Ensuring Access to Safe, Affordable

and Quality Essential Medicines

Edelina Padilla-Dela Paz, M.D.
College of Medicine
University of the Philippines Manila
February 2, 2010
Health is a basic human right.

Access to medicines is a basic part of

primary health care.

*International Covenant on Economic, Social and Cultural Rights

**Declaration of Alma Ata
It is the responsibility of the state to ensure that
the people have access to quality health care.

1987 Philippine Constitution

ARTICLE XIII
Section 11. The State shall adopt an integrated
and comprehensive approach to health
development which shall endeavor to make
essential goods, health and other social services
available to all the people at affordable cost.
1987 Philippine Constitution

ARTICLE XIII
Section 12. The State shall establish and
maintain an effective food and drug
regulatory system and undertake appropriate
health, manpower development, and
research, responsive to the country's health
needs and problems.
In the Philippines, access to
medicines is an economic
privilege.
 Medicines are expensive and
unaffordable, especially for the poor.

What the lowest-paid government worker will

have to spend for a 4 week course of omeprazole
for peptic ulcer disease
– 70% of monthly income for the innovator
brand
– 14.5% for a generic product

Health Action Information Network , Medicine Prices and Availability Survey in the Philippines, 2009
 Comparison to International Reference
Prices
Medicine Number of times more
(Generic name) expensive than international
All formulations below
Type of Drug/
reference prices*
are as cap/tab Indication
Originator brand Lowest priced
product generic product
Diclofenac
50 mg
Pain reliever 105.32 23.46
Metronidazole
500 mg Antibiotic 74.37 22.39
Omeprazole For peptic ulcer
20 mg disease 71.43 14.65

*In private pharmacies surveyed in the HAIN Medicine Prices and Availability Survey, 2009
 Medicines have low availability,
especially in the public sector.

% Availability*
Private sector
48.1
Originator brand products
Private sector
61.1
Generic products
Public sector
31.0
Generic products

*availability of 30 selected essential medicines in HAIN Medicine Prices and Availability

Survey, 2009; Botika ng Barangay outlets not included in public sector survey
Irrational use of medicines
prevails.
 Top 10 Therapeutic Classes in the Philippines in
Terms of Counting Units Sold
Therapeutic Classes Indications % Share
Infant Formulas Nutrition Supplement 22.63
Electrolyte Solution Over 100 mL Fluid and Electrolyte Replacement 13.34
Standard Solution Over 100 mL Fluid and Electrolyte Replacement 10.93
Other General Nutrients Nutrition Supplement 5.23
Vitamin C Including Mineral
Vitamin Supplement 4.23
Combinations
Non-narcotic Analgesics Pain Relief 3.99
Expectorants Cough 2.87
Multivitamins Without Minerals Vitamin Supplement 2.73
Multivitamins + Minerals Vitamin Supplement 2.59
Tonics Vitamin Supplement 2.45
Others -- 29.01
Philippine Pharmaceutical Industry Fact Book, 2008
Questions of drug quality persist, in
part due to the limitations of the
Food and Drug Administration.
Why?
From manufacturing to distribution to retail,
the drug industry in the Philippines is an
oligopoly.
 *

Mercury
Drug Store (80%)

From Health Policy Notes – Department of Health, 2008 and

Sabangan, AR, GMANews.tv Special Report, 2009 *owns 70% of Interphil
Philippine Pharmaceutical Industry Factbook, 2003
 Sixteen of the top 20 drug companies in
the Philippines are multinational firms with
combined sales of P58.23 billion in 2007,
nearly eight times more than the
Philippines’ P7.39 billion GDP in 2008.

AR Sabangan, GMANews.tv Special Report, 2009

Philippine Pharmaceutical Industry Factbook, 2008
 How the dominant drug companies
increase the cost of medicines
• Pharmaceutical patent system
• Transfer pricing
• Advertising and drug promotions
 Pharmaceutical Patent System
• Adopts WTO-TRIPS
• Patent essentially grants the patent
holder a monopoly for 20 years
• Patent holders and supportive
governments justify high prices as a
way to recoup investments in
research and development
 Pharmaceutical Patent System
• Industry estimates for R&D on each
new drug range from $350-500
million, while independent estimates
range from $30-160 million
• Revenues from a single patented
drug can reach over $1 billion in a
year
Third World Network, 2001
 Pharmaceutical Patent System
• Evergreening refers to ways used by
patent holders to extend their
monopoly by filing patent
applications on their product shortly
before the expiration of the original
patent
 Pharmaceutical Patent System
• Evergreening applications are filed
for different isomeric forms,
derivatives, dosing route, biological
targets, etc. for the same molecule
 Pharmaceutical Patent System
• The Cheaper Medicines Act contains
provisions that intend to prevent
evergreening, and is being tested in
current patent lawsuits in the
country (e.g. Unilab vs. Pfizer over
atorvastatin)
 Pharmaceutical Patent System
• In the 2001 Doha Round, WTO
allowed “flexibilities” in TRIPS largely
due to the clamor of country
members, particularly from Africa,
who had become even more severely
marginalized as a result of WTO
policies
 Pharmaceutical Patent System
• Country members can override existing
patents in the interest of public health
• Since then, such moves have been met
with opposition and lawsuits from
companies and their supportive
governments (e.g. Sanofi Aventis vs.
Thailand over clopidogrel)
 Transfer Pricing
• Parent companies export raw materials
to their subsidiaries
• A study in Pakistan on transfer pricing
found that parent companies export at
rates as high as 300-700 times the price
of the raw materials in the open market

Third World Network, 2001

 Drug Advertising and Promotions

Average Manufacturer/Trader
Cost Structure
% of total
cost
1. Cost of goods manufactured and sold 49.2%
2. Operating and selling expenses 40.5%
3. Corporate tax 3.3%
4. Net profits 7.0%

Philippine Pharmaceutical Industry Factbook, 2003

 Average Manufacturer/Trader Cost
Structure
% of Total
Cost
2. Operating and selling expenses 40.5
2.1 General management costs 6.4
2.2 Selling costs (including meetings, seminars, 17.25
conferences)
2.3 Advertising and promotion (including 11.53
sponsorships and special conferences)
2.4 Research and development (clinical trials etc.) 0.61
2.5 Royalties 0.7
2.6 Interest and bank changes 1
2.7 Other operating and selling expenses 3.01
Philippine Pharmaceutical Industry Factbook, 2003
 Drug Promotion and Advertising
• Big, aggressive campaigns virtually
ensure market dominance and brand
premium
• In a four week monitoring period, of the
10 most frequently aired drug-related TV
ads, 8 were from a single company
(Unilab)

Health Action Information Network, 2009

Drug promotion and advertising to
the public and to health
professionals contribute to
widespread irrational drug use.
 Top 10 Therapeutic Classes in the Philippines in
Terms of Counting Units Sold
Therapeutic Classes Indications % Share
Infant Formulas Nutrition Supplement 22.63
Electrolyte Solution Over 100 mL Fluid and Electrolyte Replacement 13.34
Standard Solution Over 100 mL Fluid and Electrolyte Replacement 10.93
Other General Nutrients Nutrition Supplement 5.23
Vitamin C Including Mineral
Vitamin Supplement 4.23
Combinations
Non-narcotic Analgesics Pain Relief 3.99
Expectorants Cough 2.87
Multivitamins Without Minerals Vitamin Supplement 2.73
Multivitamins + Minerals Vitamin Supplement 2.59
Tonics Vitamin Supplement 2.45
Others -- 29.01
Philippine Pharmaceutical Industry Fact Book, 2008
 Top 10 Prescription Drugs based on Value
Rank Prescription Brand Company Indication
1 Norvasc Pfizer Hypertension
2 Ventolin GSK Asthma
3 Plavix Sanofi-Aventis Thrombosis
4 Augmentin GSK Infection
5 Neobloc GX International Hypertension
6 Lipitor Pfizer Hyper-
Cholesterolemia
7 Tazocin Infection Infection
8 Zegen United American-Unilab Infection
9 Plendil ER AstraZeneca Hypertension
10 Seretide GSK Asthma

Philippine Pharmaceutical Industry Fact Book, 2008

Top 10 Prescription Drugs based on Value

Not reflective of first-line

treatments in accordance with
scientific guidelines
 Stunted Local Industry
• Almost wholly dependent on imports—
95% of raw materials are imported
• No manufacturer of active
pharmaceutical ingredients in the
country
• Research and development of
innovations very limited

Philippine Pharmaceutical Industry Fact Book, 2008

 Food and Drug Administration
• In 2006:
Ratio of Food and Drug Regulation
Officers to number of establishments –
1: 202

• Ratio of evaluators to registered

products— 1:1,513
Government Programs and
Policies through the Years
Philippine National Drug Policy,
1987 (revised in 1992)
P – people empowerment
Q – quality assurance
R – rational drug use
S – self-reliance
T – targeted procurement
 Philippine National Drug Policy, 1987

• Generics Act of 1988 as one of the

initial manifestations
• Implementation delayed for two
years
• Initial vigilance in monitoring the
implementation waned with changes
in DOH administration
 Local Government Code 1991

• Devolution of health care delivery at

the primary level to local
government units
• Created new problem of provision of
drugs by LGUs
 Botika ng Barangay
• European Commission study on
functionality, monitoring and cost of the
BnB program:
“Low turnover and lack of up to date
prescription registers indicate not only that
economic viability is often still low but that
there is also little control and information
on dispensing behavior.”
EC-HSPSP, 2009
 P100 Program
• Provision of full course or one month
treatment course for 100 pesos or less
• Issues of sustainability

3rd Medicines Transparency Alliance Forum, 2010

 Maximum Drug Retail Price
• Since August 2009, maximum prices of 5
medicines were mandated to be pegged
at 50% the price of the originator brand
• Prices of 16 other medicines were
voluntary reduced by companies (as the
“Government Mediated Access Price” or
GMAP)
 Maximum Drug Retail Price
• Does not make medicines more affordable
for the poor
• Determining a “fair price” based on actual
cost is very difficult due to the opaque drug
industry
• Experiences with price control in other
countries, notably in the EU, illustrates that it
is most effective in the context of universal
health insurance coverage or universal
health care systems*
*Medicines Transparency Alliance Forum, 2010
Challenges on the way forward
 Challenges
• Government must play a dominant role
in ensuring access to safe, affordable,
and quality medicines for all Filipinos,
especially the poor
 Challenge: Providing medicines,
especially to the poor, for free
• Remove VAT on medicines
• Centralized procurement at the
provincial government level to provide
for medicines up to the barangay level
• Government health facilities and local
government units must increase budget
allocations to provide medicines at the
primary level and in hospitals
 Challenge: Providing medicines
especially to the poor for free
• Philhealth coverage of medicines must
be increased and include outpatient
drugs
• Universal coverage under Philhealth can
eventually support a more sophisticated
price control system
 Challenge: Towards self-reliance in
drug production
• Government must support local drug
manufacturers through tax exemptions,
technical assistance, loans, discounts or
exemptions from regulatory fees
• Develop local capacity to produce raw
materials, eventually including active
pharmaceutical ingredients
 Challenge: Towards self-reliance in
drug production
• Production of certain drug types can
eventually be restricted to local
manufacturers only
 Challenge: Promoting accurate,
objective drug information to the
public and to health professionals
• Develop a wide-reaching information
system at the level of the
consumers/general public and at the
level of health professionals
 Challenge: Promoting accurate,
objective drug information to the
public and to health professionals
• Ban drug and food supplement
advertising to the public
• Ban promotional materials and drug
samples
• Restrict drug sponsorship of seminars,
conventions and ban drug company-
sponsored recreational activities
 Challenge: A strong regulatory body
than can ensure the quality of all
medicines in the country
• Strengthen and scale up the FDA by
increasing its budget, human resources,
equipment, and technical capacity
• Streamline number of registered drugs
and develop more stringent regulations
for the registration of new ones in
consideration of available number of
products for a drug
 Challenge: Support research and
development of herbal medicine as a
mainstream treatment
• Increase research on curative potential of
herbal medicines
• Strongly promote the use of scientifically
validated herbal medicine
These changes in the pharmaceutical
systems must be accompanied by
complementary changes in the health
care system and the education system of
health professionals.
“The need of Filipinos for efficacious and
affordable medicines can only be met
when a strong national health care
system is in place and under a
government whose policies are in the
best interest of its people.”

Council for Health and Development, 2008

Access to medicines is a right.
At the same time, a primary perspective of
government should be the promotion of
good health and prevention of illness,
through the attainment of optimal
economic and social conditions, such
that the people will need only the
minimum amount of medicines.