ve given the President an option in making a decision on whether there should be price control or not,” he added.

To beat the July 18 deadline, 13 drug firms submitted proposals for voluntary price cuts, according to So. All but two were members of PHAP.

Duque said the DoH rejected offers for price cuts for drugs outside of the list of 21 essential medicines. He said such offers were an “all-or-nothing proposition” anyway.

Review every 3 months

The health secretary said the agency would review every three months the prices of medicines being sold in the country, to check if companies were honoring their commitment to cut prices by at least half.

“We will hold them to keep prices at that level unless they show us proof that certain conditions have arisen,” he said, citing factors like changes in foreign exchange rate.

“Unless they are able to clearly show this, then we will not agree to any price increases within a six-month period,” Duque said.

In a statement, PHAP said that its letter of undertaking contained not only the 21 molecules and therapeutic areas specified in the DooH list, but also some additional molecules required for other essential medicines.

“PHAP believes that the voluntary price action will provide greater access to quality medicines for Filipinos, especially the poor, as the offer contains a more comprehensive list of medicines used by majority of the population for greater impact particularly on lower-income Filipino patients,” the group said.

“PHAP proposes that a longer-term solution be implemented that considers comprehensive healthcare reform, including adequate healthcare financing through PhilHealth, infrastructure building and training of healthcare providers in the rural areas,” it added.