Last week, the Medicines Transparency Alliance (MeTA) held a one-week activity in Manila. Last Monday and Tuesday was a workshop for local civil society organizations (CSOs) engaged in health, consumer protection, government procurement and policy. I was invited in this event to represent our think tank, Minimal Government Thinkners, Inc. The next three days, Wednesday to Friday, was the MeTA 2nd National Forum, attended by various sectors and groups, from government to pharmaceutical companies, professional organizations to CSOs.
MeTA is an international alliance of various stakeholders pushing for greater access of more people around the world to essential medicines by improving transparency and accountability. Its international secretariat, funded by the UK government, then the World Bank, World Health Organization (WHO), various governments, some pharmaceutical companies and big international CSOs, is helping the formation of country “branches”, like MeTA Philippines.
The 3-days forum tackled lots of interesting topics and issues. For lack of space, this paper will discuss only four of them: (1) lack of health insurance, self-medication by people, drug advertising; (2) local government medicines warehousing, (3) taxes and fees on medicines, and (4) IPR confiscation of innovator drugs. A short discussion of my respective proposals for these issues also follow.
First, the lack of health insurance by many people, especially private health maintenance organizations (HMOs), forces them to self-medicate when they get sick. A visit to government hospitals and physicians (either free or low fees) means long queu, while a visit to private physicians and clinics means high costs in physicians’ fee and possibly diagnostic tests. So to cut costs or avoid long queuing, people self-medicate and buy medicines that are most popular, as advertised in tv, radio, newspapers and outdoor billboards. Pharmaceutical companies know this, so some of them spend a lot of money on advertising, which leads to higher medicine prices, aside from possibly exaggerating claims of beneficial power of their medicines.
My thought on this is that the HMO sub-sector should be deregulated by the government, attract more companies, local and multinationals, to come and provide additional competition in the field, so that various income brackets can be served. For instance, richer people and subscribers can pay P20,000 per year or higher for wider health coverage, middle class people can get P6,000 to P15,000 per year, others can charge P1,000 to P5,000 per year for narrower health coverage (say maximum P20,000 hospital bill in one year, X number of free physician visits, Y set of free diagnostic tests, and so on. The important point is that even poor people can get health insurance on top of their PhilHealth membership to encourage them to see a health professional first before they buy any medicine. This will also neutralize any untruthful claims by heavy drug advertising as patients will listen more to their physicians, not to advertisers.
Second, medicine storage and warehousing by local governments for their constituents. A presenter from the WB showed some of his findings, complete with pictures: dirty warehouses, rodents, garbage and medicines mix up in one room. Warehouse personnel who do not make a regular inventory of medicines, how many have been disposed, how many are left, how many and what drugs are expired. Warehouses that do not have temperature control; one warehouse has a thermometer, fine, but the room temperature is several degrees hotter than the required minimum temperature for proper storage of some medicines. Some local health personnel release and give away expired drugs.
My proposal on this is that those warehouses by local government units (LGUs) should be closed down, LGUs can issue vouchers to their poor and needy constituents, the latter will go to government-accredited Botika ng Bayan or Botika ng Barangay to get the medicines, and the LGUs will pay those drug outlets later. There will be no need for LGUs and DOH then to train personnel for medicine procurement, warehousing, storage and inventory as internally proposed (using WB loans or additional budget appropriations) as these skills are already available in those government-accredited drug outlets. The comparative advantage of LGUs is politics and more politics, not efficient health care provision.
Third, taxation of medicines, apart from taxation of firms dealing with medicines manufacturing, marketing, distribution and retailing, remains high. Among these taxes are: import tax, documentary stamp tax, municipal or city tax, value added tax (VAT). Industry estimates put those various taxes at around 20 percent of the retail price. This means that the government, national and local, is responsible for expensive medicines by around 20 percent. And yet the government is “championing” cheaper medicines? This is pure irony, if not hypocrisy.
Removal of many taxes on medicines is definitely one sure way to bring down the price of this essential commodity. And this will require amending the law on National Internal Revenue Code. I proposed during the open forum that MeTA Philippines can possibly spearhead this measure and the affiliated stakeholders can back them. Our think tank will definitely support MeTA or whoever will spearhead this move.
Fourth, local pharmaceutical industry figures show that only 10 percent of all medicines in the country are patented, 90 percent are already off-patent. If we are to follow the logic, “patented = expensive” and “off-patent = cheap” medicines, then we are supposed to be expecting only 10 percent of all medicines to become cheap as a result of intellectual property rights (IPR) confiscation provisions in the “Cheaper Medicines Law” via (a) international exhaustion and parallel importation, (b) government use, (c) compulsory licensing), and (d) early working principle. The World Health Organization (WHO) even has a more dramatic figure: only one percent of all essential medicines in the world are still patented, 99 percent are off-patent. So the fuss on “patented = expensive, non-accessible to the poor” logic does not hold water, because 99 percent of all medicines in the world should be cheaply available and accessible to the poor.
My proposal on this is nothing. Said provisions are now legal, have implementing rules, they only need to be implemented strictly. I only have a short advice to some groups who strongly supported those IPR confiscatory provisions: that they admit that their advocacies are driven mainly by envy, by lack of appreciation of the need for continuing medicine innovation, by hatred of multinationals, even hatred of global capitalism.