The author works in pharmaceutical company …. He has experience in working in local Filipino owned Pharma company, a Japanese Multinational company, an Indian owned generics company and a Singapore based drug distribution company.
The issue on drug imposition of price controls will it ever achieved the desired end and what will be the consequences of the pharmaceutical industry in the Philippines. President GMA as compliance by law passed by Congress has imposed price controls on several “essential drugs” to lower its retail prices from the past practice of free pricing model. Multinational companies had no choice but to comply, either by abiding with the demands of the new law or outright voluntary price reduction. This new development in the Philippine 130 Billion pesos Pharma industry would put more pressure to multinational drug company’s profits where it enjoys 70% of the Philippine drug market. The Philippines has the highest cost of medicine in Asia next to Japan. The WHO had documented that the price of medicine in the Philippines is believed to be 4 to 18 times higher than the international comparator prices. And it also estimated that 80% of the population cannot afford to buy their medicines and more have died because of failure to access to essential medicines. It has been a practice for Filipinos to buy first their essential commodities rather than giving priority of buying medicine for their health and well being.
During the Aquino administration, the Generics Law was passed. Its objective primarily is to strengthen local pharmaceutical companies to compete with Multinational companies and it orders Doctors to comply with the law to write the generic name of the drug in their prescription. While it allows consumers and empowers them to make a choice in their purchases of their drug it has not really addressed the objective of the Law. And only 10-20% Filipinos purchased generics par below to 50% US data consumption on generics. While we are the first in Asia to enact a Generics Law it has not really resulted in the widespread availability and affordability of important drugs to the poor. It even enlivens the multinational drug companies to increase their drug prices by coming up with marketing scheme to induce Doctors to influence their prescriptions in specialized market on essential drugs like hypertension, cancer etc. And leaving the generic market to local players to unimportant markets like amoxicillin, vitamins and paracetamol etc.. And who’s to blame for this failure? While in the past we allow parallel drug importation and development of an expired patent it never decreased the price of essential drugs in the country. One cause maybe because of the culture on the part of the majority our Doctors being American in their thinking and two maybe because of bad marketing practices of multinational companies to spoil the Doctors and feed them with deceiving presentations that majority of Doctors in the Philippines do not trust generics products and prefer more branded ones in the prescription because of the issue on quality. Doctors believe they would not compromise the safety and well being of their patient on generics. It has therefore a major effect on their decision whether this generic drug are efficacious or not. Leaving the patient with no recourse but to adapt to their Doctor suggestion rather than making a better choice in buying an alternative generic in the Drug Store. Another cause of failure is that the industry work as a cartel especially in the side of distribution. Multinational companies drug are distributed by Zuellig Pharma and Metro Drug. It charges a toll fee of 12-15% of the cost of your drug plus 15 to 25% distribution fee. No wonder why your drug cost 25% to 40% more because of the cost of distribution. Metro Drug is used to be a competitor of Zuellig in the distribution is now owned majority by Zuellig. They are one and the same. Another cartel that pushes your cost of medicine one of the highest in Asia is Mercury Drug. The first channel cartel to bring your medicine to the market is Zuellig and another cartel works when you buy your drug. It is Mercury Drug who has nationwide distribution outlets of more than 1,000 stores. While the drug company spend millions if not billions in promoting the drug to induce the Doctor to prescribe that pushes the cost of the drug. The drug company works as a slave of Mercury Drug. Mercury Drug normally asks the drug companies for 25 to 40% discount. Mercury Drug can threaten a drug company not to order if it will not accede in giving discounts and can leave this drug company to close shop. Where will the drug companies pass on these discounts? It is the end user …. The patient.
While our government did its part in passing the Generics Law, it has failed to address the defect of the law. When majority of our Doctors have little faith in generics it should have strengthen its regulations in importation of quality yet affordable medicines just to correct the false assumption. The government could have at that time used its influence in educating more the public on the benefits of generics and become stricter in regulations just to erased the doubts of Doctors on the value and issue of generics. While the government by this time maybe in the right direction of putting limit to the prices of essential drugs and it force multinational companies and UNILAB to reduce their prices by as much as 40%. It does not adequately address the issue of when we will be having a comparable drug prices in Southeast Asia. In fact it will result more to prescriptions for the multinational companies because their prices is now comparable to generics. Doctors would rather choose a trusted brand than choosing a generic. Rather than helping now the generics company in the end it will result to killing the local generic companies. If we really want a lower drug prices in the Philippines we should have a strict government regulation both also in marketing and distribution which our lawmakers had failed to appraised and an educational information to the public about the value of generics. It is also high time for multinational companies that profited billions in the past to do their share for social responsibility. To survive they must acknowledged now that it is now a period of give and take relationship just like their marketing strategy.
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