Healthy Skepticism Library item: 17277

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Publication type: news

Landingin R
Drugmakers set to win softer terms from Manila
The Finanical Times 2010 Feb 22
http://www.ft.com/cms/s/0/413ac1b2-1f65-11df-9584-00144feab49a.html

Full text:

Global drugmakers in the Philippines are poised to win softer terms than expected from the government for a fresh round of price cuts on essential medicines.
The agreement, which could come as early as this week, may help pharmaceutical companies stem a sharp slide in revenue growth blamed on a 50 per cent price cut on more than 100 drug preparations in August last year.
The pharmaceutical market in the Philippines, excluding nutritional products, last year grew by only 2.5 per cent to 112.8bn pesos ($2.4bn) in sales compared with the average rise of 9.7 per cent in the previous three years, according to IMS, the pharmaceutical industry data provider.
Growth in sales of prescription medicines, which account for close to three-fourths of the market, shrank to just 0.7 per cent from the three-year average of 10.2 per cent.
The latest price cuts, likely to range from 20 per cent to 50 per cent, will cover just more than 40 products that the drug companies themselves have suggested, according to Alexander Padilla, an undersecretary at the government department of health.
In a letter to the pharmaceutical industry association, the health department said it was keen to halve prices of some drug products.
“This time, the list will be based purely on what the drug companies themselves have submitted” said Mr Padilla. He declined to name the products to be covered, saying an announcement would be made in the next few weeks.
The government last year imposed mandatory price ceilings on 27 drug preparations made by Pfizer , the world’s biggest pharmaceutical company. The products included cholesterol-lowering Lipitor , the world’s best-selling drug, and hypertension treatment Norvasc, the best-selling brand in the Philippines.
The Philippine government allowed other drug companies to halve prices on some 90 products on their own, giving them some flexibility to raise prices sometime in the future.
Pfizer, however, said recently it had been forced to cut 300 sales staff after its revenue in the Philippines fell about 30 per cent last year from the previous year.
Reiner Gloor, executive director of the Pharmaceutical and Healthcare Association of the Philippines, said: “The new secretary of health has a better understanding of what the issues are, and a result there is more flexibility. I think they are really looking at a voluntary approach based on dialogue”. He said a few companies have cut prices on some drug products ahead of the government move.
Manila has yet to complete an assessment of the impact of August price cuts but early studies show it had limited benefits for poor people.