Generic Drugs Philippines 3: Dr. Alran Bengzon on Medicines

Dr. Alfredo "Alran" Bengzon at "3/4 of a century old" remains very sharp intellectually. He actually looks like late 60s, he has no white hair, unlike me, maybe he simply dyed it. Wisdom and humility is very obvious in the way he speaks: mild, clear and emphatic at times.

I attended a forum yesterday on Access to Medicines: Reminiscing the Past to Pave the Way for Universal Health Care sponsored by the Ayos na Gamot sa Abot-kayang Presyo (AGAP) Coalition held at Sulo Riviera Hotel, Quezon City. The event was co-sponsored by many other groups like the member-NGOs and POs of AGAP, and RiteMed/United Laboratories (Unilab).

The speakers before Doc Alran were:
1. Maria Mendoza, Executive Director of the Fair Trade Alliance (FTA), another coalition that is composed also of similar NGOs that belong to AGAP. She gave the Welcome Address.
2. Former MOH UnderSecretary Rhais Gamboa, now VP of Unilab
3. Olive Parilla of Homenet Philippines/PATAMABA, a member-NGO of AGAP (leftmost in this photo)
4. Elpidio Peria of BITS Policy Center, General Santos City, and
5. Susan Roces, Ambassadress of RiteMed, a famous actress many years ago (2nd from right). She repeatedly announced "Mag RiteMed na tayo." It was a big advertising for RiteMed/UL in the forum.
AGAP Convenor and former Senator Bobby Tanada rightmost.

The last three speakers gave testimonials on "How generics helped improved their living conditions/access to health".

Generic Drugs Philippines 2: 24 Years of Generics Act

Generic drugs are those medicines not covered by the patent protection and which are labelled solely by their international non-proprietary or generic name. That's the official definition in The Generics Act of 1988. Wiki also defines it as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use... A generic drug must contain the same active ingredients as the original formulation."

The Generics Act will turn 24 years old this coming mid-September. And the drug price control policy will also turn 3 years and 1 month old that time.

A local health coalition, the Ayos na Gamot sa Abot Kayang Presyo (AGAP), or Good Medicines at Good Price, http://ayosnagamot.wordpress.com/, in partnership with several organizations, will sponsor a talk by the DOH Secretary when the law was enacted, Dr. Alfredo "Alran" Bengzon next week. I was among those invited through our bigger health association, the Coalition for Health Advocacy and Transparency (CHAT), I will come.

The law has five goals why it was enacted:

To promote, encourage and require the use of generic terminology in the importation, manufacture, distribution, marketing, advertising and promotion, prescription and dispensing of drugs;

To ensure the adequate supply of drugs with generic names at the lowest possible cost and endeavour to make them available free for indigent patients;

To encourage the extensive use of drugs with generic names through a national system of procurement and distribution;

To emphasize the scientific basis for the use of drugs, in order that health professionals may become more aware and cognisant of the therapeutic effectiveness; and

To promote drug safety by minimizing duplication in medications and/or use of drugs with potentially adverse drug interactions.

I think these are good and clear objectives. It is clear that the law would not be looking at branded generics as purely "generics" because the latter emphasizes the scientific name of the drug molecule, not its commercial brand identify, even if the latter is manufactured by a pharmaceutical company, domestic or multinational, that produces 100 percent generic drugs.

As explained to me by Lyle Morrell of Watsons and Joey Ochave of Unilab on two separate occasions, the "generics" as contained in the Generics Act of 1988 refer only to "generic-generics". There are two other type of generics in the local market: (a) product-branded generics (Examples: Tempra, Alaxan FR, Biogesic, Solmux, Tuseran, etc.) and (b) company-branded generics (Ritemed, Unilab ba yan, Pharex, etc.).

Thus, the latter two would not be considered as "generic-generics" which again, is the main advocacy of that law. This may sound like discussion on semantics but it maybe important to clarify these things as certain sectors and players in the local health sector are confused and may not be aware of this distinction and their implications when it comes to strictly implementing that law.

Doc Alran has a wide experience in health policy, both public and private healthcare. He was DOH Secretary from March 1986 to January 1992, see the DOH's brief description of his term here. After his term as DOH Secretary in the late 80s, and a short stint as a Peace Negotiator, I think he never went back to the public sector. He is now the Dean of the Ateneo School of Medicine and President/CEO of Medical City. He has lots of insights as a private health practitioner and manager.

I wrote here one time, that he talked at one of the meetings of the DOH Advisory Council on Price Regulation more than two years ago, saying that drug price control policy is wrong. In their case at Medical City, he said that they are in the business of healthcare, to make sick people get well and go home, they are not in the business of drug retailing. By forcing prices of certain drugs to go down at a level that does not reflect the cost of dispensation, monitoring, replacing, monitoring, etc., their bottomline as a healthcare provider is adversely affected. He called the drug price control policy as a short-sighted, quick-fix solution that creates more problems than it solves and thus, requested that the policy be withrawn, or at least the policy should not apply in hospital pharmacies.

It seems that then DOH Sec. Francisco Duque ("DOH-K" was the slogan of the DOH in his term) was more of a politician than a healthcare professional. Advice like that, as well as the voices and representatives of the different sectors who are members of the Advisory Council -- local pharma, multinational pharma, drugstores, hospitals, physicians, pharmacists, consumer groups (like us) -- did not get into his ear. Then DOH USec Alex Padilla and NCPAM Director, Doc Robert So were there in that meeting. USec Padilla I think was not convinced of drug price control policy, but his boss, Sec. Duque, and their higher boss, then President Gloria Arroyo, wanted that policy for additional populism, he has no option but obey his bosses.

It would be interesting to hear what former Sec. Bengzon would say about the Generics Act, 24 years after it was passed. The event is free but it is by invitation only. For those interested, you may call and write AGAP.
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See also:
Generic Drugs Philippines 1: Generics Summit, September 2011, February 09, 2012
IPR and Medicines 18: Generic Drugs and the Consumers, November 18, 2011

Drug price control 6: Exploring just one price for each drug

(Note: this is my article today in thelobbyist.biz, Merits and demerits of high drug prices, Part 1.

When drug prices are high, people complain and governments are pressured to intervene to stabilize, if not cut, drug prices. When drug prices are low or are given away for free, irrational drug use can happen as people tend to over-dose, or take medicines just for the psychological effect of getting well. Drugs are cheap or free anyway.

Drug pricing, like oil pricing, electricity and food pricing, will remain a contentious issue in many countries, developing ones especially like the Philippines. The drug price control policy imposed since August 2009 for selected drug molecules and products remain until today and there seem to be no signs of being withdrawn.

Last week, I attended a meeting of the Coalition for Health Advocacy and Transparency (CHAT), a coalition of health NGOs and some think tanks which have health research projects. It is also the civil society partner or component of the Medicines Transparency Alliance (MeTA)-Philippines. The think tank which I head, Minimal Government Thinkers, is a member-NGO of CHAT.

There were many topics that were discussed during the meeting, but I will focus here on three controversial proposals made by some fellow NGO leaders within CHAT.

1. There should be only one price for each drug – of the same molecule, same brand, same dosage, from the same manufacturer. Regardless of the drug outlet – government hospitals, private hospitals Mercury Drugstore, Botika ng Bayan or any other public and private drugstores. And regardless of outlet location – Metro Manila, other big cities, far away municipalities and barangays.

2. There should be no advertising allowed for medicines in order to help reduce drug prices. Instead, all pharma companies will be featured in a public forum attended by physicians, pharmacists, other health professionals and the public.

3. Government should put up its own pharmaceutical company to produce essential medicines. Thailand has one, the Government Pharmaceutical Organization (GPO).

Here are my comments and reactions to the above three points.

On #1. Prices of drugs in hospitals are generally higher than the average price in most drugstores. Hospitals also generally do not allow patients’s guardians to buy drugs outside of the hospital pharmacy while the patient is still confined. One explanation is given by the President of the Private Hospital Association of the Philippines (PrHAP), Dr. Rustico Jimenez, is that some patients who happen to ingest substandard or fake drugs bought somewhere because the drugs there are sold there very cheaply, either do not get well or develop negative reactions or new diseases. And the hospital and the attending physicians are sued by some patients.

Former DOH Secretary and now President of Medical City Hospital, Dr. Alran Bengzon, explained in one of the meetings of the DOH Advisory Council on Price Regulation sometime in late 2009, explained it clearly. I was there in that meeting. He said, “We are in the business of healthcare, not selling medicines. The reason why hospital prices of drugs are higher is because there are administrative costs in the prescription, dispensation and monitoring of medicine to patients. After we give medicines to patients, we monitor if the expected improvement within a few hours will happen. If not, our physicians can discontinue such drugs and prescribe another medicine or other treatment. There are costs to these that we pass on as additional cost to medicines. Our goal is our patients to get well the soonest time possible.”

And each drug retail outlet has its own operating cost that is different from other outlets. For instance, some drugstores are air-conditioned while others are not. Some drugstores have competent full-time pharmacists who are paid higher while others have less-trained and part-time pharmacists who are paid lower. Other outlets are in more expensive locations where the rental cost per square meter is higher. Some cities charge higher and plentier local taxes and business permit fees than other cities and municipalities. Local taxes and annual business permit fees in the cities of Makati and Manila for instance, are a lot higher than local taxes and business permit fees in the cities of Davao, Dumaguete, Tagbilaran, Tacloban and other cities. The above factors can explain why some smaller drugstores can survive in cheaper cities even if their drug prices are lower, but cannot survive in more expensive cities.

This graph will help explain the point further.

Each point (A, B, C,.. X) represents an “equilibrium price” for each outlet. Some can sell at a lower price and still make a profit. Some can sell at a higher price while paying higher operating costs and still make a profit. We can say that points A to D are prices by four different hospitals. Points F to G are prices by the top three drugstore chains, while points H to X are prices by the Botika ng Barangay, Botika ng Bayan, or smaller, independent private drugstores.

The differences in various costing, differences in shop branding, also explain why a softdrink from the same manufacturer, say Coke in can, has different prices – in a sari-sari (variety) store, in a carinderia, in a convenience store, in a medium-priced restaurant, in an expensive restaurant, in a 3-star hotel, in a 5-star hotel, and so on. The restaurant or shop owners attach various costs to the marketing and selling of their food and drinks products and services.

It is wrong, therefore, to expect or demand, that “there should be only one price for each drug product nationwide”.

Part 2 next week will tackle my comments to point #s 2 and 3 above.
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See also Drug price control 5: Mandatory discounts and acronym politics