Friday, July 24, 2020

Drug Price Control 49, The FEF statement

The Foundation for Economic Freedom (FEF) issued a well-written position paper the other day, July 22, about drug price control. They wrote,

"...  We would like to caution that the recently signed Executive Order No. 104 may do more harm than good in ensuring access to quality and affordable medicine for all Filipinos. 

We understand that more than half of the out-of-pocket health expenditures of Filipinos are spent on medicines. However, price capping is not the answer to making medicines affordable and accessible to the poor. It may work in the short run, but it could lead to medicine shortages in the long term. 

Business common sense will dictate a pharmaceutical company to pull out its product from the market – if not leave the domestic market completely – rather than sell at a price where it cannot recover its costs. When this happens, patients are made worse off – there are fewer available drugs in the market and consumer choice is reduced. 

Price capping creates a trade barrier in encouraging investments in pharmaceutical research and development. In this time of pandemic when the pharmaceutical industry is on a race to find a vaccine for COVID-19, innovation must be encouraged and not penalized...."

FEF is headed by distinguished Fellows like former Prime Minister Cesar Virata, former NEDA Secretaries Gerry Sicat and Felipe Medalla, former DOF Secretaries Roberto de Ocampo and Gary Teves (my former boss in Congress in the 90s then in his private consultancy firm Think Tank, Inc. 1999-2001), other known academic economists and business leaders, 

Meanwhile, the US government made an early purchase order of 100 million doses of an anti-Covid vaccine being developed fast by Pfizer (US) and BioNTech (Germany), when their candidate vaccines hurdle all regulatory clinical trials,

The promising candidate vaccines are expected to be commercially available in late 2020 or early 2021.

Big question -- when these new vaccines become available in rich countries and emerging economies, will they be also available in the Philippines?

I think Yes, but perhaps after a year of delay when these have been launched in more mature markets which have no drug price dictatorship policies. This scenario is not imaginary and fictional but based on actual experiences where  many newly-invented and more disease-killing medicines were available in the developed world but are either not available in the Philippines, or made available only after more than two years (see Table 2),

If this happens, desperate patients in the PH will have to buy the vaccines from the US, Europe, Japan, Singapore, S Korea, etc. And the people who clapped Sec. Duque's drug price control policies part 1 (2009) and part 2 (2020) will also clap at this scenario? That we will see soon.

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