By Samuel P. Medenilla and Claudeth M. Ciriaco
DESPITE opposition from drug manufacturers, President Duterte on Monday finally issued a new order imposing a price cap on 133 price drug formulas to make it affordable to more people.
Executive Order (EO) No. 104 mandated the implementation for a Maximum Retail Price (MRP) and/or Maximum Wholesale Price (MWP) 86 drug molecules or 133 drug formulas upon the recommendation of the Department of Health (DOH).
The drugs covered by the EO include: drugs for illnesses that are the leading cause of morbidity and mortality; drugs have a high price differential compared to international prices; those that lack generic counterparts or lack market access; and those considered as innovator products but the most prescribed and/or dispensed in the market.
It covered drugs with varying prices including cheap anti hypertensives with an MWP of P8.16 and a expensive growth hormone inhibitor, which has a MWP of P48,457.96 per vial.
The list of MWPs and MRPs also covers common anti-cancer drugs, immunosuppressants, analgesics, antiasthmatic, and anti depressants among others.
“No public or private entity shall be allowed to sell, reimburse or demand from the public or patients payment in an amount higher than the MRP or MWP, as the case may be,” EO 104 said.
Pending price caps
Initially, the DOH recommendation covered 122 drug molecules or 205 drug formulas in line with Republic Act (RA) 9502 or the Cheaper Medicines Act.
However, several of the drugs have yet to be given MRP and MWP by the technical working group (TWG) of the Department of Trade and Industry (DTI) and DOH.
The TWG was ordered to convene 30 days after the issuance of EO 104 to set the MRP and MWP of the remaining 36 drug molecules or 72 drug formulas included in DOH’s recommendation.
To further regulate drug prices, EO 104 instructed DOH in consultation with DTI and the Philippine Competition Commission to consider pooled procurement and price negotiation.
Transition period
As part of the implementation of EO 104, concerned drug retailers are given 90 days from its effectivity to dispose their existing inventory stock at prevailing prices before the prescribed MWPs and MRPs take effect.
“Thereafter, regardless of the status of existing inventory stock, MRP and/or MWP under this Order shall be strictly implemented,” EO 104 said.
The issuance will take effect 15-days after its publication in a newspaper of general circulation or the Official Gazette.
PHAP’s position
WHILE fully supportive of the Executive Order (EO) imposing Maximum Retail Price on Medicines, the Pharmaceutical and Healthcare Association of the Philippines (PHAP) on Monday called on the government to consider also its impact on the pharmaceutical industry and the general public.
“If reasonable profits are not realized, pharmaceutical companies would review the sustainability of [their] operations in the Philippines, including the possible downsizing in the number of employees. The Philippines would also lose its attractiveness to investments. The billions of taxes they pay would also be lost,” PHAP, who has yet to receive an official copy of the EO, said in a statement.
Based on its earlier proposal, the Department of Health (DOH) would cap prices at the manufacturers’ level but increase the margins of retailers, which would actually result in higher prices, a contradiction, as PHAP noted, between the objective and the implementation.
PHAP argued that they have been consistent in opposing price control since global experience had shown that artificial measures result in market inefficiencies and lack of supply.
Equally important is that innovative drugs, or new medicines and vaccines produced from years of expensive research to address current or emerging health threats, would likely not be introduced in the Philippines, said the industry group.
Instead of price control, PHAP earlier proposed a straight price reduction of 150 medicines and also offered a system where medicines will not be left expired and wasted in DOH warehouses.
The group added that they share the objective of lowering medicine prices but appealed to the government to consider bulk procurement and price negotiation as the more sustainable and beneficial approach.
In December, PHAP proposed to voluntarily reduce prices of select drugs and medicines through their proposed “Mas Murang Gamot Program.”
The PHAP’s proposal: drug companies and manufacturers will voluntarily reduce drug prices by as much as 75 percent for 155 medicines across 36 disease categories, both for the public and private sectors.
“We appreciate the gesture (of PHAP) and we have been continuously evaluating the proposal, taking into account the intended goal of the Maximum Drug Retail Price (MDRP), which is to improve access to affordable medicines for all Filipinos,” Health Secretary Francisco T. Duque III said.
“However we must take some things into consideration. First of all, given its voluntary nature, PHAP cannot guarantee price reduction at points of sale, such as drugstores, drug retailers, and private hospitals, which comprise at least 90 percent of the total pharmaceutical market. We know that the drug prices in these markets are significantly higher compared with government prices,” Duque added.