Tuesday, April 20, 2010

CL and drug price control

During the Coalition for Health Advocacy and Transparency (CHAT) forum last month assessing the cheaper medicines law (CML, RA 9502), some friends and fellow NGO leaders argued that price control of off-patent drugs is not effective because there are competitor generics available already which are a lot cheaper even if innovator drugs' prices have been slashed to one-half. Then they added that price control should be imposed on patented drugs, where there are no generic competitors yet, in order to force their prices down.

This logic is questionable. A friend and health NGO leader added with the following arguments.

"The multinational drug companies have always threatened a pull out of their products if they do not get what they want, but they have never really done it. In this case, with compulsory licensing or parallel import or government price control of drug prices, they can always threaten us again. They can again give the same threat but I doubt if they will really implement it because they will not take the risk of losing the huge amount of profit that they are amassing in the Philippines.

... the government should stand firm in its position of lowering drug prices. If the drug companies pull out, then we can do parallel importation. It is about time that we show these drug companies that we are not afraid of their threatened pull out. We should not be made hostage to their ploy.

Thus, patent protection for drugs should really be shortened so we are not dependent on these foreign companies for so long. We should develop our own drug industry as soon as possible and encourage healthy competition among local drug manufacturers."

Yes, we all want cheaper medicines. My father is 82 yrs old and is practically dependent on medicines. My mother is 75 yrs old and is totally dependent on her weekly injection for her kidneys, for life! My wife has hypertension and is dependent on maintenance drugs. My elder brother died of prostate cancer, my sister in law died of colon cancer.

I am lucky that I don't get sick, except on Dec or Jan where I get nasty cough because of the cold weather and holiday parties.

My parents are lucky to get 20% senior citizen discount on their drugs, but at xx thousand pesos per month of medication, it's still pocket-draining.

So competition among innovator companies and among generic manufacturers is really helpful. But government's continued taxation of medicines does not help. At 5% import tax + 12% VAT + regulatory fees (FDA, etc.) + local govt taxes, they all contribute to expensive medicines.

Here are some of my rejoinders.

If any of those multinationals will get out of the country, not just their products but their offices, then only traders and importers will bring in their products, new and old. The term for that is plain importation. The term "parallel importation" applies only if the (pharma) company has an office here, imports their patented drugs from their regional or global HQ at a high price. Then comes another company that will import the same patented drugs from other countries without the permission of the patent holder and sell at a lower price. That's why it is called "parallel" importation. In Filipino, "magkatabi" or "magkasabay na importasyon."

The best way that I can think of developing "our own drug industry" is to allow United Lab, Pascual Lab, other domestic pharma, to flourish and become multinationals themselves, exporting their drugs at least to other Asian countries. Let us not push the idea of the DOH or the Office of the President (OP) putting up a government pharma company like Thailand's GPO as the fiscal cost of such project will be too high. If the DOH cannot operate a big government hospital with full efficiency, what makes us think that the DOH can operate a big pharma company?

I sincerely wish to see local pharma companies become multinationals themselves. SMC, Jollibbee, Figaro, Metrobank, SM, etc. are now big multinationals abroad. The cost of pharmaceutical R&D is so big, that only big companies will have the resources to do such job with full accountability. Meaning, if a local pharma company will sell its new line of innovator drug and some adverse results happen to patients and it gets sued, such local pharma company will have the resources to tackle both scientific and legal battles at the same time.

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