Tuesday, June 30, 2009

CAFMI, free market voice in Kyrgyztan

I have 2 friends in Bishkek, capital of Kyrgyztan -- Seyitbek Uzmanov and Mirsulzhan "Michu" Namazaliev. They are the leaders and co-founders of the Central Asian Free Market Institute (CAFMI. Before, I have corresponded with them by email only. But last April this year, I have personally met them in Los Angeles, California, during the Atlas Liberty Forum.

The Institute was officially launched only last week, June 23. Michu, also CAFMI Executive Director, explained briefly what they want to achieve with putting up a new think tank in Kyrgyztan. He said,

“We intend to become the leading think-tank for the whole region, by providing constructive options for economic reforms.”

CAFMI will promote free-market reforms by producing relevant, scientifically rigorous, and constructive research and policy proposals.

This year, the Institute plans to hold two “Liberty Camps” for students in the fields of economic and personal freedom. One will be in English, the other in Russian. CAFMI will also launch within days a new website (www.freemarket.kg) and an ambitious campaign (www.freetrade.kg) to create a free-trade region in Central Asia, to facilitate exchange and wealth-creation throughout the countries of Central Asia.

The Institute's Board of Directors include Emil Umetaliev (CEO of Kyrgyz Concept), Krassen Stanchev (Chairman of the Institute of Market Economics, Bulgaria), Tom G. Palmer (Atlas Economic Research Foundation’s Vice-President) , Timur Shaikhutdinov (Free Generation Liberal Youth Alliance’s Co-Chairman) , and Seyitbek Usmanov (Institute’s a Co-Founder).

CAFMI directors hope to see establishment of branches in Osh (Kyrgyzstan) , Almaty (Kazakhstan) , and Dushanbe (Tajikistan) within the next two years.

I congratulated Seyit and Michu for their great effort. These guys are young and very devoted to free market principles. I wish they will be successful in "conquering" their neighbors in central Asia, so that there will be a real free trade zone there.

Monday, June 29, 2009

CSOs and State 7: Public School Library with Minimal Government, BftB

In classic statist and welfarist philosophy, education, from primary to tertiary levels, should be government responsibility, not personal or parental responsibility. Thus, everything from school buildings to library to school tuition, etc. should be handled and funded by the State or by local governments.

But there are plenty of initiatives around the world where individuals, corporations, private foundations,  civic groups and other civil society organizations (CSOs) are involved in helping the poor have access to good quality education. One of such groups or projects is the Books for the Barrios (BftB, http://www.booksforthebarrios.org/home.php) project.

My good friend, Ramon "Monchit" Arellano, a Filipino working at AT&T in northern California, has been helping this project for several years now. Not only himself, but also his entire family, wife and 2 kids; then some of his fellow Filipino employees of AT&T. They bring their old books, solicit used books from their friends, bring those to the BftB office, help pack the books into big boxes, to be shipped to the Philippines, and BftB staff here distribute the books to various barangays or villages, in public elementary schools which have no or very small library. Monchit below, being intereviewed by the local media.

Monchit also helped raise funds for the project about 2 or 3 years ago, when he heard that BftB was lacking money for its various projects, Monchit ran the San Francisco marathon, with an awareness-raising campaign to raise money. His target of raising $3,500 from his friends and other people was short by only about $100, to which he turned over the entire amount to the BftB.

BftB leaders were so impressed by his action and support. It later decided to return the favor by naming a library in his name. The place will be in a public elementary school in Brgy. Sapang Bato, Angeles City. This school has several hundred students, about 95 percent are Aetas, one of the indigenous peoples in the Philippines.

Last June 18, 2009, the library was officially opened. It's called "Ramon L. Arellano II Library". In the picture, Monchit, assisted by his wife Mimi, cutting the ribbon.

Inside this library are slightly-used books, various educational materials, even stuffed toys, for elementary students. All of those were from the US. Here are some pictures of the books and toys. Notice the painting in the wall -- they are Aeta children in a rural but clean environment. Where there is better education, a good and hopeful future is not far away.

The library building was constructed by the city government. The salaries of the teachers and librarian are also from the city government. But everything inside the library are from the BftB.

This is the main school building. Beside it by the way, is a Gawad Kalinga (GK) housing project, also for the Aeta households. But most of the students of this school live in far sitios and barrios, some students walk as far as 4 kilometers away from their house.

The main beneficiaries of this library are the Aeta children. Some of the male students here were in their traditional G-strings attire, the females were in some of their beautiful dresses, because they have a dance presentation during the launching ceremony. I noticed that they were well-behaved. Just one instruction from their teachers and they immediately follow. They are really disciplined, or they are only respectful of their guests from the cities, I don't know.

The female students, they have a song and a "fashion show" presentation during the program. Their dress could be the best they have in the house, I don't know. Their presentation was cute, funny and very entertaining. Talk about innocent and cheerful girls.

After the formal program, there was a modest "merienda" or snacks for the children. Here, some students taking their snacks. They just squat, not enough chairs, modest food but they really enjoyed it, no left over!

Monchit said that he was so honored by the presentation and the naming of the school library in his name, he promised that he will make his contribution to the BftB a "lifetime" commitment.

Yes, voluntary, charity support by individuals, corporations, foundations, NGOs, can become huge in caring for the less-privileged people. Governments do not have the monopoly of doing this work, and so the taxes and fees that they collect from the people should not be high and many.

See also:

An explosion of drug stores

Last week June 25, I dropped by Region 1 Medical Center in Dagupan City, Pangasinan, after my meeting at the DENR office not far from that hospital.

What amazed me was the huge number of pharmacies and drug stores in front of the hospital. I counted 16 total! Front-right of the hospital, 7: FGG generics, Maia's, Buy Low, Neslen, Aurora, D'Calidad, and Cyprus. Front-left of the hospital, 6: Roslin, REM Citimed, Urduja, St. Vincent, Pong's, The Generics. Beside the hospital, to its left, 2: Mercury and another Roslin drug store. And within the compound is the hospital pharmacy.

Surely the patients of that hospital have a wide range of options of where to buy their medicines cheaply. I think that with this stiff and fierce competition among different drugstores and pharmacies, medicine prices should be generally low.

The next question is whether all the medicines sold in those different drugstores are safe and real, not the counterfeit, sub-standard and unsafe ones. How would patients know? Not a bit, almost. Unlike a fake bag or shoes or DVD, fake drugs are difficult to discover if one is an average consumer.

Nonetheless, one goal of the cheaper medicines law, of having cheaper medicines, is partially achieved by having a stiff competition among different drug stores and pharmacies.

Drug price cut without government price control

I read the news report below in the Inquirer today. Sanofi Aventis is cutting the price of its anti-diabetes medicine for patients affiliated with ISDF, a health NGO. I think this is a welcome move, a unilateral action on the part of a pharma company to bring down the price of its anti-diabetes medicines for selected, target patients.

My brother who died of prostate cancer a few years ago, was also diabetic. It was a deadly combination, diabetes + prostate C. He was lucky to have a private HMO + my well-off sister's support who practically picked up most of the tab in his 2-years of messy and expensive treatment including chemo. The government? It was collecting taxes left and right for all the medicines that my dying brother was taking.

In the past 2 meetings of the DOH Advisory Council on price regulation that I have attended, there was a general feeling that whatever price reduction that a pharma company can give to certain patients, should be made as mandatory and "universal price" for all other patients.

I am not exactly in favor of such proposal because the pharma companies, domestic or multinational, that extend such kind of price cut to certain groups or patients, have educational programs for their patients. They know who are the people buying their medicines, especially the poor patients, so the pharma companies that initiated the price cut can also give additional medical advice, like how to avoid diabetes in the first place. If such initiative is ok, Sanofi will make it a nationwide program, meaning nationwide price cut of their anti-diabetes medicine. Maybe through the patients' pysicians, if no NGO support groups like ISDF are not around.


Price of antidiabetes medicine cut

By DJ Yap
Philippine Daily Inquirer
First Posted 00:07:00 06/29/2009

MANILA, Philippines—Combating diabetes among indigent Filipinos has taken a step for the better—and the cheaper—thanks to a new partnership between the pharmaceutical company Sanofi-Aventis and the Institute for Studies on Diabetes Foundation Inc. (ISDF).

The two institutions launched on June 23 a new program called “Innovation for Life,” a new, equitable, tiered-pricing approach toward increased access to insulin glargine (Lantus)—Sanofi-Aventis’ diabetes medicine—among patients who could otherwise not afford it.

Dr. Ricardo Fernando, the founder of ISDF, said the project, which is seen to benefit more than 500 ISDF patients at the outset, was developed “not only for the next few months but for the long term.”

Patients who are accepted to the program stand to get substantial discounts on their Lantus medication, which, depending on their condition, typically costs from P100 to P1,000 every day, organizers of the project said.

“We have to remember that the most expensive medicine is the one that does not work,” Fernando said at the launch of the project at the ISDF offices in Marikina City.

Dr. Benedict Blayney, vice president for medical affairs of Sanofi-Aventis in Asia-Pacific, said the program would also have an education component, in which poor communities would be taught ways to treat or even prevent diabetes.

“We are dipping our toes in the water. If it works well here, we are open to extending the program to other institutions in the Philippines,” Blayney said.

Diabetes mellitus, a serious chronic metabolic disease characterized by an increase in blood sugar levels, is estimated to be the cause of six percent of deaths globally. In the Philippines, it is among the 10 leading causes of deaths.

Regulating credit cards issuance

A friend wrote in his newsaper column advocating that the Philippines should also have its own "credit card law" similar to what the US government recently did. The main arguments are that the banks that issue credit cards charge usurious rate to ordinary card holders when payment is late, and the banks create various "promos" to encourage more indebtedness from card holders.

We should go slow, if not stop, asking for another set of government intervention through another law regulating credit cards.

Nobody is coerced to have a credit card, it's a voluntary act on the individual to get one or not. Unlike taxes or SSS or PhilHealth or Pag-IBIG contributions, whether you like to join them or not, whether you will use those services later or not, whether you will migrate later or retire here, and even if the administrators of those government enterprises are among the most corrupt bureaucrats in this country, you, we, are coerced to contribute to those government programs.

The last time I held a credit card was about 12 or 15 years ago. It was convenient to have a credit card, but I felt it is more convenient to have no debt, to pay in cash. When you have no money, you don't buy, unless it's very important. In which case, you should have some savings for those emergencies, or you have a well-off sibling or friend who can lend you money in cases of emergencies.

When the "five-six" lenders charge usurious rates (usually 20 percent per month), other guys would call this as exploitation. But the five-six do what the traditional banks and financial institutions would never ever do. The latter for instance don't go to the debtors, the 5-6 lenders do. The bankers are not exposed to heat, pollution, foul smell in many public markets, hold-up, etc. in giving out the loans and in collecting the debt + interest, daily.

When the credit card issuers charge usurious rates (between 1.5 to 3.75 percent per month) for late payment, they are making big money from honest card holders, but they are also pushing the less-honest card holders to dishonor the debt and just "disappear" somewhere with piles of unpaid debt.

An irresponsible person who made lots of debts by say, buying expensive appliances via credit card even if his income is small, deserves the mental torture of being hounded by the banks and their lawyers. Why is this a problem or an issue? It's a non-issue for me. So why call in the State to come in and regulate the card issuers?

Besides, with only 6 million card holders out of 35 million Pinoys in the labor force, that's still a small percentage. Besides, I think actual card holders are only about 4 million as some people have 2 or more credit cards and hence, are counted twice or thrice or more as "separate" card holders. There is not enough competition among the banks that issue credit cards.

And should government come in to have another set of credit cards regulation, the legislation that will create such move will most likely create another new bureaucracy, maybe a "Credit Card Regulatory Authority (or Commission)". New bureaucracy, new bureaucrats with new offices and/or own building will mean new or higher taxes to finance the newly created bureaucracy, etc.

Sunday, June 28, 2009

Hot Meetings and Cold Weather

Note: this is my article last week, it has plenty of links which may not be shown here. To see those links, visit this online paper where this article was first posted:


There have been a number of recent reports showing that current global cooling is getting more pronounced and obvious, sometimes adversely affecting agricultural production.

Among these reports (all dates refer to 2009) are:
(1) Crops under stress as temperatures fall (The Sunday Telegraph, UK, June 14);
(2) Canadian Wheat Output May Fall on Dry, Cool Weather (Bloomberg);
(3) Southeastern Missouri farmers try to overcome wet spring, soggy crops (TV4 Kansas City);
(4) Canada frosts the most widespread in recent memory (Reuters, June 9);
(5) Cold weather, late-blooming flowers stymie Washington, Oregon tulip festivals (The Oregonian, March 31);
(6) Many forecasters have one word this summer: COOL (Climate realists, June 16);
(7) Dickinson ND sees first June snowfall in 60 years (WUWT, June 6);
(8) Great British summer goes from sweltering to shivering in just a week (Daily Mail, June 6);
(9) Shoveling hail in sandals? NJ (wcbstv.com, June 16);
(10) First ever icewine in Brazil (ICECAP and WUWT, June 16).

There are many other news and blog reports, complete with pictures, how global cooling is showing and affecting agriculture in various parts of the world. Here in the Philippines, there are a few reports how the early onset of rains this year in the Philippines – it started mid-April, instead of June – has affected summer crops. I personally saw for instance, an onion farm in western Pangasinan that suffered heavy losses when about 2 weeks before scheduled harvest by end-April, the onset of rains in mid-April damaged the onions. These onion farms are established by onion farmers from Nueva Ecija only during the summer months, as the land will revert back to ricefarms for 2 cropping period starting June.

It should be noted though that when media people report about the cooling trend (early rains and typhoons, often cloudy skies), they still refer to it as “climate change due to global warming”. If there is global warming, then there should be less rains, less clouds, more drought, more hot days, right?

The main perpetrators of the global warming hysteria are the various leaders in governments, the UN, NGOs, and some business interests. While most climate indicators point to falling global temperatures – an exact opposite of what the UN IPCC predicted of ever-rising temperatures until 2100 – there are simply too many global meetings by the above-stated group of leaders. Their goal is to hammer a post-Kyoto Protocol agreement (expiring in 2012) that will pressure if not coerce countries to drastically cut their carbon emissions which they blame as the main cause of global warming and climate change.

Last March, the UN Framework Convention on Climate Change (UNFCCC) held its climate change talks in Bonn, Germany. Then another 2-weeks meeting in the same city last June 1-12, ending only last Friday. This week, the Asian Development Bank (ADB) is holding a High Level Dialogue on Climate Change in Asia and the Pacific, June 16-17 here in Manila, and UNFCCC Executive Secretary Yvo de Boer is one of the keynote speakers.

Another UNFCCC meeting in August, also to be held in Bonn. Another meeting in late September to early October in Bangkok, Thailand. Another meeting in early November in Barcelona, Spain. And ultimately, a 2-weeks meeting in December in Copenhagen, Denmark.

These are just among the few international meetings on-going and scheduled for the next 6 months. Other rich goverments have also sponsored and hosted international meetings on their own over the past few months, with generally the same set of environment and climate officials and carbon cutting “negotiators”.

As I have shown in my recent articles in this online paper here and here, carbon dioxide (CO2) has little or no contribution to recent warming (until 1998), and much less in the current cooling. The Sun, its solar irradiance and sunspot activities or inactivity, is the main driver of climate changes (warming and cooling) in the planet.

Last June 2, the Heartland Institute sponsored the 3rd International Conference on Climate Change (ICCC) in Washington, DC. Among the speakers there was my friend, Dr. Willie Soon, the only world-reknown Asian-American astrophysicist and geoscientist at the Harvard-Smithsonian Center for Astrophysics. I met him during the 2nd ICCC last March in New York City, also sponsored by Heartland Insitute. A number of the charts that I showed in my recent talks on climate alarmism here in Manila were lifted from Dr. Soon’s presentation.

Also during the 3rd ICCC, a new report by the Nongovernmental International Panel on Climate Change (NIPCC), "Climate Change Reconsidered", was formally launched. It is the report on global warming that the UN IPCC should have written—but didnt. The 880-page report rigorously critiques the 2007 Fourth Assessment Report (AR4) of the UN IPCC, which concluded that harmful global warming “very likely” has been due to human activity in the release of greenhouse gases. The science behind that conclusion is soundly refuted in that report, coauthored by Dr. S. Fred Singer and Dr. Craig Idso. Full text of the report and related materials can be found at http://www.nipccreport.org.

The battle for sanity and reason vs global ecological central planning is a hard one. Governments and the UN, pushed by influential international NGOs and business interests that will benefit from the hundreds of billion dollars per year of carbon trading alone, are hell-bent on continuing the warming hysteria. Several hundred billion dollars more on carbon taxes, subsidies to renewable energy plants, the hundreds of new climate bureaucracies that are sprouting up in almost all countries, these vested political and economic interests conspire to continue the warming scam so that they can dictate how we should run our lives.

Yesterday, I posted this short note in facebook:

"Pondering that with the US government's (a) huge borrowings for the fiscal stimulus, (b) another huge borrowings for health care, and (c) cap and trade bill passed by the House, Mr. Obama is very successful in making taxes, energy prices and commodity prices very high, very soon."

I got 3 short comments, one of which from Vanni,

"Hi Nonoy! You are right on the money my friend. I think the U.S. has only two options. One, declare bankruptcy or inflate their way out of their debts. Your guess is as good as mine. Cheers."

I thanked them for the comments. Obama's federal carbon tax alone will be around $93 B/year from 2012-19, on top of existing federal environmental taxes and various state carbon taxes. High overall taxes + high energy prices = low growth for the US. Which will mean lower export market for the Philippines and the US' other trade partners.

China should not follow the same economic-busting policies stemming from "CO2-induced warming" hysteria. China should take up the slack from economic slowdown in the US, it should continue growing fast, and it should continue to be the major buyer for many exporting countries like the Philippines.

The warming hysterics seem to be winning in politics even if they are losing in science. They want to conquer the world through ecological central planning, after economic central planning was proven to be a failure. But both are same dog with a different collar.

Saturday, June 27, 2009

US' cap and trade bill and economic competitiveness

About 2 hours after I posted the message below re. "close fight" between the Yes and No on the US energy and environment bill (aka cap and trade bill), the Yes won, 219-212.

Marc Morano of climatedepot.com made a good editorial,
"Climate Bill's Passage Represents 'nothing more than unrestrained exercise of raw political power, arm-twisting and intimidation'"


Portions of Marc's editorial goes like this:

"Current polling data reveals that the American people “get it” when it comes to man-made global warming fears. Given the wealth of recent polling data showing Americans are growing increasingly skeptical, Congressmen and Senators are simply not hearing any clamor from voters to "act" to "solve" global warming.

In fact, the opposite is true, voters are rebelling against the unfounded climate fears and the so-called "solutions" in growing numbers. Below is a small sampling of recent polling data on global warming.

1) Gallup survey found global warming ranked dead last in the U.S. among ENVIRONMENTAL issues – March 2009

2) Gallup Poll Editor: Gore has 'Failed' -- 'The public is just not that concerned' about global warming – May 2009

3) Zobgy Poll: Only 30% of Americans support cap-and-trade -- 57% oppose – April 2009

4) "Gallup Poll: Record-High 41% of Americans Now Say Global Warming is Exaggerated" - March 11, 2009

5) Rasmussen Poll found Only 34% Now Blame Humans for Global Warming - 'Lowest finding yet' -- 'reversal from a year ago!'

Now that the bill has cleared the house and heads to the Senate (where they will be preparing their own version of a cap-and-trade bill) the American people will awake to the reality that this purely climate symbolic bill with real economic and lifestyle impacts may actually become law."

If the same bill will pass the US Senate, then the Obama administration will head to the UN talks in Copenhagen this December with a "proud achievement" of having a law that will institutionalize ecological central planning in the US.

For countries or bloc of countries that consider the US as a "rival" economic power, they should welcome that possibility. Because the US will soon have expensive power and electricity rates, will have higher taxes and commodity prices (almost all goods and services will be produced through more expensive power rates), and drag the economy to slow growth. All for a promise goal of "saving the planet" when the planet is not in any danger from anything except the warming hysteria that was hyped by the UN IPCC, UN FCCC, US' EPA and NASA, Al Gore, and other institutions and individuals.

For countries that do not consider the US an economic "rival", they should welcome this development too. More American investors and entrepreneurs will soon consider leaving that country and make business elsewhere, especially to countries with low taxes and more relaxed environmental regulations, and still maintain the rule of law and private property rights protection.

Pres. Obama, House Speaker Pelosi and the Democratic Party as a whole under their leadership, will have a great place in future US economic history as having dragged the world's biggest economy to a self-imposed economic slow down.

Wednesday, June 24, 2009

Climate Change Reconsidered, Cooling News in Asia

A new 2009 report of the Nongovernmental International Panel on Climate Change (NIPCC), "Climate Change Reconsidered", is the report on global warming the United Nations’ climate panel should have written—but didnt.

The 880-page report was released last June 2 at the 3rd International Conference on Climate Change (ICCC) in Washington DC. It rigorously critiques the 2007 Fourth Assessment Report of the UN’s Intergovernmental Panel on Climate Change (IPCC), which concluded that harmful global warming “very likely” has been due to human activity in the release of greenhouse gases. The science behind that conclusion is soundly refuted in that report, coauthored by Dr. S. Fred Singer and Dr. Craig Idso.

Dull text of the report and related materials can be found at http://www.nipccreport.org.

Cooling news, Asia and Australia

Below are some news reports that I gathered reporting cooling in other Asian countries and in Australia. This list is not complete, of course.

(1) Cold spell blamed for three deaths in sunny Thailand

Submitted by Mohit Joshi on Tue, 01/13/2009


Bangkok - A cold front sweeping in from China that has dropped temperatures to as low as 7 degrees celsius in parts of sunny Thailand has been blamed for three deaths, although alcohol may have contributed, media reports said Tuesday.

The high pressure system that moved into Thailand over the weekend was blamed for the death of a 71-year-old Buddhist monk in Ayutthaya province on Sunday and two men in northern Thailand on Monday, the Bangkok Post reported….

(2) Will it snow in Thailand?
January 14, 2009


The wintry weather that has gripped the country over the past few days has chilled Bangkok residents with the coldest air in a decade, said a top official at the Meteorological Department.

The department's Weather Forecast Bureau director Somchai Baimoung told Daily Xpress yesterday that the 15.1 degrees Celsius in Bangkok's Don Muang district on Monday was the lowest the mercury had fallen since 1999….

(3) Low pressure, cold front promise rough weather in Vietnam
April 03, 2009


The weather office warned of gusts, high seas, and rains in the next few days after a low pressure strengthened into a tropical trough off Vietnam’s central coast, and a cold front formed over the northern regions.

The Southern Hydrometeorology Station announced Thursday a low pressure to the south of Hoang Sa archipelago, 170 nautical miles from the central Danang city, had strengthened into a tropical trough with its eye 420km east of Danang and Phu Yen province, and winds blowing at 39-49km per hour…

(4) Northern Vietnam set for chilly weather


A cold front is hovering over northern Vietnam and is expected to be followed by another, triggering a cold spell in the region.

The National Center for Hydro-Meteorological Forecasts further reported Friday that light, scattered showers would occur in the northern and central regions while there would be heavy winds and rough seas off the central coast and in the Tonkin Gulf.

(5) It is a chill season for summer appliances in Kashmir

Rashid Paul
The Daily Rising Kashmir, June 17, 2009


Srinagar June 17: The consumer durables industry in Kashmir is clouded by a spell of coolness this summer as cold weather has put off consumers from making purchases in summer appliances.

The market for the summer appliances like refrigerators, air conditioners, fans and coolers has dipped approximately by 90 percent, said Shafat Ahmed, a prominent dealer in refrigerators. Shafat, who owns a chain of retail outlets in the city, says the cool weather is inflicting serious damage to his business….

(6) AFGHANISTAN: Uphill struggle for potato farmers in Bamyan Province
IRIN, June 17, 2009


BAMYAN, 17 June 2009 (IRIN) - Farmers in Afghanistan’s top potato-producing province are complaining about declining profits, mainly because of cold weather, lack of storage facilities and bad roads.

Potato cultivation in Bamyan Province, central Afghanistan, employs thousands of people and output can top 150,000 tons a year, according to the Ministry of Agriculture, Irrigation and Livestock….

(7) New Australian continent wide low temperature record set for April
Minus 13 degrees – the coldest it’s been in April

From Weatherzone – Brett Dutschke,
Wednesday April 29, 2009 – 14:58 EST


A new Australian record was set early this morning, a temperature of minus 13 degrees, at Charlotte Pass on the Snowy Mountains.

This is the lowest temperature recorded anywhere in Australia in April and is 13 below the average. Nearby at Perisher it dipped to minus 11 degrees and at the top of Thredbo it dipped to minus 10.

Across the border, on the Victorian Alps April records were broken at Mt Hotham where it chilled to minus eight degrees and Mt Buller and Falls Creek where it got as low as minus seven….

Sunday, June 21, 2009

DOH Meeting on Price Regulation, part 2

The 5th Advisory Council meeting on price regulation was held last Friday, June 19, at the DOH. There were 3 topics discussed. First, an update on drugs that were recommended for MRP issuance by the President. Second, the proposed administrative order by the DOH on how to implement the MRP once the draft Executive Order (EO) is signed by the President. And third, the electronic data base on comparable drug prices, under the DOH website.

The DOH Secretary submitted the draft EO to the President only last Tuesday, June 16. The first official announcement of list of drugs under MRP was last June 8, during the Congressional Oversight Committee hearing at the Senate, where Sen. Mar Roxas, an LP Presidential candidate, most likely pressured the DOH to produce a list of drugs for MRP. The timing was suspect because it was one year since the enactment of RA 9502, June 6, 2008, and there was no clear national health emergencies.

Were there new list of drugs for MRP? Maybe, no one knows yet except the DOH and the Office of the President. Between the announcement at the Congressional Oversight Committee meeting last June 8 to June 16, there could have been new drugs or those in the mentioned list may have been removed. The DOH said from 100 molecules, they later pared the list down to 25 molecules. The final list is with the President, and she will also make her own consultations before signing the draft EO.

Many of us who attended the meeting last Friday were also surprised that the MRP was pushed through considering that the majority sentiment during the 4th Council meeting last June 5, was that MRP is not necessary now, it should have not been pushed. PCPI reiterated their position that they are not in favor of issuing MRP now. I also spoke and argued that price-setting is not a function of the government. Since we advocate minimal government, there is no way that we can support State intervention in setting prices, much less in price control.

After another long and extended discussion on the inappropriateness of medicine MRP, the topic shifted to BFAD’s Administrative Order (AO) on how the draft EO will be implemented. About 3 pages long, saying that drug manufacturers, distributors, retailers, etc. should put the label "price not to exceed the MRP of ____".

This proposal was shot down, not only by the pharma companies (multinationals and domestic) but also by leaders of drug stores. The main argument is that if there are signs that the prices of drugs that have been identified for MRP are coming down to 50 percent or lower, then no labeling will be necessary. Voluntary compliance should be encouraged. Since there are around 5,000 to 7,000 drugstores nationwide, the labelling will have to be done there – drugstore by drugstore, pack by pack, capsule by capsule, etc. This will present a new logistical nightmare. There was a proposal to have a "transition period" of 3 months between the issuance of the EO and the actual implementation of price labelling. Some civil society groups objected, but they were later convinced of the complexity of hurrying the labeling.

I also suggested that since the government has intervened a lot already in drug pricing, government should show some sacrifice. For instance, should price labeling be necessary for some drugs, it should be the government that should do it, not the drug suppliers who already suffered huge revenue cuts, if not suffer losses, with the mandatory and forcible price control. Many participants from the government agencies howled in disapproval to my proposal.

The 3rd and last agenda was the electronic data base for comparable drug prices. Although there are some noble goals for coming up with this list, aside from being mandated or suggested by the new law and its implementing rules and regulations (IRR), the list is projected to raise more high expectations from the public which will only result in high disappointment. For instance, some drugstores will cite prices for the e-database that are lower than their actual retail price and produce various reasons why they did so.

One vocal participant in the meeting commented on the side that we need minimal government on issues like drug pricing. Thumbs up to him, actually a former friend way back from our undergraduate days at the University of the Philippines (UP) in Diliman campus.

Earlier, there was a discussion how to expand the number of participants in the Advisory Council meetings since certain important players were left out. For instance, people have assumed that all multinational pharma companies are members of PHAP and so, PHAP officials can articulate their sentiments. Turns out that there are 3 multinational pharma companies that are not members of PHAP – Pfizer, Servier, and Merck. So these companies are expected to be invited in the next Council meeting next month, before the State Of the Nation Address (SONA) of the President.

The quality of discussions and debates in the Council meetings is high and very transparent. People who have “great” ideas on something can expect that it can be shot down if such grand ideas are not backed up by robust philosophies and solid data. Unlike in Congressional hearings where the presence of legislators is very imposing and dominating, the discussions in the Advisory Council meetings are more free wheeling, fast and frank.

Meanwhile, what can those multinational pharma companies do to question the inclusion of their popular and saleable products in the MRP list? I think they should write to the President, arrange an industry delegation (PHAP, PCPI, other pharma companies that belong to neither) for a meeting with her. There is a unanimous voice from the industry that MRP will be counter-productive at this time, especially with no clear and apparent national health emergency.

Of course there is a possibility, even a small one, that when the pharma industry leaders would come to malacanang for a dialogue with the President, political and financial extortion is a possibility. The 2010 election is less than 11 months from now, all politicians and political parties are stockpiling money and cash.

But then again, this is just a conspiracy theory.

DOH Meeting on Price Regulation, part 1

The Department of Health (DOH), as mandated by the Cheaper medicines law (RA 9502) is to form an Advisory Council on price regulation. The Council was formed early this year and so far they have conducted 5 meetings. I have attended the last 2 meetings -- last June 5 and June 19. I have not attended the first 3 council meetings, two of which were scheduled on days that I was out of the country.

The Advisory Council has a good mixture of participants. I categorize them into 5 groups here:

(1) the two federation of pharma companies, PHAP and PCPI (Pharmaceutical and Healthcare Association of the Philippines, and Philippine Chamber of Pharmaceutical Industry, respectively). The former is composed mostly of multinational pharma manufacturing and trading companies, while the latter is composed of Filipino companies.

(2) drug retailers, particularly Mercury Drugstore, the Drug Store Association of the Philippines (DSAP), and the Generics Pharmacy.

(3) the civil society groups, including Minimal Government Thinkers, Medical Action Group (MAG), Cancer Warriors Foundation (CWF), Ayos na Gamot sa Abot kayang Presyo (AGAP), others.

(4) the multilateral institutions like the European Council (EC), World Health Organization (WHO), GTZ (German foreign aid), etc. Although I think not all of them attend the meetings everytime, only on issues where they have some involvement or projects. The UPSE Health Policy Development Project (HPDP?), funded by USAID I think, also attends the meeting. And finally,

(5) other government agencies like the Department of Trade and Industry (DTI), Bureau of Food and Drugs (BFAD) and the Philippine International Trading Corporation (PITC).

The 4th meeting last June 5 was held at the WHO Western Pacific Regional Office (WPRO). The main agenda then were (a) WHO's national essential medicines facility (NEMF), (b) list of medicines for possible issuance of maximum retail price (MRP), and (3) a draft proposal by DOH to regulate discount cards by pharma companies.

The goal of NEMF is to "harmonize and ensure uniform standards of procurement across the public sector, ensure selection of reliable suppliers of quality products,..." The essential medicines targeted are for (a) TB, HIV and malaria, (b) vaccines, (c) emergency obstetric care, (d) chronic diseases, (e) neglected diseases, and (f) PhP program and "botika ng barangay" (village pharmacy).

The discussion on list of medicines for issuance of maximum retail price (MRP) or price control was long. DOH UnderSecretary Alex Padilla, USec for health regulations, narrated how difficult it is to face sometimes legislators who want price control, just to show to the public that the government is indeed "serious" in enforcing the cheaper medicines law. DOH understands that it's not easy to issue price control and fully implement it, but they are sometimes castigated in media by the legislators as "in cahoots with multinational pharma".

One will understand if PHAP will oppose drug price control because it is the patented and branded drugs by multinational pharma companies that are most likely to be targetted. One may even assume that PCPI will not object to price control because the products of their members are non-patented and generics. But PCPI leaders were very vocal in opposing drug price control. This is because price control is essentially penalizing success. Any drug that has become popular and highly saleable, whether patented or not, can be a target for price control. Many PCPI members are now good manufacturers, they are capable of producing popular medicines. That ugly state intervention in pricing called MRP will soon hit them.

I spoke, of course, on this subject at the meeting. I noted that price control is a favorite advocacy of socialists under economic central planning regime. It is driven by plain envy with "suffering of the masses" as smoke screen.

Suffice it to say that with the exception of 1 or 2 voices in the meeting, almost everyone, including drug retailers, agreed that imposing price control at this time is ill-advised.

The subject of DOH regulation of discount cards by some multinational pharma companies was tackled next. It was the first time I heard that it is an issue. The DOH wanted to produce a draft Administrative Order proposing that whatever is the current discount price by those pharma companies (usually 50 percent off their regular price) should become the “universal price” and must apply to all customers and patients, with or without any discount card.

There were two major arguments I could remember, that were raised in favor of this move First, discount cards favor the rich, they are the ones who can afford to see a doctor regularly and doctors give out discount cards. And since discounts represent some revenue losses to the manufacturers, such loss has to be recouped from the regular customers, the non-card holders, who are the poor. Second, discount cards allow the pharma companies to have access to some health record of the patients, and there is ethical violation there.

I spoke twice on this subject. First, discount cards I think are marketing tools by suppliers and manufacturers; it is a unilateral, voluntary act on their part, hoping to increase their revenues and profit either in the short- or long-term. Such voluntary acts therefore, should be encouraged, not penalized. When discount cards are to be banned and whatever discount price was to be made mandatory, a cousin of price control in effect, I think this is penalizing those who initiated the discount. Such mandatory pricing would be more palatable if government will also offer mandatory reduction in business regulations and taxes for the affected suppliers. Since this is not forthcoming, then the move is pure penalty, not reward for a good job done.

Second, giving out information about the patient’s health record is no different from filling up an application form to apply for a credit card or open a bank account, where the applicant is giving away his/her personal information like monthly salary, if the house is owned or rented, how many cars owned, etc.

The reply to my points were as follows. On the first, it is not easy to expect the government to cut business regulations, much less cut taxes, for suppliers who are offering unilateral discount promotions. On the second, information via credit card application is way below personal health information, they are not comparable. Health is on the top, above almost everything else. Hence, personal health information should not be accessed by just anyone, much less pharmaceutical manufacturers.

Anyway, we were asked to submit our formal position papers on this subject as the Office of the President is also waiting for the proposals of the DOH as collated from its various consultations.

It was a productive and very informative meeting, and I thanked the DOH officials and staff who were there for conducting such meeting and inviting a diverse group of participants.

Tuesday, June 16, 2009

IMF dinosaur, let it fade away

There is a discussion in the Center for Global Development (CGD) blog where the think tank's president, Nancy Birdsall, testified before the US House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade last week. Ms. Birdsall argued that support for the G-20 commitments to increase lending resources at the IMF is a critical part of ensuring U.S. recovery from the economic crisis and global prosperity and security.

see the blog entry here:

June 15th, 2009
Birdsall Tells Worried House Subcommittee Why U.S. Support to IMF Makes Sense
By Sarah Jane Staats


While Ms. Birdsall made good arguments saying that economic instability in the rest of the world, especially the large emerging economies, will also have negative effects on the US economy and national security, her argument is still too statist: the US government should increase its contribution for the IMF's new arrangements to borrow (NAB) by an additional $100 billion.

I think it would have been better if the US government would borrow less to finance its ever-bloated expenditures and ever-rising public debt, and learn to cut spending. This move for fiscal responsibility should send a signal to other governments, especially in poorer countries, that they too, should take on more fiscal responsibility, not to expand expenditures if local revenues (taxes, fees, privatization proceeds, etc.) are not enough, so they don't fall in ever-bigger debts that can contribute to their external account imbalances, which force them to borrow from the IMF and other multilateral institutions.

The IMF is a dinosaur that has achieved its initial goal of helping stabilize global finance especially after WW2. It is time for it to slowly fade away, not expand even bigger.

Free Trade 13: Benefits of Dumping

I read 2 news stories today on trade protectionism. The first is about pork protectionism as a result of A(H1N1) global scare, and the second is the proposed anti-dumping measures to be imposed by India on cheap Chinese exports. While the former may be understandable as it is a new phenomenon, the latter is simply typical protectionism.

The issue of “dumping” of cheap imports. Even if "dumping" is deliberate and partly subsidized by the government of the exporting country (X), it is still beneficial to the consumers of the importing country (M). The citizens of the X are being taxed to subsidize the consumers of M. Wouldn't the people of M be happy?

Households from M will save, say 20 percent cheaper, from buying products of X. Consumers from M will not burn or throw away the money they save, They will use such savings to purchase additional goods and services which before they would buy only in small quantities or none at all. Or they will use such savings for some investments, say to start a micro or small enterprise. This increase in consumption and/or investments by citizens of M would mean greater welfare and/or greater productive capacity, that can later translate to a more competitive economy.

So M need not complain to the WTO, or impose anti-dumping duty or tax which will make the cheap imported goods become expensive, which will erase potential savings by their citizens, which will erase potential increase in domestic consumption and/or investments, which will result in overall decline in social and economic welfare.

This further proves the beauty of unilateral trade liberalization. Allow all countries to "dump' their excess output and government-subsidized exports to your market, so long as there are no health or security hazards to your people (ie, no expired or poisonous food, etc.). There are two clear and direct benefits for this.

First, local consumers of M will have lots of choices (goods and services) to buy, lots of savings, or lots of new investments to put their extra savings.

Second, tourism-related sectors of M will expand. Millions of tourists and visitors from many countries around the world will flock to the country, knowing that there are so many commodities to buy at cheap and affordable prices because of “dumping” and zero import tariff policy. These tourists buy, shop, eat, stay in hotels, visit tourism spots, etc. Then they go back to their country carrying plenty of huge shopping bags. It's like M imported in huge containers transported by long trucks, and it exported in plenty of shopping bags carried by tourists back to their country.

These benefits are not hypothetical. There is at least one clear and concrete example: Hong Kong.

Nothing beats free trade, free market, free choice.

Below are the 2 news stories that I mentioned:

(1) http://www.bworldonline.com/BW061609/content.php?id=005
BusinessWorld, June 16, 2009

WTO protectionist report to feature swine flu bans

GENEVA — Bans on pork imports after the swine flu outbreak will be highlighted in the World Trade Organization’s (WTO) report on protectionism due in the coming weeks, trade sources last week said.

But overall the report will not show any dramatic upsurge in protectionism as the economic crisis grinds on, rather a "steady drip" of trade measures, one source said.

The WTO will be putting the finishing touches to its regular trade measures report ahead of the June 23-24 ministerial meeting of the Organization for Economic Cooperation and Development (OECD) in Paris, the sources said...

(2) http://www.freedomtotrade.org/news/indian-industry-vs-indian-consumers

India urged to act on cheap Chinese imports

By Amy Kazmin in New Delhi

Published: June 15 2009 03:00

India's small- and medium-sized enterprises have warned that they are suffering because of cheap imports from China.

They have urged New Delhi to accelerate anti-dumping investigations and impose tougher safety and quality checks on Chinese products.
The appeal for greater government protection comes at a time of rising tensions between New Delhi and Beijing about trade after a high-profile dispute over an Indian ban on Chinese-made toys.

India's Federation of Chambers of Commerce and Industry said yesterday that a survey of 110 small- and medium-sized manufacturers found that about two-thirds had suffered a serious erosion of their Indian market share over the past year because of cheaper Chinese products.

In its statement, FICCI said the Chinese imports were between 10 per cent and 70 per cent cheaper than comparable Indian products, a price differential that it said was "huge and difficult to explain". Amit Mitra, the FICCI's secretary-general, said Indian industries were being hurt by "typical Chinese predatory pricing" intended to drive rivals out of business so that Chinese companies could capture the market - and then raise prices to more normal levels.

Last May 26, 2009, I wrote this:

US Realization of the Dangers of Protectionism

I read the article below in FT today. Many American companies feel the pressure and backlash of counter-protectioni st measures by Canadian companies and government.

Meanwhile, I also read that China and Brazil have come to an agreement that they will use their respective currencies, renminbi and rial -- not US$ -- to pay for imports from each other.

Two ugly developments in the US -- ever-rising budget deficit and public debt, and trade protectionism -- help sour the appetite and demand for US$ in some countries. This will contribute to the sinking of the US$, which is actually slowly happening now. For instance, even the not-so-prestigious Philippine peso has been appreciating against the US$ lately.

I hope the US government will realize the folly of protectionism quickly, and abandon those "buy American" provisions and related policies.


Obama urged to curb Buy American measures

By Sarah O’Connor in Washington

Published: May 25 2009 20:06

The Obama administration faces mounting pressure to wind back Buy American measures passed by Congress this year amid growing concerns that they hurt some US workers they were designed to help.

The measures, which were in the $787bn US stimulus bill, require any project funded with stimulus money to use only US-made steel, iron and manufactured goods.

An outcry from the US’s trading partners saw the bill amended at the last minute as the White House urged that it not contravene existing trade agreements. Some businesses and officials say that amendment is proving virtually meaningless in practice.

More than a third of the stimulus money is being disbursed by states and local authorities, which are not party to free trade accords such as the North American Free Trade Agreement.

Canadian manufacturers complain that their goods are being shut out of contracts funded by the US stimulus even though Canada is party to NAFTA, which prohibits discrimination.

In retaliation, some Canadian municipalities have passed “Do Not Buy American” resolutions to shut out US-made goods. That has rattled some exporters. Texas manufacturer JCM Industries told the Financial Times that it might have to lay off workers if the situation worsened.

Pennsylvania- based steel company Duferco Farrell has warned it might lay off 600 workers after its biggest client said it would cancel orders because Duferco’s goods, some of which have to be partly produced abroad, were not Buy American compliant.

Canada’s government fears the problems could worsen, according to Tony Clement, the country’s industry minister. He warned that protectionism was seeping into the US’s long-term laws after the House of Representatives added Buy American provisions to two ordinary non-stimulus bills, a move he called “a distressing trend”....

See also:
Free Trade 7: Class War, Eco-protectionism and Climate, April 02, 2008
Free Trade 8: Global RIce Price, May 13, 2008
Free trade 9: Parallel Importation of Medicines, May 22, 2008

Free Trade 10: More on Unilateral Trade Liberalization, July 15, 2008
Free Trade 11: Global Petition, Keynes, March 19, 2009
Free Trade 12: Trade and World Peace, April 28, 2009

Monday, June 15, 2009

Health Transparency 2: CHAT Discussion and Debates

Last January 19-20, 2009, the Medicines Transparency Alliance (MeTA), an international NGO funded by UK’s DFID, WHO, other multilateral agencies, conducted a civil society organizations (CSO) mapping workshop in Manila. Invited were NGO and CSO leaders who have some track record in contributing to health policy discussions in the past, especially in relation to the new cheaper medicines law (RA 9502).

After the 2-days workshop, the CSO leaders who were there agreed to form a coalition among themselves. The goal is similar to MeTA’s – pursue medicines and health transparency among CSOs that have interest in public policy discussions. About 25 NGOs were represented there, including Minimal Government Thinkers. Then there were several meetings to draft the proposed charter of the coalition, as well as the draft action plan. MeTA international secretariat will provide some funding for the Philippine CSO coalition.

A few months later, the Coalition for Health Advocacy and Transparency (CHAT) was formally created, this time including other NGOs that were never part of the original 25 or so NGOs last January 19-20.

CHAT has a google groups where members can post many things – seminars, articles, etc. I think the discussion list has about 40+ members, am not sure.

I am among those who frequently post some of my short papers. Then some left-leaning NGO leaders reacted to my papers. The discussions were very long. Their postings though are in Filipino, not in English. I would have wanted to post some of their long discussions here, but this blog has a number of foreign readers who do not understand Filipino language. And I’m not in the mood to translate those kilometric postings in Filipino into English.

Among the articles I posted in the discussion list was about the new report released by the International Policy Network, “Keeping it real: combating fake drugs in poor countries”, authored by Julian Morris, Philip Stevens and Julian Harris. The paper is posted in the IPN website (www.policynetwork.net) and in our website, http://www.minimalgovernment.net/media/keepingitreal.pdf.

Among the figures cited in that report were the following:

1. WHO estimates that counterfeit drugs constitute up to 25 per cent of the total medicine supply in less developed countries (LDCs).
2. about 75 percent of imported counterfeit drugs come from India, according to one European Commission estimate; and China is also a significant producer of counterfeit drugs.
3. Fake tuberculosis and malaria drugs alone are estimated to kill 700,000 people a year.

One participant in the list questioned the sources of those data. Below are the data sources as contained in the annex references of the IPN report:

On #1 above: Page 26 of the Report: World Health Organization Factsheet No. 275, refers to a US FDA estimate: “The United States Food and Drug Administration estimates that counterfeits make up more than 10% of the global medicines market and are present in both industrialized and developing countries. It is estimated that up to 25% of the medicines consumed in poor countries are counterfeit or substandard.” http://www.who.int/mediacentre/factsheets/2003/fs275/en/ [accessed 6th March 2009]

On #2 above: Pages 9 and 26: One set of figures from the European Commission showed 75 per cent of counterfeit drugs being imported from India, home to around 22,000 small drug producers, many of which are informal (Bate, 2008). -- European Commission Taxation and Custom Union (TAXUD) statistics, 2005.

On #3, the authors explained in page 23, Appendix, their Statistics calculations:

The World Health Organization has previously calculated that approximately 200,000 malaria deaths per annum could be prevented if the medicines available were of acceptable quality.

This figure was calculated using statistics from the Africa Malaria Report 2003, and a paper on the quality of antimalarial drugs in Africa. The calculations assumed that there were £1 million annual deaths from malaria, with only half of these victims being diagnosed and receiving any treatment at all. Of these half a million receiving treatment, a fifth were estimated to have been resistant to chloroquine and sulfadoxine-pyrimethamine, leaving 400,000 lives capable of being saved through treatment (given existing levels of coverage). The study asserted that, according to the research in The Quality of Antimalarials – A Study in Selected African Countries, up to half of antimalarial drugs in some areas were substandard, and therefore up to half the 400,000 preventable deaths were due to substandard products.

We believe this figure can now be considered conservative. First, resistance to chloroquine and sulfadoxine-pyrimethamine could be removed from the equation, due to the wider dissemination of artemisinin-based drugs. This alone would increase the figure to 250,000 deaths. Second, as explained on page X of this report, drug resistance is significantly exacerbated by fake drugs, with increasing levels of drug resistant malaria along the Thai-Cambodian border attributable to the widespread substandard drugs in that region. Many deaths from drug resistant strands of disease can therefore indirectly be attributed to fake drugs.

According to WHO data, there were 9.3 million new cases of tuberculosis in 2007. Global coverage of DOTS (Directly observed treatment, short course) is said to be 94 per cent, with half of untreated sufferers expected to die. Data on levels of fake tuberculosis drugs is scarce, yet one reliable study (Laserson, 2001) of six countries showed levels of fakes at 10 per cent. By these figures we assume that around 900,000 tuberculosis sufferers are at risk from fake drugs, half of whom (450,000) will die due to the ineffective treatment.
Our total figures for malaria and tuberculosis therefore show 700,000 deaths attributable to fake drugs. It must be noted that due to paucity of reliable data, these are rough, yet conservative, estimates.

Still, that person thinks the above estimation are just hearsay or “haka-haka” in Filipino. Well, if a person or group of persons' mind is too poisoned with biases, no amount of explanation should be able to convince them. A similar situation could go like this:

Person A: I think Gloria Arroyo and family made xx million pesos in kickbacks on the aborted ZTE-NBN project alone.
Person B: why do you think so? how did you arrive at such figure?
A: because of the following considerations...
B: those are just hearsays, haka-haka, bulung-bulongan. Gloria and family did not steal any money from that project.

Another NGO leader advocating drug price control suggested that only like-minded people should become members of the CHAT discussion list. This means only those who favor more state intervention in health and medicine pricing like price control, issuance of CL, etc., should be there, and those who question those provisions should be kicked out of CHAT.

This NGO leader was not there last January 19-20 2009 when MeTA, with the help of some European Council (EC) staff, convened the CSO mapping workshop-seminar. The organizers who spent time and money for that workshop, wanted diversity, not monotony, of perspectives among CSOs and NGOs on medicines transparency. What this NGO leader wants is both price control and thought control.

The discussion list owner and moderator posted and explained that under the CHAT charter, it says:

". . . While bound by a common advocacy, CHAT recognizes the independence of its member organizations and respects the individual positions that may be taken regarding specific issues…. CHAT respects the independence & integrity of each member-organization.”

The same NGO leader noted that during the DOH advisory council meeting on price regulation last June 5, DSAP had one voice, PHAP and PCPI had one voice each, while civil society groups have different voices. It is a valid observation. But if we realize that civil society groups should include not only the left-leaning or militant groups, they also include non-political groups like homeowners association, rotary clubs, badminton clubs, cycling clubs, poetry association, etc. Any voluntary organizations, political or non-political, so long as they are not part of any government machinery (local, national or multilateral), can be considered as civil society organization. Such diversity of perspectives is an important characteristics of the concept of civil society.

There was also another posting with innuendos that I do not wish to be harshly criticized in the papers that I post in the discussion list. Far from that, I actually wish more left-leaning guys to debate with, openly and frankly. The triumph of left-leaning public policies in the government is partly due to the absence or weak voice of the free marketers, the believers of free enterprise, capitalism and individual liberty, to square off in various public debates with the advocates of more government, more taxes, more forcible collectivism and socialism, implicit or explicit.

It still escapes my comprehension why despite all of us in the list wishing to have cheaper medicines, many still cannot criticize or attack the Philippine government for imposing plenty of taxes and fees as if medicines are just like hamburger or beer or cigarettes that must be slam-dunked with as many taxes and fees as possible.

I posted my article last May 2008 entitled “Parallel importation vs. free trade" with a single and clear message: If we really wish more competition among pharma companies (innovators and generics alike), if we really wish to bring down medicine prices, we should have 500 or 5,000 or more pharma companies slashing each other's throats in fierce competition here,and not just about 140 pharma companies, both domestic and multinationals (combined PHAP and PCPI members minus drug store-members). And all taxes and fees on medicines should be abolished.

What's wrong with abolishing taxes and fees on medicines, responsible for making drug prices in the Philippines about 20 percent more expensive, that supposedly militant NGOs cannot publicly and strongly advocate? Could it be that many supposedly militant NGOs receive tax money, directly or indirectly from governments and multilateral institutions like WHO, WB, UN and USAID?

If so, such NGOs cannot really be considered as non-government organizations but partial government organizations (PGOs) or government-funded organizations (GFOs), partly or fully. Dr. Robert So of the DOH's NDP-PMU explained it to me one time when I asked him if the DOH also proposed that Congress should also cut or abolish taxes on medicines when they were deliberating the cheaper medicines bill before it became a law. Dr. So said, "Yes, we did raise that issue with them, the Congressmen laughed at us. DOH gets its funding from tax money, Congress is always on the look out where to further raise taxes. And for a government agency that lives off on taxes to demand tax cut is ironic." Dr, So suggested that it is a very valid issue and that NGOs are the "right" entities to push that advocacy. Of course the assumption here is that NGOs do not receive funding from government, whether national or multilateral government bodies, to make them more effective should the tax-hungry legislators and BIR bureaucrats get back at them.

The long and sometimes emotional debates in the discussion list is inevitable. When MeTA organized the CSO mapping workshop last Jan. 19-20, they wanted diversity, not monotony, of perspectives among CSOs that they invited. I was invited by Klara Tisocki of the EC, then helping MeTA. Some EC guys and the DOH already noted our divergence from the "dominant" perspective, our critical analysis of some provisions of then Cheaper medicines bill before it became a law. That's why they invited me.

So if MeTA and CHAT respect diversity, to encourage the sprouting of more ideas from more heads, then the CHAT discussion group alone is already a success. Let people and NGO leaders with varying perspectives on advancing medicines transparency -- transparency not only by the pharmaceutical companies, but also by drug stores, by the government, by the NGOs themselves, etc -- voice out their opinions and perspectives.

Tuesday, June 09, 2009

Drug price control and mutilated intestines

I just noticed this news report sent to me by a friend late last year. It's about a survey by an Irish research firm, RMI, comparing the pharma environment in the Asia Pacific. Its report said that out of 14 countries in the region, the Philippines ranked no. 10 in terms of "attractiveness" to more players.

I guess this is consistent with my initial observation that while there are 3 to 4 dozen innovator manufacturers serving the health needs of 9 million Swedish and 4+ million Finns, there are only 2 dozen multinational innovator pharma manufacturers serving 92+ million Filipinos. There are also a few Filipino-owned pharma companies, but all of them I think are generics producers, not a single one can be considered an innovator. Also with the new cheaper medicines law, there are plenty of new generic pharma companies sprouting up, both domestic and foreign.

But I think the survey focuses on the attractiveness of the Philippines and other Asia-Pacific countries in the eyes of the innovator companies, not the generics producers. Because the latter do not worry much about IPR protection. Besides, there are tens of thousands of them in Asia alone, not just dozens or a few hundreds in the case of innovators.

There are dozens of reasons too why people die. For instance, when people eat like a pig, have a body like a pig, then they are likely to develop hypertension- and heart-related diseases. Cheaper medicine is a secondary solution for them, but more of lifestyle change and preventive measures. Or when people drink high volume of alcohol every day, err every night, the chances of contracting various diseases from dilapidated liver to mutilated intestines, lungs and other internal organs are very high. Drug price control can perhaps lengthen their lives by a few months or years. But these people make their own lives cheaper and shorter, perhaps they are rushing to meet their creator more than us ordinary people. Aren't political interventions like drug price control interfering with their desire to live fast, die fast?

Another factor perhaps is that various diseases have evolved and mutated, like before they were just ordinary flu, now there are several types of flu -- cow flu, avian flu, wild cat flu (SARS), swine flu, etc. -- and we can expect new types tomorrow, like horse flu, goat flu, carabao flu, elephant flu, tiger flu, etc. When diseases evolve, medicines that can cure or kill those diseases should also evolve. When the A(H1N1) flu virus showed up, there was no existing medicine or vaccine that can kill the disease, so people use quarantine type of measures to minimize the spread of the disease, but not really kill it.

But with restrictive policies like drug price control, CL and related measures, if I am an innovator company with lots of successful and effective drugs to bring, I would think not twice but thrice, 10 times, before I enter a country that is more than willing to declare a price control to my new medicines. After all, I will be seen and regarded there as a blood-and-profit-hungry multinational pharma company. If I am already a suspected criminal long before I enter, why bother?

here's the news report I was referring to.


RP pharma market still faces risks

Written by Dennis Estopace / Reporter
Wednesday, 24 December 2008 23:28

THE Philippines’ pharmaceutical market remains less attractive in the Asia-Pacific region because of difficulties within the country’s intellectual property (IP) environment, an Internet-based research firm said.

This is one of three key drawbacks that Dublin, Ireland-based online Research and Markets Inc. (RMI) that will afflict the country’s pharmaceutical market in the next five years.

“Despite the considerable forecast annual growth, the Philippines continues to represent one of the less attractive pharmaceutical markets in the Asia-Pacific region,” RMI said in a statement released on Monday.

It added that of the 14 markets it surveyed in its business environment ranking, “the Philippines remains firmly rooted in 10th position.”

RMI said it forecasts the value of the Philippines’ pharmaceutical market to reach $4.09 billion in 2012, up from around $2.6 billion in 2007.

However, the difficult IP environment, modest overall market size and the expected increase in the uptake of generics would hobble the market, according to RMI.

Citing data from a September IMS Health presentation, RMI said that “sales of generic drugs in the Philippines [both branded and unbranded] are almost the same as patented products in some therapeutic categories.”...

Liberal politics and drug price control

The cheaper medicines law (RA 9502) turned 1 yr old last Saturday, June 6. The day before that, June 5, the Department of Health (DOH) conducted an Advisory Council meeting on price regulation, I was one of those invited, I went there. Issuance of maximum retail price (MRP) or price control of certain medicines was among the topics discussed. The DOH later requested if we can submit our written position paper to them, I wrote one. Later I decided to submit the same position paper to Sen. Mar Roxas because ultimately it will be the legislators who will decide how much pressure they will press on the DOH to produce a list of MRPiable drugs.

My beef now is on liberal politics of the Senator because he is the President of the Liberal Party in the Philippines. Liberal politics in its classical tradition, is a radical philosophy because it advocates a Lean state, limited government, free market, private property rights, individual responsibility. Thus, it is the exact opposite of big and interventionist State, high taxes, forced collective/public property ownership embodied in many nationalist and socialist-leaning political parties and ideologies.

Many of the provisions contained in the cheaper medicines law mainly authored by the Senator and LP President are actually anti-liberal and very statist. It is understandable if the main authors of that law are from the left political parties like Bayan Muna. Consider the following:

1. MRP or price control -- this is 180 degrees apart from competitive price setting by the market if the number of suppliers in relation to demand and consumers is unrestricted.

2. Compulsory licensing (CL) -- again this is the exact opposite of private property rights. Your invention is also my invention. I have no invention of my own so you can't get back and free-ride on me. Pretty soon, very few will dare to become an inventor as there are hundreds of envious eyes watching the inventors and innovators.

3. Government use -- a cousin of CL, applicable for medicines whose government-issued patents are to be revoked and dishonored by the same government for its own use.

4. Parallel importation -- another a cousin of lesser magnitude of CL. Disrespect IPR and private property rights of an invention, get the goods and drugs from abroad.

5. Silence on high and multiple taxes on drugs -- this is approving, allowing, consenting, to the multiple taxes on drugs that make medicines about 20 percent more expensive: import tax + import documentary stamp tax + import processing fee + local government tax + value added tax, etc.

Luckily, the law is not that 100 percent intrusive. It has some safeguard measures saying that those provisions (1-4) cannot be issued anytime, anywhere, arbitrarily. Only on situations of national health emergencies that those confiscatory provisions can be invoked.

So now, where is any national health emergency in the Philippines? A(H1N1) flu pandemic? No. But even if the answer is a far-out Yes, then the CL, MRP, parallel importation, government use, should apply only on medicines against the said flu virus. Not on other medicines.

In my letter to the Senator, I have argued that there is a very narrow field of competition among pharma manufacturers and distributors in the country for a number of diseases. If this is a problem, then the solution is to encourage more players from abroad to come here and press on the accelerator pedal of competition. Then patients and the public will have more choices, say minimum of 10 or 15 different drugs from 10 different drug producers per disease, not just 2 or 4 competing medicines per disease.

Interestingly, even the leaders of the Philippine Chamber of Pharmaceutical Industry (PCPI), an association of Filipino pharma manufacturers and distributors, are not in favor of drug price control. One thinking or hypothesis is that only the multinational pharma companies are opposed to drug price control because they're the ones selling branded, patented and expensive drugs. Wrong. The local pharma manufacturers are against price control because now they see an opportunity of launching and selling effective and highly saleable drugs. If they become successful on this, the danger of price control will soon affect them.

The DOH people are not so gung-ho on price control. I think it is really the LP President who is going on this because of his Presidential ambitions.

The the next ballgame will be in the Office of the President, President GMA will sign the price control list or not. If GMA will not sign it, then Sen. Roxas will jump on it and blame the adminstration for "high medicine prices", picture himself as the hero and administration as the villain. If the President will sign it, the Senator can still claim that it was his endless pressure that made the President sign the drug price control order.

With this kind of political maneuvering where party ideologies and principles are entirely lost or abandoned, it will be the Filipino people and voters who will get confused in the coming elections and later, will be adversely affected with continuing political opportunism of their political leaders.

Below is one of the news reports today on drug price control.


Tuesday, June 09, 2009

Lawmaker predicts drop in retail prices of essential drugs

The Department of Health (DOH) on Monday submitted to the Senate oversight panel the ceiling price for essential medicines as determined by the department and the Department of Trade (DTI).

Sen. Mar Roxas, chairman of the oversight committee on quality medicines, lauded the health department for finally setting the maximum retail price (MRP) for 22 essential medicines consisting of drugs to treat hypertension, diabetes, asthma and cancer, as well as antibiotics.

Thursday, June 04, 2009

Competition among drug innovator companies

A fellow member of our local health coalition here in Manila (CHAT) commented on my earlier posting re "fake drugs and SCLD". He thinks that the counterfeit drugs argument is being used by big pharma in the Philippines to stop others from allowing Filipinos to have access to cheaper medicines from abroad. He also asked what are the other big pharma companies in the world that are not in the Philippines yet.

Parallel importation is fine, it's ok, so long as the parallel-imported drugs are indeed real and not fake or substandard. But if parallel importation will open up the gate for the entry of fake drugs simply because they are cheap (and the channel is easier because the foreign manufacturers, wholesalers and local importers are different companies), that's where I do not support parallel importation.

Cancer is a very messy and expensive disease. My sister in law died of colon cancer about 4 years ago. Several months later, her husband, my older brother, died of prostate cancer. My mother who was beside my brother in his dying months in our province was crying and cursing the government because it was pocketing nearly P3,000 out of P25,000 chemo per session on value added tax (VAT) alone. The government was benefitting and earning big from the sick and the dying!

I am sure anyone will get angry if some of the patients that they are helping will have their conditions worsening if they have taken fake or substandard medicines. Being cheap is secondary to being effective. We may get the cheapest but the most ineffective medicine as well because they are not the real ones.

About innovator pharma companies that are not yet here in RP that I know of, at least not members of PHAP (www.phap.org.ph) are the following:

From the US (www.phrma.org)

1. Amgen, Inc.
2. Amylin Pharma, Inc.
3. Astellas Pharma US, Inc.
4. Bristol-Myers Squibb Co.
5. Celgene Corp.
6. Daiichi Sankyo, Inc.
7. EMD Serono
8. Endo Pharma, Inc.
9. Genzyme Corp.
10. Hoffmann-La Roche, Inc.
11. Lundbeck Inc.
12. Millenium Pharma Inc.
13. Otsuka America Inc.
14. Purdue Pharma
15. Sigma-Tau Pharma Inc.

From UK (www.abpi.org.uk)

1. A. Menarini Pharma UK Ltd.
2. Actelion Pharma Ltd
3. Ajinomoto Pharma Europe Ltd.
4. Alexion Pharma UK
5. Alizyme Therapeutics Ltd.
6. Allergan Ltd.
7. Alliance Pharma Ltd.
8. Almirall Ltd.
9. Ardana Bioscience Ltd.
10. Basilea Pharma Ltd.
11. Bausch & Lomb Ltd.
12. Biogen IDEC Ltd.
13. Britannia Pharma Ltd.
14. Cambridge Laboratories Ltd.
15. Cephalon UK Ltd.
16. Chugai Pharma Europe Ltd.
17. CV Therapeutics Ltd.
18. Dainippon Sumitomo Pharma Europe Ltd.
19. Daval International Ltd
20. Eisai Ltd.
21. Elan Corporation plc
22. GE Healthcare Ltd.
23. Genus Pharma Ltd.
24. Gilead Sciences Ltd.
25. Brumenthal Ltd.
26. Ipsen Ltd.
27. IS Pharma Ltd.
28. Leo Pharma
29. Lily & Co.
30. MedImmune Ltd.
31. Merck Serono
32. Merz Pharma UK Ltd
33. Napp Pharma Ltd
34. Norgine Ltd
35. Novex Pharma
36. Nycomed Ltd
37. Orion Pharma
38. Pharmion Ltd
39. Pierre Fabre Ltd
40. Pliva Pharma Ltd
41. Procter & Gamble Pharma UK Ltd
42. ProStrakan Ltd
43. Rosemont Pharma Ltd
44. Servier Laboratories Ltd
45. Siemens Plc
46. Smith and Nephew Ltd
47. Solvay Healthcare Ltd
48. Teikoku Pharma UK Ltd
49. Trinity-Chiesi Pharma
50. UCB Pharma Ltd
51. Vernalis
52. Vifor Pharma-Aspreva

From Australia (www.medicinesaustralia.com.au)

1. CSL Ltd
2. iNova Pharma
3. Ipsen Pty Ltd.
4. Mundipharma Pty Ltd.
5. Novo Nordisk Pharma Pty Ltd
6. Shire Australia Pty Ltd

I dont know if all of these companies are medicine manufacturers or biotech and research companies doing work for pharma companies. Not included there are innovator pharma companies from Germany, France, Canada, Japan, Korea, China, etc.

In short, competition among innovator companies in the Philippines, even among multinationals, is very limited. So if the Philippines can provide a welcome mat for many if not all of those innovator companies from anywhere to come here, and let them slash each other's throat in fierce competition -- provide revolutionary, good quality and safe medicines at competitive prices, aided by lower or abolished medicine taxes -- then us Filipino patients will greatly benefit. And I think that many foreigners needing quality health care will come to the Philippines because they know that there is a wide range of medicines available here from so many innovator companies from around the world.

This will help the local "medical tourism" industry, many private hospitals will also be put up, that will create thousands of jobs for Filipino nurses, physicians, other health professionals. They need not work abroad as foreigner and "kababayan" patients are coming here by the thousands.

That's why I argue always that having more competition, not more government taxation and intervention, will help in having cheaper medicines, more dynamic health care.