Wednesday, June 10, 2009

Poor and Sick Filipinos Pay Dearly for Failure of Cheaper-Medicines Law


MANILA — A law that was supposed to provide cheaper and quality medicines to Filipinos has failed to deliver on its promise — a promise that was hamstrung by the law’s own defects and the seeming inability of the government to muster the political will to go against transnational drug companies, according to health and consumer advocates.

Called “The Universally Accessible Cheaper and Quality Medicines Act of 2008,” or Republic Act 9502, the law sought to correct what many called a scandalous anomaly in a poor country like the Philippines, where medicines and drugs are among the most expensive in Asia.

The law “proved to be irrelevant and useless,” said Dr. Gene Nisperos, vice-chairman of the Health Alliance for Democracy (HEAD) in a conference last week. “In hospitals, whether private or public, prices of medicine have not changed with this law,” he said.

Because of its many flaws, RA 9502 has failed to bring down the “inhumane” prices of drugs and medicines, said the Consumers’ Action for Empowerment (CAE).

Amid the usual finger-pointing and bickering, the CAE said that the Department of Health (DOH) isn’t the only party accountable for the failure. “Although we’re in agreement that the Senate and other government fora should take the DOH to task for its failure in implementing the law, we’ve been saying that the law itself has inherent flaws,” Nisperos said.

TNC Control

The consumer group traces the uselessness of the law largely to its failure to break “the control of transnational corporations on all aspects of the [drug] industry.” Estimates put the share of transnational companies in sales alone of medicines and pharmaceuticals in the Philippines from 68 to 72 percent. Last year, pharmaceutical sales in the country amounted to P116 billion.

Health and consumer advocates protesting the high price of medicine. (Photo by Marya Salamat /

According to the group, RA 9502, signed by President Arroyo on June 6, 2008, also failed because, although between 80 and 90 percent of essential drugs being sold in the Philippines are no longer patented, the law did not provide for the development of a sound local drug industry that could have taken advantage of the fact that previously patented medicines can now be developed by local manufacturers.

CAE criticized the policy of dependence being fostered by RA 9502, which gives particular focus on drug importation, including parallel importation.

While it would seem that consumers can benefit from parallel importation, it actually discourages the development of the local drug industry. In fact, RA 9502 has not shown any support to local manufacturers, said Eleanor Nolasco of Health Action Information Network (HAIN). Eventually, it will kill the Philippine pharmaceutical industry, she said.

Moreover, the law failed to make sure that parallel importation, such as it is, will redound to the benefit of poor Filipinos.

Parallel Importation

Under parallel importation, the same drug that is manufactured and priced high in the Philippines can be imported – with or without the consent of the patent owner — from another country and sold here for prices that are several times lower than the ones produced locally. This is a method that transnational drug companies like Pfizer oppose because it obviously cuts their profits in countries where drugs are expensive, like the Philippines.

At first glance, parallel importation seems beneficial to consumers. But, according to the health-advocacy group KilosBayan Para sa Kalusugan, this is not necessarily true.

According to the Philippine International Trading Corporation (PITC), the trading and importing arm of the government, drugs that can be imported from India or Pakistan can be sold at half the price in local pharmacies.

But KilosBayan, in a primer, said these imported drugs can be sold at a much lower price. It cited Ponstan (mefenamic acid), which can be bought in India for the equivalent of P2.58 and in Pakistan P1.29. And yet, the same pain killer is sold for P11.25 in the 10,000 or so Botika ng Barangay outlets set up by the Arroyo administration, which promised half-priced medicines. Ponstan is sold for P25 pesos in commercial pharmacies.

“Why set the reduction of prices at just half of commercial prices when this could be lowered even more?” KilosBayan asked in its primer, citing the prices in India and Pakistan.

KilosBayan said parallel importation has not been maximized to the advantage of consumers. In fact, according to the Council for Health and Development, a health NGO, “the provisions on parallel importation bear no significant impact on the prices of medicines because even before the passage of the law, parallel importation is utilized by the government in its Botika ng Barangay program.”

Besides, the government only allots P1 billion for parallel importation — in an industry that is worth P100 billion.

Drug Cartel

Another major factor why the cheaper-medicine law failed to make a dent on the high cost of drugs and medicines is the fact that, according to data from the PITC, 80 percent of drugs being manufactured for multinational corporations is done by one company. Moreover, as much as 70 percent of wholesale distribution is handled by a sister company.

In the end, according to CHD, “more than 60 percent of the retailing of finished products is sold through Mercury Drug, which has more than 600 outlets nationwide.”

In other words, there’s an existing cartel of drug manufacturers and distributors that continue to dominate the market despite RA 9502. Indeed, one of the law’s biggest defects is it did not provide for the creation of a regulatory board for drug prices – a board that could have broken the stranglehold of this cartel — despite the strong clamor and recommendation of health-sector representatives and people’s organizations during public hearings when the law was still being crafted.

As a result, the law squandered an opportunity to ensure the democratic representation of consumers and other stakeholders that could ensure that the law’s intent is followed.

Currently, the task of monitoring medicines being sold in the country is with the Bureau of Food and Drugs, an agency under the DOH that progressive health-sector representatives consider as weak.

And to think that RA 9502 gives President Arroyo the power to impose price caps on the retail prices of drugs and medicines. She never exercised that power.

In fact, on the first anniversary of RA 9052, leaders of the Pharmaceutical and Healthcare Association of the Philippines (PHAP) were personally thanking President Arroyo for the government’s support in ensuring that their business would remain “viable.”

PHAP executive director Reiner W. Gloor thanked President Arroyo for assuring them that “we religiously implement laws that uphold patent protection.” PHAP, an industry lobby group, is largely composed of multinational drug manufacturers and providers of most of the country’s patented medicines.

Generic Drugs

The domination of the local drug industry by TNCs also has an impact on the affordability of medicines and on the campaign to lower prices through the prescription of generic drugs. Because not all drugs and medicines have their respective generic counterpart, the situation becomes even dire.

According to CHD, there are some 600 drugs in the Philippines that are considered essential. But of this number, only 200 are made by Philippine companies. The other 400 off-patent drugs do not have local generic counterparts and are thus dependent on importation, CHD said.

This partly explains why the use of generic drugs is low in the Philippines. In 2006, for instance, generic drugs account for only five percent of medicines sold locally. Compare that to the 50 percent generic-drug use in the United States.

Token Legislation

Although the intent of RA 9502 is to address the problem of expensive medicines, it became an example of token legislation because it did not support the local drug industry and enable the health sector to monitor its own pharmaceutical policy. This much is clearer among the growing number of young health workers.

In a rally by nurses demanding an increased in their entry-level salary grade, the health workers criticized the government’s disproportionate response to the AH1N1 or swine flu epidemic. According to them, other diseases that are much more common and much deadlier – such as tuberculosis or diarrhea — have largely been ignored.

“Despite the so-called cheaper-medicines law, we haven’t brought down the incidences of poverty-related diseases. Instead, morbidity and mortality rates have even increased,” Nolasco, of HAIN, said. For one, there’s still widespread malnutrition. “It’s not only fatal, it can also cause learning difficulties and disabilities,” Nolasco pointed out.

To this day, Nolasco added, diarrhea still kills; cholera has returned; pneumonia, broncho-pneumonia, and other illnesses that were supposedly controlled years ago are manifesting again. There is also a resurgence of malaria and dengue cases, she said.

Apart from rising death rates due to poverty-related diseases, or diseases that sprung and became fatal because of lack of proper nutrition and sanitation, among others, Nisperos of HEAD also cited the impact of the law on the second biggest health problem of Filipinos — chronic diseases such as hypertension. “If you are stricken with it, you’re forced to be under medication for the rest of your life.”

Without discounting the number of the dying, Nisperos called attention to the growing number of people who can’t function well because of their failure to acquire medicines for their chronic illnesses. “We’ve been saying for a long time — our peoples’ inability to access their needed medicines don’t just result in many untimely deaths, it also results in many suffering pain instead of becoming healthy, productive citizens.” There are more people, Nisperos said, “whose illnesses get worse because they can’t buy the medication they regularly need.”

And being a member of PhilHealth won’t help either, Nisperos said. “Further illustrating the inutility of the cheaper-medicine law, it didn’t even get PhilHealth’s cooperation, as PhilHealth doesn’t cover medicines for chronic diseases such as hypertension, diabetes, and heart ailments.

RA 9502, in other words, “has absolutely no impact on health services,” Nisperos said. ( [1]

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