Generic Drugs Asia 4: Vaccines from China

I saw two news reports today re China's entry into the vaccine production and exportation industry. One is from AP and posted in yahoo news and other papers, the other is from the National Bureau of Asian Research (NBR).

The report written by Gillian Wong of AP says that China is still readying for this in the next few years, and not yet ready this year or next year or next 2-3 years. And the author also recognizes that there is that big question mark in the minds of the public in other countries about the quality of China-made drugs and food products due to several scandals of contaminated food manufactured in China. And here are parts of the report:

China prepares for big entry into vaccine market

China's vaccine-making prowess captured world attention in 2009 when one of its companies developed the first effective vaccine against swine flu — in just 87 days — as the new virus swept the globe. In the past, new vaccine developments had usually been won by the U.S. and Europe.

Then, this past March the World Health Organization announced that China's drug safety authority meets international standards for vaccine regulation. It opened the doors for Chinese vaccines to be submitted for WHO approval so they can be bought by U.N. agencies and the GAVI Alliance.
"China is a vaccine-producing power" with more than 30 companies that have an annual production capacity of nearly 1 billion doses — the largest in the world, the country's State Food and Drug Administration told The Associated Press.

But more needs to be done to build confidence in Chinese vaccines overseas, said Helen Yang of Sinovac, the NASDAQ-listed Chinese biotech firm that rapidly developed the H1N1 swine flu vaccine. "We think the main obstacle is that we have the name of 'made in China' still. That is an issue."

China's food and drug safety record in recent years hardly inspires confidence: in 2007, Chinese cough syrup killed 93 people in Central America; one year later, contaminated blood thinner led to dozens of deaths in the United States while tainted milk powder poisoned hundreds of thousands of Chinese babies and killed six....

At the NBR report last May 25, 2011, the interviewee, Jiankang (“Jack”) Zhang, China Country Program Leader of PATH, said:

Currently, China has 36 vaccine manufacturers that produce 49 types of vaccines against 27 diseases. The country’s annual manufacturing capacity is nearly one billion doses. WHO’s clearance opens the door for these companies to apply for WHO vaccine pre-qualification—a regulatory status that opens the door for United Nations agencies and governments to begin ordering the vaccine— with the aim of becoming eligible for vaccine procurement by the United Nations Children’s Fund (UNICEF).

In order to speed up the process of obtaining WHO pre-qualification, the Chinese government is now offering more support and encouragement to domestic vaccine manufacturers than ever before, particularly to state-owned enterprises such as China National Biotec Group (CNBG) and other leading vaccine companies. This top-down approach has proven to be the most efficient way to move things forward in China.

The announcement will motivate domestic manufacturers to strengthen vaccine development partnerships with international organizations at broader and more strategic levels. More government funding will also pour into companies working toward the goal of WHO pre-qualification. Furthermore, a new interest in vaccine technology will encourage Chinese scientists who are now working overseas to return to the country in order to leverage this opportunity....

See a longer interview here, A Pivotal Moment for China & Vaccine Manufacturing

During the Conference of Generic Drugs in Asia (CGDA) in Taiwan last week, Nov. 19-21, there was no speaker from China -- generic manufacturers or the State FDA or other industry associations from the health sector. I did not ask the organizers, FAPA and the Pharmaceutical Society of Taiwan why, I just assumed that perhaps it has something to do with the old China-Taiwan tension.

China is the homebase of generic drugs production worldwide. As of 2008, 97 percent of total pharma market by volume was already accounted for by generic drugs. See one graph there from Mr. Roy Fan in Generic Drugs Asia 3: FDAs and the Consumers, November 25, 2011. Next to China would be India, Brazil, Mexico, and other "pharmerging markets".

Given the aggressive development of future China-made vaccines because of the various incentives or subsidies to be extended by the China government, plus the high demand for cheaper vaccines worldwide, when supply meets demand in terms of low prices, the role of governments, especially the various Food and Drugs Administration (FDA) or similar bodies, is to protect public health via more stringent approval process for imported drugs and vaccines, against substandard and counterfeit ones.

But this is not a 100 percent viable scenario due to weak or limited resources and capacity of many FDAs in developing countries like the Philippines. So one "clearing house" scheme would be for those generic vaccine exporters from China and other countries to partner with existing and known pharma companies in the local market, both innovator and generics. The FDA can then focus on lesser-known or zero track record new players yet. This would sound "penalizing the smaller players". Somehow true, and this will encourage the new players to prove their worth, or to partner with more established players on some products.

On another note, there is also one good development in China that can help improve global confidence of their pharma products and exports. It is the establishment of anti-counterfeiting and intellectual property rights (IPR) protection agency.

Portions of the report, China plans state office for anti-counterfeiting, IP protection says,

The US government said just a few days ago that it had uncovered 1,800 instances of suspected counterfeit parts and equipment sold to the Department of Defense, for example, with China emerging as the most common country of origin.

The new office will exercise stricter supervision over manufacturers, in part through inspections, and encourage police forces and local government bodies across different regions in China to work together on investigations involving IPR infringement and product counterfeiting.

The State Council statement also calls for greater oversight of local government, tighter regulation of Internet trade and stronger penalties for those found guilty of partaking in this type of criminal activities.

China's Ministry of Public Security said earlier this month that police have solved 28,000 cases involving IPR infringement and counterfeiting over the course of a year-long crackdown on the activities, focusing on fake luxury goods, pirated books, audio and video and counterfeit medicines and foods.

All told the cases represent around 500 billion yuan ($80bn) worth of goods if calculated in terms of the prices of genuine, licensed products, said the Ministry...

See that? A communist government recognizing more and more the value of private property rights, whether physical property or intellectual property. This is because while the China government can arbitrarily disrespect such property rights within its national territory, it cannot do so in the international market.

By moving towards this direction, the China government -- and other developing country governments -- will recognize that IPR protection related to drug innovation, whether newly-developed drugs or generic drugs and vaccines, is important, both for corporate finance and business aspect, as well as protecting public health.

Pilipinas Forum 21: On Ayn Rand and Keynes

This is among the philosophical discourses in pilipinasforum@yahoogroups nearly 8 years ago. Postings in the  PF are raw and written informally, but the content are generally serious. Unlike other PF series here, there are just a few exchanges here, and only more than 5 pages long. Enjoy.
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Ayn Rand and Keynes

January 8-10, 2003

Ayn Rand will generally disagree with a Keynesian approach of uplifting human welfare. A rice farmer and fisherman can pursue their individual interests (surplus of their produce they sell to the market) and they end up providing rice and fish in our dinner tables - - welfare for both producers and consumers. This short article below by Ayn Rand (I got from my other egroups) will elucidate this philosophy...

A seemingly perennial and prolonged (1998-2003 and counting...) budget deficit situation is anti-individualism, anti-market, anti- self-interest. Why? A government which can hardly distinguish which public services promote efficiency and which ones promote complacency, even laziness and monopoly, is being kept afloat by sustained borrowings. Its philosophy is: never mind today's debts, tomorrow's taxpayers will pay them.

Should we discourage, even scare, a large segment of the productive sectors of our society -- them tax-paying professionals, entrepreneurs, other skilled workers -- with high tax rates and complicated tax system in the future, so the inefficiencies of the past will be paid?

- Nonoy Oplas
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INTRODUCING OBJECTIVISM

By Ayn Rand

At a sales conference at Random House, preceding the publication of Atlas Shrugged, one of the book salesmen asked me whether I could present the essence of my philosophy while standing on one foot. I did as follows:

1. Metaphysics: Objective Reality
2. Epistemology: Reason
3. Ethics: Self-interest
4. Politics: Capitalism

If you want this translated into simple language, it would read: 1. "Nature, to be commanded, must be obeyed" or "Wishing won't make it so." 2. "You can't eat your cake and have it, too." 3. "Man is an end in himself." 4. "Give me liberty or give me death."

If you held these concepts with total consistency, as the base of your convictions, you would have a full philosophical system to guide the course of your life. But to hold them with total consistency — to understand, to define, to prove and to apply them — requires volumes of thought. Which is why philosophy cannot be discussed while standing on one foot — nor while standing on two feet on both sides of every fence. This last is the predominant philosophical position today, particularly in the field of politics.

Running and Freedom 1: FNF Freedom Run 2011

I participated in the first "Freedom Run" organized by the Friedrich Naumann Foundation for Liberty (FNF) yesterday at the University of the Philippines (UP) Diliman campus. It was co-sponsored by UP and I think, the Quezon City government. There were also many corporate sponsors. One could run the 3k or 6k and the theme of the event was "I am Free". Free from corruption, and so on. Nice.

With only 5 hours sleep (had an early Christmas reunion with some friends the night before) and haven't run for the past 10 years or so, I ran the 6k, hahaha. I finished it in 43 minutes, awwww! At around 1.5 km. mark I think, I started walking already. But my goal in joining the run was clear: just finish the 6 kms route, in a brief period to shake and remove the rust in my legs.

What's special with this photo?... hmmm... :-) Ok, I'll tell you. I did not bring a camera but I needed a photo as it was my first run after 10 years or more. The one who took this photo was Jules Maaten, the country director of the FNF himself. Super thanks Jules!

There were probably close to 2,000 runners who participated in the 3k and 6k run. Knowing my physical limitations, I positioned myself in the front of the starting line, knowing that many guys will pass me anyway, so I gave myself a few meters of "lead" over the majority, hehe. And true enough, at the sound of the starting gun, dozens upon dozens of younger lungs and legs passed me.

Sometime in the mid to late 90s, I was running around 7 kms. a week, cycling around 100 kms. a week (I was using a road bike, not a mountain bike) and climbing a mountain once a month, on average. So inflicting limited pain on my body was no stranger to me then. That's why I dared running the 6k even with zero running preparation years before this event.

Here are some photos of the participants, taken from the FNF's facebook photos.

I saw several staff of the FNF there aside from Jules, like Paolo Zamora, John Coronel, Dorothy Salvador and hubby. Chito Gascon of the Liberal Party was also there, but he did not run. My batchmate in UPSE, Gladys Cruz-Sta. Rita, also of the LP was there too, but I did not see her around, only in the photos.

I think this is the first time that a political foundation like FNF has sponsored a running event. It's mostly corporations that sponsor the big events here. I think this is a good initiative to propagate a political foundation's advocacies. In the case of the FNF, it's propagating liberalism, a philosophy that I personally adhere to, especially classic liberalism, not just ordinary liberalism that is propagated by many current political parties around the world.

Back of the shirt says, "It's all about Freedom. ARE YOU FREE?"

Other participants included the Freedom of Information (FOI) group, here in white shirts, led by Nepo Malaluan. A guy called "Zorro" in UP also showed up. And a special participant, a dog riding his master's bicycle.

Freedom and liberty. Especially individual liberty, not national or collective liberty that tends to step on individual freedom "in the name of the nation, the commune, the collective." This goal, for me, sums up what liberalism is.

See the close up quote: individual responsibility, rule of law, human rights and tolerance. These are key words and philosophies that I personally advocate. "People who are afraid of responsibility are afraid of freedom itself." That's from Friedrich Hayek, and I totally agree with him on that.

The last time I saw Jules was early last month in Kuala Lumpur, during the FNF's Economic Freedom Network (EFN) Asia Conference, with the theme, "Competition: Engine for Growth." In this photo from left: DBM Sec. Butch Abad (he was the keynote speaker there), Atty. Tony Abad (he was a speaker in one of the panels), Siggi Herzog, the previous FNF Country Director for the Philippines, now the FNF Regional Director for South Asia, and Jules Maaten.

Competition and running. Governments should take a cue from sports and competition. The role of the organizers and hosts -- like a government -- is simply to lay the rules clear and fair and strictly implement them. Then let the competitors and participants join the race, or the fun, without cheating. The winners are awarded with cash or non-cash freebies, while ordinary participants are awarded with a sense of accomplishment, plus freebies like free food, free shirts, etc. Cheaters and rent-seekers will be penalized with disqualification or other forms of punishment. Hence, there is no need for government to pick winners and losers, like choosing who among the private players will be given special privileges including bail out in times of corporate bankruptcies, and who to be allowed to sink.

How are my legs after being tortured with a 6 kms run-walk within 43 minutes? Oh, they were hellish, since yesterday morning until now now! It's like I went through a physical hazing by a violent fraternity :-)

Thanks again to FNF for organizing that event.

Christmas Notes 1: Yuletide in Middle Earth

This is a guest post from a friend, Franklin "Glenn" de Guzman, a certified JRR Tolkien fanatic and his Lord of the Rings (LOTR) series and other novels. Glenn is a friend way back in UP in the 80s. He is an economist in academic and professional training, but deep inside, is a literary and poetic artist. I must admit that in many of his short novels and long poems, my comprehension of his work would be as low as 50 to 60 percent even if I re-read his works 2x or 3x. There is something about the use of very uncommon words and terms but are still found in dictionaries and possibly in wikipedia.

Glenn posted this in his facebook Notes yesterday, he tagged me. This piece is better appreciated by people who have read the LOTR, yes the 3 (thick) books series, which unfortunately disqualifies me as I have not read any of those books, but I saw the 3-parts movie.

Enjoy this folks. It's about Jesus, the evil, and the Middle Earth all rolled in a 3-in-1 masterpiece. I have a feeling though, that this is only the initial paper from Glenn. This guy is capable of producing long artistic works, so there may be a Part 2, even a Part 3, in the coming days or weeks...

Thanks Glenn, for agreeing to post this in my blog.

Cheers.
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A Christmas Retelling

Glenn de Guzman

Ere the beginning of the Fourth Age of the Shire-reckoning, following the departure of the Ring-bearers to the West, in the day that could not be forgotten, an event occurred that was greeted with awe and wonder, even beyond the realms of Arda. It began with the fashioning of a new star by Varda, one of the mightiest of the Valar (angels). The star’s appearance coincided with an event unheard of since the awakening of the elves during the time when Orome, another Valar, first found the elves wandering under the starlight in the eastern part of the Middle Earth.

And this newly-formed star started to seek its course in the heavens until it overshadowed all the stars, as though it was a huge globe of the Arkenstone with a thousand faces, sparkling like silver in the firelight during a black-smudged night. Below of which, the last batch of the elves at Grey Havens, the harbor nestled at the mouth of the Gulf of Lhûn, was about to board the ship that would take them out of the Middle Earth forever.

Suddenly, a Valar appeared to the elves, and the glory of Iluvatar (God) shone around them, and they were terrified.

Aiya! Ilyanna, (Hail! To all,) Ar nai Eruanna nauva aselye! (May the grace of God be with you!)

Cirdan the Shipwright, keeper of the Grey Havens, who was leading the elves upon the quay, recognized the face of the angel. He replied:

Aiya Manwe Elenior Au calima! (Hail Manwe, brightest of angels!) Elen sila lủmenń omentielvo. (A star shines on the hour of our meeting.)

Manwe said to them, “Do not be afraid. I bring you good news of great joy that will be for all the creatures of Middle Earth. Hear now things that have not been heard among elves, men, and dwarfs, and the High Elves speak seldom of these things; yet did Iluvatar, Lord of lords and King of kings whispered these to the Valars before in the deeps of time. Today in the Shire, a Savior will be born. This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger. The Valar -Aulë also summoned the dwarves of Erebor to the Shire. And at this moment, a host of men has issued forth from Minas Tirith led by the High King Eldarion, heir of Isildur and of Aragorn Ellesar, to pay homage to the child.”

The elves became exceedingly glad; for they realized that they would be accepted back in Valinor. They left the Light but now they are not shut out from it. The curse of the elves, at last, that started with the kinslaying during the sacking of the haven of Alqualondë by the followers of Fëanor, would be blotted out and remember no more.

And so it came to pass by that at the upper Vales of Anduin, a woman was riding a donkey being held out by a man, she being with child cried, travailing in birth, and pained to be delivered. Suddenly, there appeared another wonder above; and behold Ancalagon the Black, mightiest of the winged dragons, having seven heads and ten horns, and seven crowns upon his heads. And his tail drew the third part of the stars of heaven, and did cast them to the Void: and the dragon stood before the woman who was ready to be delivered, to devour her child as soon as it was born.

Generic Drugs Asia 3: FDAs and the Consumers

At the Conference of Generic Drugs in Asia (CGDA) 2011 held in Taipei, Taiwan last weekend, Dr. Vinod Shah of the US Food and Drug Administration (FDA) showed how strict the FDA is in approving the sale of generic drugs in the US. See my earlier discussion about it here, Generic Drugs Asia 1: CGDA Notes 1. Essentially, the approval process requires these four tests:

1. Bioequivalence studies
2. Pharmacokinetic studies
(these two clinical studies are to ensure efficacy of the new generic drugs to be marketed soon)
3. Manufacturing controls (getting a certificate of Good Manufacturing Practices or cGMP), and
4. In Vitro dissolution

These are technical terms in pharmacy and pharmacology and I won't attempt to position myself, not even a half- or quarter-expert, on these topics. Suffice it to say that the strict regulations and approval process in the US and other rich countries can assure the public of the high quality of generic drugs that are available in their drugstores and pharmacies.

Given the high quality regulations issued by the US FDA, is public confidence of generic drugs in the US high? This chart from Mr. Tamotsu Fujino, Director for International Affairs of the Japan Generic Medicines Association (JGMA) in his presentation also at the CGDA says the answer is both Yes and No. In terms of volume, Yes, US consumers' patronage of generic drugs is high, 73 percent of total pharma market in 2010. But in terms of value, it's NO, only 16 percent of total value. Meaning 84 percent of total value is still occupied by the innovator drugs from innovator and R&D companies.

I do not have the soft copy of Mr. Fujino's presentation, I just took the photo of his slides in the hard copy of the conference proceedings.

The other selected country figures, 2010, are (numbers in volume and value share, respectively):
1. Canada, 63%, 29%
2. UK, 65%, 27%
3. Japan, 23%, 6%
4. S. Korea, 61%, 42%
5. India, 73%, 71%

There are many factors why Japanese people have little patronage of generic drugs despite the equally strict approval process for generics. Among these, the high presence of many innovator Japanese pharma companies, and the little support for generics by the government health authorities.

The next chart is from Mr. Roy Fan, General Manager of Standard Chemical and Pharmaceutical Co., Ltd., in his presentation also at the CGDA. This shows some slightly different data from a different primary source. I am thankful to him for sharing me his powerpoint paper and giving me permission to use it for this blog article.

The "protected brands" here means the patented drugs, and these constitute 70 percent of total pharma market value in the US in 2010. The distribution among "non-protected brands" and "generics" is a bit confusing but perhaps they can be grouped under the broad generics category.

Those with more than 50 percent total market share for "protected brands" in 2010 aside from the US were Canada, Germany, UK, France and Spain. And those with 20 to 23 percent market share in Asia are India and Korea.

Another chart from Mr. Fan, showing high share by volume of generic drugs in rich countries like the US, Canada, Germany, UK and France, but in terms of value, the percentage share is low in those countries.

I think the main explanation for this wide divergence between percentage share by volume vs. by value is that generics is used for common diseases like flu, headache, ordinary infection, etc. But in terms of treating more complex or emerging diseases, or lifestyle related ones, medical and health professionals tend to prescribe the new and innovator drugs.

There is no question or doubt that the share of generic drugs to total pharma market in many countries and worldwide trend, will increase through time. This is because the pool of off-patent molecules keep rising and the number of generic manufacturers and their respective research and marketing capability also rises. So as more generic drugs enter the various countries and global markets, the consumers and patients will benefit as they will have more options and choices from more players and competing drug manufacturers.

The pressure on FDAs in many countries to ensure that only safe and efficacious generic drugs will be allowed -- as effective and interchangeable as the innovator brands at a lesser price -- will be rising. This is one important function of government to protect public health.

In countries though with relatively weak and over-worked FDAs like that in the Philippines, I think one alternative is to encourage corporate branding (or "unibranding"). Manufacturers and traders can explicitly and confidently declare, "Our brand and name is our guarantee. If you see any substandard or fake drug from any of our products, you can distrust all our other products, even hail us to court." This way, consumers can be confident of the quality of the generic products from established manufacturers. And the FDA can focus its resources and energy on checking products from less known or newly established producers and manufacturers.

Finally, as I pointed out in my presentation at the CGDA, "Drug innovation + generics complement each other in protecting the public." As new diseases emerge or re-emerge with mutant strains, the need for new and innovator drugs will remain as vital as before. Most generic drugs are not capable of coping with new or more complex strain of diseases as the generics were developed to cope with old and existing diseases, not the new and evolving ones.

The role of government in this situation is to encourage, or simply leave them alone and not over-tax or over-regulate them, both generic and innovator companies. The government has the last card in enforcing the rule of law, the law against producing substandard and/or counterfeit drugs that do not cure or kill diseases. The certainty of conviction if caught, and the severity of the penalty is enough deterrence against potential manufacturers of such undesirable drugs that can harm the public, if not kill people.
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See also Generic Drugs Asia 2: My presentation at CGDA 2011, November 23, 2011.

Anti-Smoke Belching Racket, Part 3

After I posted  Anti-Smoke Belching Racket, Part 2 last September 15, 2011, it attracted several comments from more motorists. Today, I chanced upon these two additional stories:

(1) http://www.qatarliving.com/node/1266249

Anti-Smoke Belching Unit in Makati: Just to share

Submitted by Lovable40 on Fri, 20/08/2010 - 5:39am General

Last 17 Aug, I was driving my L300 from Marikina going to Makati via the C-5 road to visit my investment. I am going to turn right via Kalayaan Road after the Pasig Bridge. Pagkaliko ko, there where a variety of kababayans wearing yellow shirts with City of Makati ASBU printed on their shirt with ages varying from mid 20s to retirable age. Yung pinakamatanda ang pumara sa amin. "Smoke Emmision Test" daw sabi ni Tatang. So sabi ko, OK lang since BIO-diesel ang gamit ko from SEAOIL at kapapatune-up ko pa lang. So I alighted down and went to see their "machine" for testing. To my horror, super luma na! Di na mabasa ang LEDs. Yung hose na ginamit e napakarami ng electrical tape na nakabalot. Yung box e yari sa kahoy na makikita mo pa ang pagkakapako. Mukhang yung original box e nasira na ng panahon.

Kinausap ko yung grupo. Ask ko kung ano ang kanilang sinusukat. SMOKE daw sabi nung isa. Ask uli ako, anong klaseng GAS ang inyong sinusukat. Walang sumagot. Inulit ko, Carbon monoxide? Nitrous Oxide? Tumango na lang. Ask uli ako, ano'ng unit ang gamit nyo? parts per million (ppm) or percentage (%). Bigla akong iniwanan. Doon ko napagtanto na di nila alam ang kanilang ginagawa. Napag-alaman ko na ppm pala base sa print-out na lumabas. 4.4 ppm ang resulta ng sa akin at ang allowable DAW ay 2.5. So as per the City of Makati Ordinance e tatanggalin nila ang front plate ko. I said, ANOH!!!". E di pag ginawa nila yan, bago ako makarating sa Makati Ave e napakarami na ng pulis na haharang sa amin at titiketan na naman ako. Masyadong maraming abala! Late na ako dahil, lifted na yung truck-ban at gusto pa e tubusin ko sa may Ayala Ave and pay the 1,000 pesos fine. I was in between 2 difficult choices, should I be as honest to myself, deal with it and be like my elected President Noynoy with a battle cry of KUNG WALANG CORRUPT .... or should I talk may out, corrupt the guy and not be late with my very important appointment? I've chosen the latter and gave Tatang 500 pesos.

Honestly, as much as I don't want to do this maraming lakad ko ang masasayang. Ang mas kiniinisan ko, bakit yung ibang DIESEL driven Jeepneys ng Pateros, Pasig, Taguig, Guadalupe na nagbubuga ng maiitim na usok, na bumabaybay sa kahabaan ng Makati e di pinapara? Hay, what a day! Balak ko ngang isumbong sa XXX e. I still have 3 weeks here and hopefully I won't encounter such thing. Dinala ko na ang van ko for another check-up ... gastos na naman.
Sorry sa haba ng story ... I just want to share kasi baka maka-encounter kayo ng mga katul;ad nito...

Meron pa akong link na nakita while (still) looking for the alllowable emmmision. It was posted way back 2009

(2) http://www.betterphilippines.com/corruption/highway-robbery-along-commonwealth-avenue/

Highway Robbery Along Commonwealth Avenue
Written by bp on May 5, 2009 · 5 Comments

I was on my way to the office today when the bus I was riding was stopped by a group of men along Commonwealth Avenue in Quezon City. They were unarmed but you could immediately tell that they were up to no good.

True enough after that encounter the bus driver and conductor were P200 poorer. Sounds like highway robbery, doesn’t it?

The group we encountered was running an anti-smoke belching operation so they had every authority to flag us down. But instead of carrying out what they were mandated to do they turned their whole operation into a money-making scheme.

I know money changed hands because I saw it as it happened. I was sitting at the front row and as I peered through the window I saw the bus conductor giving P200 to one of the team members.

It was quite a funny sight actually. The man who flagged us down was acting all indignant because the bus driver, who remained glued to his seat, refused to hand over his vehicle registration. So he went on to admonish the bus driver. But as he was delivering his sermon he was also stealthily reaching out for the conductor’s hand, which held two tightly folded P100 bills.

What a funny charade I thought. It was really funny I failed to stop myself from laughing and blurting out, “ayos na, merienda na.” The clown even heard what I said. As he walked away he flashed me a toothless smile not even his own mother would appreciate.

Now, I’m left wondering again if calls for personal change would even work on people like these.
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About three weeks ago, I brought my wife to her office at the Asian Institute of Management (AIM) in Paseo de Roxas, Makati, my 5 years old daughter was with me, then I turned right at Pasay Road. Not far from the intersection, I was flagged down by many "men in black" shirts, again, the Anti-Smoke Belching Unit (ASBU) of Makati city hall. They wanted me to go to the right side, I stayed on the inner lane and asked them what's the problem. They said "smoke emission test", I said "Bossing mali-late na ito sa klase ang bata" (my daughter will be late in her school), somehow children can evoke a soft heart among these bureaucrats, and they let me go. And flagged down other old-looking diesel vehicles behind me.

The Makati ASBU used to be in Buendia, one time along Metropolitan Ave. behind Mapua-Makati campus (ie, at the back of Buendia).

Pasay ASBU would also be in Buendia, Pasay after crossing Taft-LRT. Or they may be at Buendia-Roxas Blvd intersection, under the flyover. It's difficult to reason out to these guys as there are plenty of them. And since their intention is really to make your vehicle "Fail" their emission test and get money from you, via extortion or fine at the city hall, you'll be helpless.

This morning, a lawyer friend posted in his facebook wall, "There is a creeping inflation lurking behind all the big news....didn't you notice?"

I commented the following:

• Nonoy Oplas 
  
  

  Cost of transporting vegetables, pork, fish, other food and drink items, moving people, other goods and services, are rising, not only because of rising fuel prices, but also because of various govt extortions: anti-smoke belching, various traffic "violations" even for the most inane reasons, etc. And those endless borrowings by the govt, endless taxes to finance those borrowings. And govt is supposed to provide "macroeconomic stability".

  
  
• 
  
• 
  

  Nonoy Oplas That's why I seldom drive my old pick up, it's 15 yrs old this month, unless I drive the kids. The ASBU guys from makati, pasay, qc other cities are ALL salivating at the P1,500 fine for 'not passing" their smoke emission test which, unless you pay them, your car will fail 100%. They are among the road terrorists and they are our "public servants".
  
•  A friend who is a driver of a food delivery van for a restaurant chain told me they have a P100 allowance for those ASBUs to avoid delay and bureaucracies. So if they are flagged down 5x a day as they move from one city to another, that's about P500 per day of extortion money, and resto owners have to pass that additional cost to the consumers. And we feel that "creeping inflation" somehow.
  

  
  
• Luie  Boss, are you saying therefore that there are more of these extortions now than before, which is reflected in the "inflation"? Or was the extortions before cheaper than they are now?
  

  
  
• 
  

  Nonoy Oplas 
  
  

  I think there are more these days than before. The number of govt employees, especially in local govts, are expanding like termites, Since may of them produce zero/little productive activity, only regulations and prohibitions, and they need to eat along with their families and friends, they need to create more prohibitions and "violations" so that people will pay more to them. Here in makati for instance, they are plenty of NOs and DONTs. "No jaywalking" or "no loading/unloading here, go to the next block" and lots of fines. And yet they say that people should commute, should walk, to "save energy, to save the planet" and they make it hard and costly for people to cross streets.
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  Another practice by local traffic "enforcers" in many LGUs here in Metro Manila, they prohibit left turn or U-turn in some streets even at night time or holidays or days where there is no traffic congestion. So motorists have to go to far away corners and streets where traffic sometimes is bad. This forces some motorists to take a chance and make that U-turn or left-turn when they think the enforcers are nowhere, only to find out that they are hiding. So a taxi driver for instance who is apprehended for this scam has to pay P500 to P1,000 to city hall if he chooses not to bribe, or pay P100 or more. This reduction in the income of the cab driver he must get from passengers, that is why "kontrata" or higher tip is sounded off to taxi passengers before they go. Which raises the cost of transpo of ordinary commuters, and we feel somehow that "creeping inflation."

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See also
Anti-smoke belching Racket, January 17, 2011

Fiscal Irresponsibility 19: Rich Countries' Debts

The ongoing debt crisis, more specifically governments (not private) debt crisis of many rich countries around the world, especially Europe and the US, simply will not go away. Not in the short-term, and definitely not in the long-term. Here are some graphics I got from The Economist Daily Chart.

From November 18th 2011 issue, "Europe's Deepening Crisis". Here are two charts. Above, Europe's richest economies in terms of GDP per capita. Those with smaller populations tend to rank high (they have a smaller denominator). Lower chart is a depressing picture for some countries, unemployment rate as high as 23 percent in Spain, and 16 to 18 percent for Latvia and Greece.

And here are some government debt data. Those in light brown colors (60 percent or higher) debt/GDP ratio are also Europe's largest economies: Germany, France, UK, Italy, Spain, Belgium, Portugal, Ireland. Countries that really lived beyond their means for decades until now.

Lower chart shows the average debt maturity of many European governments.

These charts are from Daily Charts, November 9th, 2011,  The maths behind the madness. It's an interactive chart, you pull the drop-down to see the country charts. For easier navigation, I compiled the screen shots of those countries and put them in one file, four countries in one rectangle.

Countries which have higher than EU average for gross government debt/GDP ratio here are Italy and Portugal. Spain, reeling also in fiscal crisis, has lower average ratio, but its problem is its very high unemployment rate -- fewer taxpayers and more welfare seekers. Switzerland definitely has a lower ratio than EU average.

The US has recently surpassed the EU average. Japan, definitely, long before many European economies began reeling with heavy public indebtedness. The Japanese government though is heavily indebted to its citizens and corporations, so the bulk of government debt is denominated in Yen, not in $ or Euro or Pounds, etc.

In general, G7 world's industrial economies are heavily indebted -- led by Japan and the US. Whereas emerging economies like China, India, Brazil, Russia, Indonesia (also among the world's largest populations) have lower debt.

Living within one's means. This used to be a simple and common sensical concept. But because governments everywhere have been expanding to giant and monster bureaucracies, they have totally abandoned that concept. It has become "living and borrowing... endlessly".

It is true that government bail outs of some huge private corporations were partly responsible for the bloating of the public debt. And it speaks of business cronyism when governments become too big. But it is also private individuals and enterprises' savings that bail out governments -- through high and multiple taxes, lending to governments.

Governments and their millions of bureaucrats and politicians need to go back to that simple motto. "Live within your means", do not spend more than what you earn unless in cases of emergencies. Then work hard, be frugal, and let go, aka privatize, those assets that are non-essential in order to pay back those debts you incurred in times of emergency.
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See also,
Fiscal irresponsibility 16: On government bail outs, September 11, 2011
Fiscal irresponsibility 17: Cut Spending and Borrowing, September 19, 2011
Fiscal Irresponsibility 18: Greece Bailout, October 29, 2011

Population Control 7: I am Supporting the RH bill

Yes, I am supporting the government-sponsored population control measure aka the Reproductive Health (RH) bill. PROVIDED that government will also cut or discontinue some of its existing but ineffective social programs.

As of July 2011, there were an estimated 37.11 million employed Filipinos. We assume that all of them are taxpayers, directly or indirectly. This year, interest payment alone (principal amortization not included) of the national government will be P357 billion. This means that each employed person in this country would fork out something like P9,622 of taxes for interest payment alone this year. Then they have to fork out more taxes to sustain the millions of bureaucracies from the local to national government agencies, up to the multilateral and foreign aid bodies like the UN, WB and ADB who all live off on tax money.

I read that with or without the RH bill, the DOH has already alloted some P7 billion for reproductive health-related spending. People are liabilities, the government and the RH bill supporters say, so their number should be reduced by giving couples various "options and choices" to plan their household size. Never mind the taxpayers including those who have no kids, they have no choice whether to support or opt out of these new spending.

Meanwhile, a friend in facebook posted something like this after Pacquiao's split decision victory over Marquez two weeks ago:

Manny Pacquiao, you now believe in "MAJORITY DECISION." Perhaps you know now the statement from the Social Weather Stations (SWS) survey this year, "that 73% of Filipinos want to get information on all legal methods of family planning (FP) from the government and that 68% wants the government to fund all means of family planning." That's majority decision.

And I replied to him, :And if you ask also the people, 'Do you want subsidized or free healthcare and housing, subsidized or free train ride and jeepney fare, subsidized or free cell phones and electricity, subsidized or free farm tractor and fishing boats, etc., government will fully fund those subsidies?', I think 90-100% of them will say Yes. Majority decision too."

Below are some data from Dr. Jop Yap of PIDS. This is part of his paper delivered during the Philippine Economic Society (PES) conference a few weeks ago. I thanked Jop for sharing with me his data.

See the low working age / dependents ratio in Singapore, Thailand, China and Korea? This should be directly or indirectly related to their past population control policies. Soon, their oldies will be needing robots and migrant workers to take care of them as the number of their young population is small in relation to the oldies.

Generic Drugs Asia 2: My presentation at CGDA 2011

Posting my presentation here during the CGDA 2011 in Taiwan, including my adlibs during the talk. Many of these slides and images can be found in my previous articles here....
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Being the 3rd to the last speaker in a two days full conference has the advantage because people are rather tired and would want to see and hear the presentations quick. So instead of 30 minutes alloted to us, I will speak for only 15 minutes as much as possible, so you have to read fast as I will speak fast :-)

During the welcome dinner last Friday, some fellow people there including fellow speakers asked me if we are a government think tank. So I added these (3rd and 4th) slides).

(5th slide) Consumer interest is more options, period. Whether the price is lower or higher, the quality is shiny or not, let the consumers choose. In a competitive market, consumers can choose whether they want to buy at equilibrium point A or B or C or ... Z. Under a price controlled market, prices at the upper level are abolished and hence, consumer choices are reduced, limited to only those within or below the price set by the government. And this is wrong.

(Slide 8) The good news is that life expectancy around the world is rising, up to 80s in many rich countries like Japan, UK, etc. The bad news is that about two-third (2/3) of all deaths around the world on average are from non-communicable diseases (NCDs): cardiovascular, cancer, respiratory, diabetes, other NCDs. One lesson here is that oftentimes, there is high focus on curative healthcare and people neglect preventive healthcare.

(Slide 10) The implications for this data of declining AIDS death are: (1) medications and treatment are somehow working, (2) previous estimates and projections of death from AIDS were exaggerated, and (3) people are more careful these days to avoid getting AIDS.

(Slides 11 and 12) The same pattern of high incidence of death from NCDs is also observed in the Philippines. Data from the National Statistics Office (NSO) and the Department of Health (DOH).

(Slide 13) The photos and images here are real, some are just for fun, but they illustrate the causes of many self-inflicted diseases -- heavy drinking, smoking and eating.

We now go to Drug Price Control policy and the generics...

Prices of both innovator and branded generics have been declining even before the policy was imposed due to increasing competition.

(Slide 21) Data is from Watsons Pharmacy and it reflects the move towards the innovator drugs by the ABC class, the main customers of Watsons.

(Slides 22 and 23) These charts are from the Pharmaceutical and Healthcare Association of the Philippines (PHAP) and they illustrate the high costs of R&D, the high failure rate, in drug innovation. And of the 20 years total patent period, actual commercial period is only about 11 1/2 years. Which shows the need for IPR protection.

(Slide 24) Research against cancer is high, and this is good. My brother, his wife, my uncle, two of our wedding godmothers, have all died of cancer. It is a messy and costly disease.

These are news reports about the future promises of drug innovation: vaccine against malaria, patent sharing to kill AIDS... news drugs against viral infection, augmenting our immune system to identify and kill cancer cells.

(Slide 27) This is related to the presentation by Mr. Ramana of Dr. Reddy's this morning. That Indian pharma companies are moving into the advance research and possibly innovator field.

(Slides 28 and 29) The shortage of critical medicines like anti-infection and anti-cancer were reported in the US, also in Canada. New cancer cases are now estimated at 12 million per year.

Here now are my concluding notes...

(Slide 35) Joey Ochave warned me of such press releases, that this and that new drug can treat dengue and other diseases. Nonetheless, if such vaccines are made available to the public, even at initial high prices, still people have the option of getting them or ignoring them and stick to standard preventive measures like having a clean environment.

My references are here. I'm done, thank you.

(I missed my self-imposed target of 15 minutes talk only because our moderator, Joseph Wang, the President-Elect of FAPA, smilingly told me that I spoke for 20 minutes. Nonetheless, I gave the audience and fellow speakers 10 minutes of extra rest for the coffee break :-))

Generic Drugs Asia 1: CGDA Notes 1

I am starting a new discussion series in this blog, "Generic Drugs Asia". Mainly about the Conference of Generic Dtugs in Asia (CGDA), November 19-21, held in Taipei, Taiwan. There were so many information imparted over the past two days, I should write about them little by little.

Below is my article yesterday while I was still in the hotel in Taipei. It is posted today in the online magazine,
http://www.thelobbyist.biz/perspectives/less-gorvernment/1239-generic-drugs-and-the-consumers-part-2
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Taipei – Generic drugs have a wide range of use and acceptance in many Asian countries, from as low as 23 percent of total pharmaceutical market volume in Japan to about 65 percent in the Philippines to as high as 80 percent in India. This reflects the extent of confidence or suspicion of generic drugs in our continent.

This is among the important data and information that were discussed during the 1st Conference of Generic Drugs in Asia (CGDA), November 19-21, held here in the capital city of Taiwan. The event was jointly organized by the Federation of Asian Pharmaceutical Associations (FAPA) and the Pharmaceutical Society of Taiwan. The word “pharmaceutical” here also would refer to pharmacists association, and not the pharmaceutical companies.

There were four of us from the Philippines who came to the conference. Ms. Leonila Ocampo, President of the Philippine Pharmacists Association (PPhA) where the association is a member of FAPA; Ms. Nazarita Tacandong,Deputy Director of the Food and Drug Administration (FDA), Jose Maria “Joey” Ochave, SVP of United laboratories (Unilab), and me We were all speakers on different panels.

The conference has four main themes or panels. (1) generics, scientific and legal standing points, (2) government policies for generics, (3) development and contribution of generics, and (4) generics , the perspectives of healthcare providers and patients/consumers. I spoke on the last panel to discuss the view of consumers, not only of generic drugs but also of innovator drugs and healthcare system in general. See my notes about the conference before coming here, also Part 1 of this discussion, Generic Drugs and the Consumers.

In panel 1, the key presentation was made by Dr. Vinod Shah, a senior research scientist at the US FDA. He worked for that agency for the past 30 years, so he really knew a lot about the various requirements and approval process of generic drugs in the US, which has among the most strict regulations worldwide. Dr. Shah said there are 6 strict criteria of generic drugs approval in the US. They must (a) contain the same active ingredient as the innovator product, the inactive ingredients may vary, (b) be identical in strength, dosage form, and route of administration as the innovator drug, (c) have the same use indications (labeling), (d) be bioequivalent, (e) meet the same batch requirements for identity, strength, purity and quality, and (f) be manufactured under the same strict standards of FDA’s good manufacturing practices (GMP) required for innovator products.

Six strict requirements, wow. We wonder if all or most of them are also done in the Philippines and other Asian countries. For many Asian governments, two criteria are set as the minimum: generic drugs must pass bioequivalence (BE) tests and they must get a certificate of GMP from the FDA. Then they add a 3rd or more criteria.

Panel 2 was the presentation of the FDAs of the governments of Malaysia, Philippines, Japan, Korea and Taiwan. Ms. Tacandong of the Philippines spoke about the Generics Law of 1988 including the registration of generic products, the National Medicines Policy, generic labeling, prescribing and dispensing.

Panel 3 has lots of good speakers from among the biggest generic producers in Asia – from Japan, Korea, Philippines, India and Taiwan. Mr. MV Ramana from Dr. Reddy’s, the world’s 12th biggest generic manufacturers, spoke for India. For the Philippines, Joey Ochave of Unilab, the 17th biggest generic producer in the world, spoke. Joey talked about the Philippine pharma market (80 percent of total generics market, and 23 percent of total value including innovator drugs held by Unilab), an assessment of the Generics Act of 1988, the WTO TRIPS flexibilities on intellectual property rights (IPR) on medicines, the Philippine’s intellectual property code (IPC), the Cheaper Medicines Law (RA 9502) and how drug price control policy was inserted into the law when it was not there in the previous bills. Joey was the usual articulate and clear speaker. Even if I know a number of the topics that he discussed, I still learn many new things and insights as I listen to him.

In panel 4, the main presentation was made by Dr. Leslie Benet of the Department of Bioengineering and Therapeutic Sciences, School of Pharmacy and Medicine, University of California in San Francisco. The guy is a big name in the international pharmacy research, he is also a tall guy with a big voice that he needed no microphone to speak even in an auditorium. His bottom line presentation is this: “No prospective study has ever found that an FDA approved generic product does not show the same clinical efficacy and safety as the innovator product, even when special populations (eg elderly, women, severely sick patients) are studied.”

His conclusion would be consistent with the presentation by Dr. Shah of the US FDA the day before as Dr. Shah showed how stringent, how strict, the FDA is in approving any generic drugs to be sold in any drugstore in the US.

For my part, I spoke on “Generics, Perspective from Consumers”. My six-point conclusions were: (a) consumer interest is more choices and options for each molecule or generic category, (b) reduce or remove taxes on medicines and withraw drug price control policy, (c) government should focus its resources on fighting substandard and fake drugs, (d) expanding generics only retailers (GORs) improve access of patients to generic products, (e) drug innovation + generics complement each other in protecting the public, and (f) on drug switching, physicians and pharmacists should guide patients.

I would say that the conference was highly successful as there were lots of information and observations discussed, lots of networking opportunities, all the speakers came, and there was a good audience. The conference venue was also very nice, there is a microphone every two seats so that participants in the audience who want to ask questions need not stand up and go to the microphone in the aisles.

The organizers also arranged three dinner banquet for us speakers, moderators, organizers and sponsors of the conference. So many nice food and drinks, while exchanging notes and information beyond the plenary and conference hall. I thank again FAPA and the Pharmaceutical Society of Taiwan for organizing that first conference on the subject in Asia. It will become an annual conference around Asia in the future, and healthcare providers, regulators, professionals and consumers/patients will learn a lot from such important event.

Taiwan Infra

My first time to set foot on Taiwan, and the first structure that one will see up close is the international airport. It's big, definitely bigger than the Manila airport, but I don't think it is as big as Singapore's Changi or Hong Kong's Chek Lap Kok, or Seoul Incheon's, or Tokyo Narita airports.

The upper photo I took myself on the way to immigration and the exit. Lower photo I got from the web. This should be the view before the departure lounge, I will see this on my flight back to Manila on Tuesday.

What impressed me was the good road infrastructure they have, like many other developed Asian economies like the countries I mentioned above. Malaysia too has good road infra, I was there last month.

Here they are building a two-level skyway, this is the road from the airport to Taipei. Huge and long structures.

I don't know if this is government-built or private sector-led tollway project, but definitely they are huge. If the former, then the Taiwan government is doing a good job in anticipating more land traffic in the future. If it is a private sector project, then it shows their deep pockets to undertake this kind of project.

Here are portions of the semi-finished skyway. Once finished, it should be like a one-way, race track type of road with zero threat of oncoming vehicles on the other side.

More photos of their skyways under construction between Taipei and the Tao Yuan international airport. There is another airport within Taipei but it's a smaller one, mainly for domestic flights, a few international flights like Tokyo.

I arrived at my hotel yesterday afternoon. Then we were treated to a sumptuous dinner by the conference co-sponsor, the Pharmaceutical Society of Taiwan. It was a 15 to 20 course meal, I think. It bordered between high hospitality and gluttony due to the big number of food served in our table.

Some of the last servings. They came in bigger bowls. The only consolation is that they did not serve rice anymore. There simply was no more space in our tummy with all those food. 

I kidded two guys beside me, both from generic drug manufacturers, that perhaps someday, some of them should produce a drug that hastens or quickens the food digestion system. So that what you eat by 6:30 or 7pm will be digested by around 8:30pm, so your tummy will have more space for food that are still coming by 9pm. If ever this drug is invented, it should be a hit in countries where there is high percentage of fat and obese people. They both laughed.

The "Asia Generics Conference" will officially start today. Last night was just an unofficial dinner-networking among the conference organizers, sponsors and speakers.
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See also Migration and Freedom 12: Visa-free entry in Asia for some photos of Taiwan.