On health socialism

In one of my discussion yahoogroups, I mentioned that I will not vote for Mar Roxas for VP in the May 2010 elections. Though he was the leader of a Liberal party that was supposed to advance liberal politics and liberal economic policies, he chose the socialist policy of drug price control, among others. There was no national health emergency at the time they forced drug price control (May to July this year). There was only political emergency as his then Presidential survey ranking was very low at that time. With high media mileage caused by his endless Senate hearings on price control, his ranking inched upwards. Until he realized that Noynoy is a better candidate than him, at least in their party.

Another member of that list countered, "what do you do with the drug cartel? In India Pfizer sell Ponstan at P3.50 and still made profit. Here it sold it at P43.00."

I replied with 2 points.

First, where's that figure P3.50 vs. P43 coming from? How is the conversion into pesos arrived at? Is the P3.50 price from real Pfizer's Ponstan or a counterfeit Ponstan? I asked that question because we have it here too, super-cheap copy-cat drugs, 1/5 or 1/10 the price of the original drug, and your disease expands.

Second, assuming the price difference is even worse, P3.50 India vs. P100 or P200 in Manila, both by the same Pfizer (or GSK or Roche or Sanofi or whatever pharma). If there is NO competing drug on the same generic or molecular property, then one can say there is a cartel or monopoly. But if there are 20 or 50 other competing drugs from various manufacturers, innovator or generics, what's the fuss? Why insist on buying P43 or P100 from one manufacturer when you can buy a competing drug with supposedly the same curative capacity from other manufacturers selling at only P3, P5, P10?

So long as there is competition, then let us allow any manufacturer or seller to over-price itself out of the market, out of the competition.

One good example is amlodipine(? ), a drug against hypertension. I heard that there are about 200 different drugs from different manufacturers against this disease. So the competition is very stiff, with prices ranging from P11 (or lower) to P44 (or higher). But the envious eyes of the politicians, media and activist NGOs are on Norvasc, made by Pfizer. Before the Roxas-Gloria drug price control policy in late July this year, it was sold at P44 for its customers with Sulit card. After the socialist policy of price control, it was coercively brought down to P22. The goal was to "help the poor" patients.

But the poor won't buy Norvasc at P22. It's still expensive for them. Other products of the same molecule are sold at P11 or lower. So did health socialism help the poor? No. It helped the rich and the middle class who used to buy at P44, now they pay only P22.

Again, my favorite analogy.
There is NO govt. restaurant, NO govt carinderia, NO govt turo-turo, NO govt supermarket, etc., and people are eating.
There ARE many govt. hospitals and clinics, there ARE many govt. drugstores and botica, there IS govt. health insurance, there IS govt. drug price control, and health problems are endless.

Health socialism -- or education socialism, housing socialism, socialism in general -- creates more problems than solutions.
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Part 2

Some people would not consider or admit that drug price control and similar schemes are tantamount to health socialism because the goal of such measures is "to help only the poor have access to medicines."

The current Cheaper Medicines Law (RA 9502) allows "parallel importation" scheme for drugs. Thus, anyone can now import a drug that is currently patented and sold higher in the Philippines, from another country which sells the same drug at a lower price. Thus, importing Pfizer India's Ponstan into the country is technically and legally allowed.

But many doctors, pharmacists, hospital administrators and informed patients are not comfortable with this scheme. Even assuming that the parallel-imported drug is 100% of the same molecule (not counterfeit, not substandard) as the one sold expensively here, there is the question of (a) storage, (b) handling and distribution, and (c) accountability.

Take drug A that specifies it should be stored and handled at temp. range of 15-25 C at ALL time. When it's stored and/or transported at 26 C or higher for 1 hour or more, it will have a lower or lesser effectiveness already. And a patient will either not get well, or develop new disease as the current disease that is supposed to be controlled or killed by a particular medicine, has already managed to mutate inside the body of the patient.

Under a parallel import scheme, the (a) foreign manufacturer, (b) foreign wholesaler or aggregator, (c) local importer and distributor, can be 2 or 3 different entities. They are never the same entity. So if something bad happens to the medicine being imported and given to the patient, and something bad happens to the patient, who is to be held accountable? A or b or c, or the local patent holder, or the physician and the hospital, or the drugstore, or the DOH?

Saving money is understandable. But saving lives is non-compromisable.

That is why I am not in favor of parallel importation scheme, not in favor of compulsory licensing, not in favor of drug price control, not in favor of government use, etc. ALL of those provisions are now allowed in the Cheaper medicines law. That is why I consider the said law as part of health socialism. The promises are holy and unquestionable – cheaper and affordable medicines. But the schemes used and allowed are generally confiscatory.

The law also does not say anything or amend medicine taxation. Such taxes comprise between 13 to 20 percent of the retail price of drugs. So government is a hypocrite, true blue hypocrite, for calling for “cheaper medicines” but is responsible for expensive medicines by slapping the product with various taxes, as if medicines are like beer and hamburger that should be taxed as much as possible.

So again, my 2 simple proposals to lower medicine prices, both of which were not included, explicitly or implicitly, in the cheaper medicines law:

1. abolish taxes on medicines
2. increase competition among drug manufacturers and retailers

I wrote a paper on drug price control, “Access to medicines through politics: Preliminary assessment of drug price control policy in the Philippines”, http://www.minimalgovernment.net/media/mg_20091014.pdf

It’s 33 pages, word document, including annexes and tables. I presented it in an international conference in Singapore last Oct 14-15 this year. There is one table there where I showed there are sooo many multinational pharma companies abroad that are not yet here, that have the potential to further push the competition among innovator manufacturers, but somehow they are not here. There should be some government policies here that scare them from coming in. Which reduces competition.