Showing posts with label Cheaper medicines law. Show all posts

Wednesday, April 27, 2016

Drug Price Control 43, Mar Roxas and the Cheaper medicines law of 2008

During the 3rd and final Presidential debate last Sunday, Sec. Mar Roxas said, "Alam mo, Karen, sa kasaysayan ko, binangga ko mga malalaking interes. Pharmaceutical industry, cheaper medicine law, banking industry..."

Then a friend reposted a comment from someone attacking the Secretary saying, "You (Mar) lied by proclaiming you are instrumental in cutting the prices of medicines. On July 2009, there was a Senate press release....

"...Authors of the Cheaper Medicines Act in the House or Representatives urged Roxas to support the move to reinstate provisions on automatic price regulation.

"Authors of the Act in the House noted that Roxas vehemently opposed the automatic price regulation, which is the 'heart and soul' of the House version because it could have reduced the prices of more or less 1,600 medicines by at least 50 percent," Sen. Loren Legarda said in response to a question by members of the audience after her speech.

"Mar's amendments on the Cheaper Medicines Act killed the spirit of that law, and instead set a limit to its mandate in regulating pharmaceutical companies' pricing practices," Loren stressed.

The drug price control policy of 2009 affected about 20 or so molecules, usually the most saleable products by multinational pharma. What Cong. Biron, even Sen. Manny Villar, also Sen. Loren? wanted was the creation of a new bureaucracy, the drug price regulation board (DPRB) with a new set of bureau directors, asst directors, staff, office, travel, etc. to be incorporated in the cheaper medicines law of 2008 (RA 9502).

That law was mainly about amending the intellectual property (IP) code so that some newly-invented, patented medicines by multinational pharma, the patent can be confiscated by the government so that local pharma like Unilab will benefit, they can also manufacture and make good profit of those newly-invented medicines. The chapter on price control was a rider in the law, not part of the original draft bill.

So did Mar lie on his role in the cheaper medicines law?

No. He delivered on that amendment to the IP Code, something that I personally did not support, but the law was created nonetheless. Mar was correct in opposing the creation of that permanent bureaucracy DPRB (likely would have been headed by ex-Cong. Biron) and endless drug price control policy.

The threat of patent confiscation by the state from innovator pharma to local generic pharma (silent cronyism actually) created some downward pressure on patented drugs. The off-patent drugs that constitute about 95% of all essential medicines list (EML) of the DOH, again off-patent, are not affected by that law.

The advocates of the creation of DPRB are mostly socialists, explicit or implicit, or plain bureaucrat extortionists. They argue that private pricing of their products is wrong, it should be the state that should price those products. Then the state and the price bureaucrats may allow some pharma products not to be included in the mandatory price control, in exchange for bribes and extortion.

The world health org (WHO) has its global essential medicines list (EML) and from what I read once, 99% of them were off-patent, meaning only 1% of those EMLs in the WHO list are newly-invented and still patented ones. In the DOH's EML, I read that it's between 90-95% are off-patent. Meaning RA 9502 has zero effect on these non-patented, non-IP protected medicines. Like the famous anti-fever paracetamol molecule, it's been off patent since 30 or more years ago.

Generics medicine was given a huge boost since 1988, the Generics law under DOH Sec. Flavier. So the cheaper medicines law of 2008 (20 years after) has contributed very little to generics promotion. The compulsory licensing (CL) and special CL provisions of RA 9502 were also meant to align PH's IP law with WHO's TRIPS flexibilities.

Funny thing about drug price control/regulation, the head of PCPI, the local pharma lobby, said during one DOH meeting that perhaps it's the first time that the local pharma + multinational pharma (represented by PHAP) were united in opposing a govt policy. Before, it was easy for them to take a stand. If PHAP takes position A, PCPI almost always takes position B that's opposed to A.

Death from infectious or communicable diseases is falling worldwide. So since all of us, 100% of us will die anyway, that means that more and more of us will die of non-infectious diseases, like cancer, stroke, hypertension, etc. That is where many of medicines innovation are directed, like there are perhaps 200 different types of cancer, then varieties like a patient with prostate cancer + diabetes vs a patient with prostate cancer + hypertension vs a patient with prostate cancer only.

Also during the 3rd and final Presidential debate, Sen. Miriam Santiago said that her physician sister or friend said that there are new anti-cancer drugs that come out in the US almost every week. These are never-heard before, not part of "orig" nature, science-invented molecules and medicines. They are very expensive, to compensate for very high cost of R&D and long processes of clinical trials, and usually very effective. Miriam added that she feels like new, so alive, because of the new medicines she is taking but are very expensive.

Actually the most expensive medicines are those that don't work. Even a P1 tablet is "expensive" if it does not heal a patient, if it allows the disease to evolve into something more sinister and fatal inside a person's body. A drug that costs P1 M or P5M treatment but can heal a cancer patient, can be considered "cheap" if a patient survives to live more years or decades of productive life.

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Sunday, August 02, 2015

IPR and Medicines 36, On patent protection, data exclusivity and TPP

There was a DOH Advisory Council on the Implementation of RA 9502 (Cheaper Medicines Act of 2008) last April 20, 2015 that I was not able to attend. The Secretariat failed to invite me, but at least they sent me the minutes of the meeting, Among the speakers that day was Atty. Allan Gepte of the Intellectual Property Office (IPO), DTI and he was asked to give updates about the US (and PH?) Free Trade Agreement (FTA) and the European FTA (EFTA). He said that he was not aware of any current (PH-) USFTA negotiations and there are talks among EFTA countries.

He gave some updates about IP concerns in the country instead, like the DTI-IPO-DOH public consultation on IP issues, with some NGOs last March 31, 2015. The topics covered data protection patent term extensions. I was not there in that meeting.

But I have attended the same DTI-IPO-DOH meeting last June 04, 2015 at the DTI International building. It was chaired by DTI Assistant Sec Rodolfo, IPO Dep. Allan Gepte, and DOH-NCPAM Doc Meme Guerrero. I learned about the meeting because three days ahead, June 01, there was another anti-TPP, anti-IPR forum at PRRM, QC, sponsored by IDEALS, MAG, AGAP and CHAT, and the speaker was Dr. Burku Kilik of Public Citizens, an NGO in the US. Then there was a belated invite to attend the March 31 meeting at the DTI.

I think it was a limited consultation because only very few NGOs were there, led perhaps by the Focus on the Global South (FGS) leader, Joseph Purugganan, plus the Fair Trade Alliance, they are campaigning against strong IPR protection in the non-existent EU-PH FTA or non-existent PH membership in the TPP.

At the DTI consultation (a few CHAT members were also there, also Dave Escalona of Unilab), I commented that the PH is not even among the invited members of the TPP (only 4 of 10 ASEAN countries were invited to the TPP) and yet there are a number of noise against those proposed FTAs the issue of IPR.

Assuming for the sake of arguments that (1) there is a TPP Agreement already today or tomorrow, (2) the PH is a member of TPPA, and (3) all those "dreaded data exclusivity", etc. provisions are implemented -- then they will affect only a few, newly-invented medicines and not the 90-99% of off-patent, useful generic medicines in the WHO and DOH essential medicines list (EML). I think anti-IPR campaigners are not aware of this, perhaps they think that any extended regulatory data protection (RDP) and patent protection on innovator drugs also apply to off-patent, generic drugs. Far out, man.

I posted the above comments at the AC email loop. Atty. Joey Ochave, SVP of Unilab and a friend since the 80s in UP Diliman, replied to my comments. He said that

"data exclusivity can apply to off-patent, or even non-patented, drugs. Patent protection is different from data exclusivity but both seek to prevent the entry of generic competition and preserve the monopoly status of the originator. The only difference is patent protection is protected by TRIPs while data exclusivity is TRIPS Plus. Data exclusivity is NOT required by WTO. This is why the US tries to insert it in bilateral or multilateral trade agreements."

I thanked Joey for his comments. These are legal matters, outside my usual cup of coffee so I yield to his explanation.

For now, the PH government through DTI Sec. Domingo has officially signified its intention to join the TPP in the next round of membership expansion. I support this move, I believe that it is not possible for the PH to have a bilateral FTA with the US or even Canada, and the US will remain to be the biggest, most innovative economy in the planet for the next decade or two. The only way to have an FTA with them is through the TPP.

If what Joey mentioned that data exclusivity is to "prevent the entry of generic competition", then it will have a rough sailing in the PH as access to generics is both a health and emotional issue here and in many other countries.

Things like this, the AC can discuss as RA 9502 is first and foremost, about IPC amendment and price regulation is just an add-on or after-thought chapter in the law. I have attended 2 fora already about TPP and IPR involving 2 foreign speakers who are generally anti-IPR and both facilitated by IDEALS and CHAT. The first was a lady speaker from France, the 2nd was another lady speaker from the US, from Global Citizen. The 2 fora did not have legal minds as discussants after the presentation.

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Friday, July 31, 2015

Health Transparency 15, DOH Advisory Council meetings 2015

The DOH Advisory Council (AC) for the implementation of RA 9502 (Cheaper Medicines law of 2008) has already met twice this year. The second meeting was yesterday, but I did not know these meetings as I received no invitation. I only received the three documents for comments by the AC members: (1) "Declaration of Conflict of Interest" form, (2) Draft DOH Administrative Order (AO) on the constitution of the AC, and (3) Draft AO, Regulating the promotion and marketing of pharma and medical devices products. The AC Secretariat noted this and promised to invite me next time.

Here are my comments to those three documents.

1. On the "Declaration of Conflict of Interest".

This was corrected earlier, during the AC meeting about two years ago when USec Mads Valera was presiding, to make it "Declaration of Interest". A "conflict of interest" connotes a negative meaning while a simple "declaration of interest" and affiliations will be more neutral.

For instance, pharma companies, innovator or generics, have the interest of selling more of their products, whether heavily advertised or not, whether endorsed by physicians or not, and so on. The same can be said of the drugstores and pharmacies.

Physicians and pharmacists have the interest of giving healthcare, particularly giving effective and safe medicines, innovator or generics, expensive or cheap. The most expensive medicines are those that do not work, even if the price is only P1 but if it is substandard, or triggers allergies and negative side effects to the patient, in effect it is an expensive medicine. It will invite new treatment, new medicines, new diagnostic tests, new physician pf, etc.

Consumers and patients have the interest of more choices, more options, among the different medicines, treatment, drugstores, clinics, hospitals, physicians, etc. If a doctor is expensive but he/she can make the patient get well the soonest possible, in effect he/she gives good value for money, "cheap" service.

2. On the draft AO constituting the AC.

a. For the nth time, the DOH and the rest of us should STOP using those terms MDRP (and GMAP). These are illegal terms -- not in RA 9502, not in the implementing rules and regulations (IRR) of the law. What is clearly, explicitly, categorically stated in RA 9502 is MRP, maximum retail price. MDRP and GMAP are political inventions by the DOH and DTI (under Secretaries Ona and Favila, respectively) during the last few months of former President GMA. GMAP is subliminal for Gloria Macapagal Arroyo Price, and not really Government-Mediated Access Price. MDRP was invented to deflect calling MRP as Mar Roxas for President because then Sen. Mar Roxas was being desperate to be pro-poor to improve his low ratings in the Presidential surveys in 2009.

b. On Specific functions of the AC. RA 9502 is first and foremost, an amendment to the Intellectual Property Code (IPC) to allow TRIPS flexibilities and hence, institutionalized the possible imposition of IPR-busting policies like compulsory licensing (CL), special CL, parallel importation, etc. Price regulation is just an "add-on" chapter in the law, not even in the original draft bills. But IPR policy review of the AC is not mentioned in the draft AO.

So I propose that IPR Policy review should be #1 under Specific functions, #2 is Price regulation, #3 is Ethical marketing practices. Even if no CL application was ever made since the law was enacted in 2008, according to IPO and Atty. Gepte, it should be in the draft AO because IPC amendment is the main spirit of RA 9502, not price control/regulation or regulation of pharma marketing.

c. Members of the Council. I am honored that Minimal Government Thinkers is still granted a slot in the AC despite the fact that MGT is the smallest unit or institute of all the members. It is not even a health-focused think tank as its core advocacies are small and limited government in general, small/few taxes, free trade, rule of law, individual freedom. Now if there are proposals to remove it from the AC because of this fact, I will not object, nor will ask who propose it. Not that someone is proposing this, but am just trying to be consistent. If I have some questions about the AC or its functions, I am also open to be questioned about my participation in the AC.

3. Draft AO on Regulating promo and marketing of pharma and medical devices.

Being a non-lawyer and non-regulator, my patience for long docs like this 18-pages draft AO is short. Personally, I would wish that ALL sectors and players should have their own respective Code of Ethics or other forms of self-regulation, with own set of penalties and punishment to erring members.

How many pharma companies in the PH, how many wholesalers and drugs import distributors, how many drugstores and pharmacies, how many hospitals and clinics, how many physicians, nurses, pharmacists, etc.? Tens of thousands I would assume. The DOH and FDA have the energy, manpower and other resources to monitor all of them for compliance or violation? I seriously doubt it.

A better approach is self-regulation, self-policing. Then DOH and FDA will only monitor those industry associations, professional organizations, etc. If these civil society organizations do not do their work in penalizing non-compliant players and professionals, DOH will sanction them and their officers.

This is a party-spoiler proposal. After so many meetings and discussions in crafting that document, I will simply propose the above. So I do not expect the above proposal to be adopted, but only floating the idea, and to ask the various industry and professional groups to do it on their own, self-policing, parallel with DOH/FDA monitoring work. Everything is evolving, so that in the future when the finalized AO will need revision, the various civil society groups have already done their homework and are more ready for self-regulation.

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See also:
Health Transparency 7: DOH Advisory Council, CHAT, June 04, 2012
Health Transparency 8: Advisory Council on RA 9502, June 11, 2012
Health Transparency 13: MeTA International Visit to Manila, April 16, 2013
Health Transparency 14: IMS-CHAT Meeting, April 18, 2013

Tuesday, August 19, 2014

IPR and Medicines 29: Parallel Importation and Patent Linkage

This news report last August 8, 2014, was posted with discussion by Atty. Joey Ochave at the Medicines Transparency Alliance (MeTA) Philippines email loop. Joey is the Vice-Chairman of MeTA Philippines, SVP of Unilab, and a friend way back in UP Diliman undergrad in the 80s.

Here is Joey's discussion. Posting this with his permission. It is a well-written, well-argued piece as always, which many people outside of MeTA would be interested to learn. My short comments and Joey's reply further below. A bit long, about four pages, enjoy.
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Parallel Importation and Patent Linkage

I came across the attached article entitled “Pharmaceutical firms seek full implementation of generics law” in Philippine Star last August 8th. It mentions a forum in Manila where three companies called “for the government to strengthen the [Cheaper Medicines Act’s] implementation to allow drug outlets to carry a variety of medicine brands, including those sourced through parallel importation, and give choices to consumers.” (emphasis supplied) The three companies were raided by the National Bureau of Investigation agents for alleged “violation of infringement on patent rights” (sic) and selling “illegal drugs”. They argue that since their drugs have been registered with the FDA, they are “not illegal”.

As an IP & Health Law practitioner and an advocate of the Cheaper Medicines Act, I feel compelled to comment on this news article. (Disclosure: I have no involvement in this case. My only interest is to make sure that the Cheaper Medicines Law is properly understood.)

1. I asked around and learned that the drug molecule in this case is etoricoxib. This medicine is indicated for “acute and chronic treatment of signs and symptoms of osteoarthritis and rheumatoid arthritis; treatment of ankylosing spondylitis; acute gouty arthritis and primary dysmenorrhea; relief of acute pain; moderate to severe acute pots-op pain associated with dental surgery and abdominal gynaecological surgery.” It comes in two strengths – 30 mg. and 60 mg. (MIMS, 135th Ed., 2013). It is marketed in the Philippines as Arcoxia® by Merck Sharp & Dohme (MSD), who I believe is also the patent owner or at least authorized by the latter.

2. The etoricoxib molecule has a valid and subsisting patent in the Philippines. The patent is on the molecule itself. It is therefore not a frivolous patent, which the Cheaper Medicines Law (CML) prohibits.

3. Sec. 72 of the CML amended the Intellectual Property Code of the Philippines to allow parallel importation. The patent owner does not have the right to prevent third parties from importing a drug or medicine that has been “introduced in the Philippines or anywhere else in the world by the patent owner.” (emphasis supplied) By inserting the phrase “anywhere else in the world”, the Philippines adopted the “international exhaustion” principle, which means that if the patent owner sells the patented product anywhere in the world (not just in the Philippines), his patent rights over the patented product is exhausted. He cannot subsequently prevent the buyer of the patented product from selling or importing it into the Philippines. To illustrate, if patent owner X sells his patented medicine to Company Y in Thailand and the latter sells the product to Company Z in the Philippines, Company X cannot prevent Company Z from importing and selling the patented medicine in the Philippines. Why? Because Company X has exhausted its patent rights over the patented product when it first sold it to Company Y in Thailand. Stated differently, a patent owner loses his patent rights over a specific patented product the first time he sells the latter. It is also called the “doctrine of first sale”. The policy rationale behind this rule is that the patent owner has already recovered whatever economic benefits he is entitled to as a patent owner when he first sells the product. In short, kumita na siya when he made the first sale.

4. The article mentions “parallel importation”. I do not know whether this is because the three companies believe they are engaged in parallel importation. In parallel importation, however, what may be imported is only the product of the patent owner. This means one can only import Arcoxia® or any etoricoxib brand manufactured or authorized by MSD. It is not parallel importation if one imports a generic etoricoxib because it did not come from MSD. Again, under Sec. 72 of the CML only the product placed in the market by the patent owner anywhere in the world can be parallel imported into the Philippines. If one imports the generic equivalent of Arcoxia®, this means it was not MSD who placed it in the market and MSD has not derived economic benefit from it. It therefore patent infringement if you import the generic etoricoxib into the Philippines. Hindi siya parallel importation kapag generic equivalent ang inangkat.

5. The three companies also argue that since they were able to secure Certificates of Product Registration (CPR) from the FDA for their etoricoxib product, they are free to sell the same in the Philippines. No, that is not true. They should still have to make sure that they are not infringing upon the IP rights (trademarks and patents) of others. The FDA has nothing to do with patents. Patents are with the IPO. The role of the FDA is simply to make sure that the medicines you will market in the Philippines are safe, effective and of good quality. (This task is no joke given the proliferation of substandard medicines in the world.) This is why the CPRs issued by the FDA state that the CPR holder holds the FDA free and harmless from any damage resulting from any trademark or patent infringement suit against the CPR holder. This means that there is no linkage between drug registration and patents. This is what public health advocates fought for several years ago, which the then BFAD accepted. (Malaysia and Indonesia Drug Regulatory Authorities followed suit.) Unfortunately, with their argument the three companies are unwittingly arguing for patent linkage. (Offhand, I don’t think they realize the implications of their argument.) In any case, for the nth time, patent linkage is NOT required by the TRIPS Agreement. It is in fact a TRIPS Plus provision, or one that it not required by the World Trade Organization. The WTO Doha Declaration on TRIPS and Public Health itself (aside from WHO) encourages developing countries to exercise the public health flexibilities afforded by the TRIPS Agreement. Removing any linkage between patents and drug registration is one of those flexibilities. Kapag naman ibinalik pa natin ‘yan, tayo na ang may problema. Sinabi na nga ng WTO that developing countries like us should make use of TRIPS flexibilities to protect public health, eh.

Drug Price Control 38: Presentation at USC, Cebu, March 2010

* Note: This is an expanded version compared to the one I originally posted last Thursday. The discussion on game theory below is explained as many readers may not be familiar with this applied math theory used in Economics and other social sciences.

Upon the invitation of a friend, Prof. Frank Largo, who was the Chairman of Economics Department then, University of San Carlos (USC), Cebu City, I spoke at his university in March 2010. I forgot to blog about it here, posting now.

My title was a play of words on right and left. Private property rights can be subverted by leftist pricing policy.

I was one of four speakers then. The three other speakers were (from left) Dr. Sophia Mancao of DOH Region 7, Mr. Juanito Luna of Prosel Pharmaceuticals Inc. in Cebu, and Prof. Yolanda Deliman, Dean of College of Pharmacy, USC.

My presentation, below.

Drug Price Control 28: On Cong. Biron and Sen. Villar Bills

Last June 29, 2012, the Coalition for Health Advocacy and Transparency (CHAT) held a meeting-discussion at the PRRM building, Quezon City, on three issues:

1. legislative bills amending the Cheaper Medicines Law (RA 9502) by creating a drug price regulations board,

2. update on the bill raising the excise tax on tobacco and alcohol products ("sin tax bill"),

3. discussions on the proposed Milk Code, other matters.

The meeting was moderated by Atty. Pau Tanquieng of the Ayos na Gamot sa Abot Kayang Presyo (AGAP), the biggest coalition within CHAT. She also presented the three bills creating the drug price regulations board, as well as Sen. Legarda's peculiar bill amending the amendments to the Intellectual Property Code (IPC) contained in RA 9502.

After the discussions, Pau as convenor/moderator, asked, "Anyone here supports drug price control?" Anyone supports the creation of a drug price control regulation board?"

None said Yes, meaning everyone who attended the meeting, including CHAT President, Gov. Obet Pagdanganan has NO as answer to the above questions by Pau. Since she has already written the AGAP position on the same subject, she begged off to write the draft position paper of CHAT. No one else volunteered to do it, so I did. Here's the draft that I wrote, posted in our googlegroups last July 03, 2012.
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Draft Statement by CHAT

On the Proposed Amendments to the Cheaper Medicines Law

The Cheaper Medicines Law of 2008 or RA 9502 is still a new law and there are several indicators that so far, it has succeeded not only in bringing down medicine prices but also in making more essential drugs become more available in more drug outlets nationwide. There are other provisions of the law that are not activated yet and which, when seriously implemented, will further bring down drug prices, The main challenge therefore, for the implementing agencies and various stakeholders in the Philippine healthcare sector, is how to carefully implement those provisions.

There are several bills in both the House of Representatives and the Senate though, that aim to amend certain sections of RA 9502, foremost of which is the creation of a new agency, the Drug Price Regulations (or Regulatory) Board (DPRB). These are HB 1386 by Cong. Ferjenel Biron, and SB 5 by Sen. Loren Legarda and SB 2960 by Sen. Manny Villar.

We believe that the proposed amendments of (a) expanding the drug price control policy made in August 2009, and (b) creating a new office or bureaucracy that will implement such expanded policy, are not necessary at the moment for the following reasons.

One, even before the drug price control policy was made in August 2009, average prices of essential medicines have been declining due to more competition among various drug manufacturers and among more drugstores and pharmacies.

Two, the policy benefited the rich and upper middle class patients who would be buying those branded innovator drugs whether their original price was retained or was slashed by half. Many of the 21 drug molecules that were covered by the policy have cheaper, off-patent competing drugs already available. The poor were patronizing the off-patent drugs which are still cheaper than branded innovator drugs even if their prices were slashed by half.

Three, the policy has contradicted the goals the Generics Act of 1988 or RA 6675. That law was successful in promoting cheaper generics, off-patent drugs to the public. The drug price control policy however, encouraged the people to shift back to the branded innovator drugs made by multinational pharmaceutical companies as their prices were made 50 percent cheaper.

Four, the policy has adversely affected many local generic manufacturers, some of which were forced to close, or pull out some of their drugs since their prices were already low enough. After the mandatory 50 percent price cut by the innovator drugs, they were forced to either make further price cuts which affected their profitability, or simply close shop even temporarily.

As a result, the policy has introduced business uncertainty especially among local generic drug manufacturers. The threat of being forced out of the market by the unfair price competition by the foreign pharmaceutical companies due to drug price control will remain.

Five, creating the DPRB will only add another layer of bureaucracy in the government, which will require another set of budgetary allocation each year. Right now, the DOH Advisory Council on RA 9502 is doing fine monitoring the implementation of the law including the drug price regulation or control policy.

Six, there is a danger that corrupt government officials who will head that board might use their powers to extort money from existing players, otherwise their profitable drug products will be put under price regulation list.

In lieu of those twin moves, we propose the following.

Health Transparency 8: Advisory Council on RA 9502

Last week, June 06, the first meeting for this year of the DOH Advisory Council on Healthcare was held. It was chaired by Assistant Secretary (ASec) Madeleine "Madz" de Rosas-Valera. It was among the liveliest meetings of the Council that I have attended since the Council was formed in 2009.

There were four topics and issues that were discussed and resolved that day:

1. Senior Citizens' discount (SCD), RA 9994, distribution of private sector burden since the government through the BIR assumed zero burden on this.

2. Electronic Drug Price Monitoring System (EDPMS), ~~among the provisions of RA 9502 or the Cheaper Medicines Law of 2008~~ started in February 2006 under AO 2006-0009.

3. Status of implementation of the FDA Act of 2009 or RA 9711.

4. Proposed amendments to RA 9502 creating the Drug Price Regulations Board (DPRB).

Dr. Madz is a vocal, frank and good-humored person. I really liked the way she chaired the meeting. And the DOH, despite its limitations, still offers a more open venue for real discussions and dialogues among various stakeholders on health issues, compared to Congress, both the lower and upper houses. I have argued in my earlier papers here, that there is a tendency of bullying by some legislators during Congressional Committee hearing.

On the expanded senior citizens discount (20 percent off on medicine prices, medical devices, hospitalization and other fees), the problems simply refuse to go away. Or more appropriately, the problems created were larger and plentier than the solutions they are supposed to provide in bringing down the prices of medicines and other healthcare goods and services.

Why? Of the 20 percent mandatory discounts given to senior citizens, 30 percent is supposed to be shouldered by the government through the BIR, in the form of tax credits by retailers, wholesalers and drug manufacturers, the 70 percent to be distributed among these private players. But this is not happening as the BIR refuses to recognize the discount as tax credit. So the retailers and manufacturers, plus wholesalers, are pointing at each other sometimes of who should shoulder the bulk of the burden.

If the retailers get 16 percent or higher discount from manufacturers (like Mercury drugstore chain), 100 percent or the entire 20 percent SCD should be shouldered by the retailers. If the retailers get lower than 16 percent drug suppliers' trade discount, the suppliers will assume the entire burden.

So the government regulates and taxes the private players, then forces them also to provide mandatory discounts at zero financial burden to the government, and the public think that it is the government that gives the discount. This is deception.

What many private small drugstores and pharmacies do, is they do not carry or sell certain medicines and medical devices that are frequently demanded by the senior citizens, in order to avoid or at least limit the losses. Supposedly cheap but not available medicines, this is happening in certain areas of the country.

On the EDPMS, NCPAM mentioned that the recent DOH Administrative Order mandating the monthly updating of drug prices data by drugstores and pharmacies to the DOH, imposing penalties for violation, has been released Ms. Leonila "Leonie" Ocampo, President of the Philippine Pharmacists Association (PPhA), and Ted Colorado from the Drug Store Association of the Philippines (DSAP) explained why EDPMS is not working as designed and only created more problems and jacked up the operating costs of retailers. Leonie cited that they go around the country every week to conduct various seminars to Filipino pharmacists and the problem of EDPMS, the difficulty in complying with it, ranging from technical problems in uploading the data, to system inconsistencies with the DOH server, would always crop up.

Ted mentioned that he experienced facing the computer the whole evening up to early morning the next day and he was able to upload the prices of only five drugs out of several products they sell. I think the sheer volume of data from more than 22,000 drugstores nationwide being uploaded to the DOH would be enough reason to clog the DOH server and cause slow connections.

Madz said this is another example of "baking a cake that we cannot swallow", of having regulations that are difficult to implement. Yeah, that's why I said above that Madz is a frank and good humored person. Even if those being regulated want to comply with those regulations, they simply encounter various technical problems, not to mention diverting manpower away from the pharmacy and advicing patients, to the computer trying to upload data that would hardly go through the system.

There was one good resolution from members of the council who were there -- that they will ask the DOH Secretary to have a moratorium on the implementation of complying with EDPMS pending further studies how to make the process easier to comply with, until end-2012 temporarily.

On FDA law implementation, the submission of a business plan to the DBM was briefly discussed.

On DPRB bill by Cong. Ferjenel Biron, Sen. Manny Villar and others, Dr. Madz said she is preparing an official position paper by the DOH on the subject. Generally, they are not in favor of creating the DPRB, they recognize that price control and regulation should be a "last resort" measure to further bring down medicine prices.

I briefly spoke on DPRB, I said that only one legislator is so gung-ho in creating this new bureaucracy, Cong. Biron and I think that he foresees himself to head this agency once it becomes a law. Given the conflict of interest of Cong. Biron -- he and his family own PharmaWealth, a drug importer and supplier, and Botikang Pinoy, a drugstore, it does not look good that the regulator is also a player, enjoying certain privileges that other drug manufacturers and pharmacies do not enjoy. I believe there is bad if not evil intentions in pushing hard that provision of institutionalizing price control as a policy and creating a permanent bureaucracy that will implement a bad policy.

Among the other agreements that afternoon, aside from (a) having a moratorium on EDPMS are:

b) change the name of the Advisory Council (AC) from AC on Healthcare to AC for RA 9502 implementation.
c) rationalize -- trim down, expand some -- the members of the AC
d) creation of a technical working group to further study the processes and implementation of EDPMS
e) the AC will meet quarterly or four times a year.

Meanwhile, google "drug price control" and here's one surprising result....

Seven of the top 10 articles on page 1 of google search are my papers: two from www.thelobbyist.biz, four from this blog, and one from www.interaksyon.com. :-)
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See also:
Health Transparency 4: Drug Promotions and Government, September 03, 2010
Health Transparency 5: Forum on Good Governance in Health, March 08, 2012
Health Transparency 6: Physician Protectionism, May 19, 2012
Health Transparency 7: DOH Advisory Council, CHAT, June 04, 2012

Friday, May 11, 2012

Fat-Free Econ 9: Drug Pricing Bureaucracy is Not Cool

This is my column today in TV5's news portal. Only one photo was posted there. Additional photos here taken at the Senate hearing that day, plus charts, are not part of the original article.
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http://www.interaksyon.com/article/31666/fat-free-economics-why-drug-pricing-bureaucracy-is-not-cool

FAT-FREE ECONOMICS: Why drug pricing bureaucracy is not cool

11-May-12, 8:56 PM | Nonoy Oplas

Gun control is not so much about guns, but about government control. In the same way, drug price control is not so much about medicine prices, but about the power of bureaucrats to set prices. Guns can kill, drugs can heal, but government control can corrupt. More power to control something means more opportunity for corruption.

This became clearer to me when I attended the Congressional Oversight Committee on Quality Affordable Medicines at the Senate yesterday. It was chaired by Sen. Manny Villar and co-chaired by Rep. Albert Garcia – both of whom head the Committees on Trade and Commerce in their respective chambers.

The other legislator who attended was Rep. Ferjenel Biron (4th District, Iloilo), the main author of a bill creating the Drug Price Regulation Board (DPRB), of which a counterpart bill was filed by Sen. Villar. Besides the three, no other legislator attended the hearing. The panel of resource speakers represented various interests and groups in the Philippine healthcare sector.

What usually happens in Congress-ional committee hearings is that the legislators tend to over talk while the invited resource speakers can speak only when being called, and can be cut by legislators anytime they want.

Rep. Biron spoke long, glorifying the magic that government price regulation and control can do because “competition does not happen, drug prices here are very high compared to prices in India and Pakistan.”

He was citing old figures. India has had a drug price control policy since the mid-1970s but slaps low or zero taxes on medicines. Here, medicines are slapped with import tax, value-added tax and other levies, national and local. That partly explains the price differential between the two countries. But taxation of medicines here never figures in the explanation given by legislators.

The local generic companies, the multinational innovator companies, the local pharmacist association, medical association, drugstore association, hospital association, academic pharmacists, and some NGOs like us in Minimal Government Thinkers, are unanimous in saying that price control is not the answer as competition among various players has resulted in the slow but steady decline in average prices of drugs.

To say “millions of poor people still cannot afford many essential drugs” is wrong on two counts. One, drug prices are falling, as presented by Reiner Gloor of the Pharmaceutical and Healthcare Association of the Philippines (PHAP is mostly multinationals) and Beau Agana of the Philippine Chamber of Pharmaceutical Industry (mostly national pharmaceutical companies).

For instance, the price of anti-hypertension drug molecule amlodipine has gone down from around P40 per tablet in 2007 to P33 in 2008 before the price control policy. It further dropped to P29 when price control was imposed, before last year's P18.

The price of anti-bacterial infection co-amoxiclav has gone down from around P56 per tablet in 2007 to P50 in 2008, P41 in 2009, and P33 in 2011.

A second reason it's wrong to say that poor people cannot afford essential medicines is that for really poor people, even a P5 tablet is still “expensive and unaffordable”, since they want the government – national and local – to give away the medicines for free.

The Department of Health has identified several medicines as “entitlements,” to be given for free to certain poor patients. Some rich local governments – such as the cities of Manila, Makati and Quezon - have city-owned hospitals and they treat poor patients for free, even give away some medicines for free. This is an example of making essential drugs not just “cheap and affordable” but free for the poor, and even to those pretending to be poor.

One danger of having a new government bureaucracy that has the power to slap price control on any medicine and vaccine, especially those in the Essential Drugs List (EDL) of the DOH, is that it can be a big tool for corruption and extortion. A corrupt price control bureaucrat for instance can intimidate or harass any pharmaceutical company to pay a huge amount, otherwise their most popular, most saleable drugs will be slapped with a steep tax or voluminous paperwork, thus leading to heavy losses.

The reasons or alibi for regulating prices can be endless. “Millions of Filipinos are waiting and dying out there” is a statement for instance, that I heard at least three times from Rep. Biron during the hearing. So whether people are dying (we all die, right?) from cancer (and there are probably 200+ different types of cancer), various diseases of the heart, cerebrovascular diseases, pneumonia, diabetes, or mosquito-borne diseases (dengue, malaria, etc.), the threat of price control will be on the heads of the pharmaceutical companies.

There is too much discourse on curative healthcare, such as making various medicines cheaper. Preventive healthcare - like having healthy lifestyle (people should not over-smoke, over-drink, over-eat fatty food, over-sit) – is seldom or hardly discussed in many public discourses on healthcare.

One reason perhaps is that there is no opportunity for extortion and corruption in telling people to lead healthy lifestyles. But there is a big opportunity for extortion and corruption in various types of government intervention in curative healthcare. Like creating a price control bureaucracy, or buying tens of billions of pesos of medicines and clinic/hospital supplies for DOH and LGU hospitals.

Competition among various players, not more regulation by government agencies - whether existing or future bureaucracies - is the best tool to promote public health at the least cost to taxpayers, and invite the least opportunity for robbery among the corrupt officials in government.
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See also:
Fat-Free Econ 8: Drug Price Regulation is Wrong, May 04, 2012

Drug Price Control 23: Greece's Pharmacy Nightmares, January 13, 2011

Drug Price Control 24: Forcing Drug Firms to Report Payment to Doctors, January 24, 2012

Drug Price Control 25: Top 10 Articles on Google Search, April 03, 2012

Tuesday, November 08, 2011

IPR and Medicines 16: Wikileaks and the Cheaper Medicines Law

In a news report today in the Philippine Star, author Sheila Crisostomo wrote,

http://www.philstar.com/Article.aspx?articleId=745753&publicationSubCategoryId=63

WikiLeaks: US lobbied vs cheaper medicine law in Phl By Sheila Crisostomo (The Philippine Star) Updated November 08, 2011 12:00 AM Comments (11)

MANILA, Philippines - The online whistle-blower WikiLeaks reported that the United States had lobbied against the Cheaper Medicine Act in the Philippines after American stakeholders expressed concern about the possible changes in the country’s pharmaceutical policies.

WikiLeaks claimed that the US lobbied with former senator and now Transportation Secretary Manuel Roxas II and Quirino Rep. Junie Cua who sponsored the law, Republic Act 9502.

A press statement revealed that on Oct. 27, 2005 then US Ambassador Kristie Kenny said that US Intellectual Property (IP) Rights holders “were concerned about Roxas’ move to amend the IP Code with respect to patents and parallel imports for pharmaceuticals.”

Kenny supposedly said that Roxas’ bill was “troubling US pharmaceutical rights holders trying to retain their market share and profitability in the Philippines.”

“Roxas’ proposal would change the IP Code so that the period of patent protection begins after the product has been introduced anywhere in the world rather than just in the Philippines,” the statement quoted Kenny sa saying....

Ms. Crisostomo did not cite her source/s but it should have come from the various wikileaks and cablegate, gathered by James Love of the Knowledge Ecology International,

http://keionline.org/node/1225
Wikileaks cables on the US opposition to Philippines legislation on affordable medicines

Submitted by James Love on 3. September 2011 - 7:44

From KEI staff review of Wikileaks cables (http://keionline.org/wikileaks)

From September 19, 2005 to January 15, 2010, the US Department of State sent dozens of cables from Manila reporting on disputes in the Philippines regarding IPR and the pricing of pharmaceutical drugs. Much of the U.S. advocacy in the Philippines was done in close cooperation with Pfizer.

One disturbing feature of the cables is the constant lying about the IPR norms in the TRIPS agreement. For example, the Department of State often claims that TRIPS requires patents on new uses of old drugs or data exclusivity (it clearly does not). The US Department of State also implies in several cables that parallel trade (importing the patent owners' own product that was placed in the market in another country), is inconsistent with TRIPS....

The other reference to Ms. Crisostomo's article, especially her last paragraph,

The statement showed that Kenny had said the Philippine government must tread carefully and should not ignore the multinational company’s warning that it could withdraw many drugs from the Philippine market if price controls are put into effect.

is from here, http://www.cablegatesearch.net/cable.php?id=09MANILA468

Cable reference id: #09MANILA468

Reference id	aka Wikileaks id #195307 ?
Subject	Philippines Closer To Drug Price Controls
Origin	Embassy Manila (Philippines)
Cable time	Thu, 5 Mar 2009 05:50 UTC

...

¶5. (SBU) In addition, the Association asserts that the Health
Department has been pressuring companies to sell drugs in small packages that can retail for 100 pesos, or around USD 2, offering to exempt such drugs from price controls. In many cases, this can amount to a handful of tablets needed for one cycle of a course of doses. Representatives of Pfizer warned us that for certain antibiotics, small doses can promote antibiotic-resistant bacteria, and claimed that it is being pressed to sell antibiotics that currently cost over 1000 pesos for the 100-peso fixed price. Pfizer said that if these price controls are put into effect, it will withdraw many drugs from the Philippine market.

Here now are my commentaries to the above articles.

1. About her news story, 'US embassy lobbied vs CML", I think it is obvious that ALL embassies by governments to other countries are lobby groups for the political, economic, business and other interests of those governments. For instance, the Philippine embassy in the Kingdom of Saudi Arabia (KSA) is there to lobby Philippine interests on (a) secure oil imports supply, (b) secure more Filipino workers' placement in KSA, (c) lobby the Saudi government not to proceed with beheading or other capital punishment against Filipino OFWs convicted of some crimes in the kingdom, among others.

The same way, the US embassy -- and UK embassy, Swiss embassy, etc. -- would have talked to the authors of the CML then to protect the IPR of American, British, Swiss, other foreign innovator pharma companies here who will be affected by the major amendments to the Intellectual Property Code (IPC) re compulsory licensing (CL), special CL, exhaustion of rights (aka parallel importation), Bolar principle (aka early working), other IPR-related policies.

2. On the proposal by the DOH to "chop-chop" expensive anti-biotics into small dosages so these can be sold at P100 a piece, I think it's rather weird for the DOH to do or say that. Anti-biotic resistance (ABR) is a real and existing health risk. Once a patient develops ABR, the disease or infection will not be healed; or it can be temporarily cured, to resurface later as a new, more powerful disease, that will require more expensive treatment. The patient will be the end-loser.

One alternative to expensive vaccines and anti-biotics is to drop or remove government taxes (3-5% import tax + 12% VAT + local government taxes) on medicines. Another is to encourage the entry of more innovator companies that can supply cheaper alternative drugs (competition among innovator companies), or scout for existing cheaper generic alternatives.

Meanwhile, here are some slides presented by Reiner Gloor, Executive Director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP) during the 2nd Generics Summit, September 7-8, 2011, Richmonde Hotel, Eastwood, Quezon City. The event was sponsored by the Department of Health. PHAP is the federation of mostly multinational pharma companies and some big drugstore chains. Reiner was showing the value and risks of drug innovation.

Up to 10,000 molecules and compound of molecules are invented and on average, only one will get the nod of the FDA.

Out of the 20 years patent life of a drug molecule, about 9 to 10 years consumed by regulatory approval process to test on efficacy and safety of those new drugs. The commercial period to earn for the innovator companies is only 10 to 11 years, then the patent will expire.

Then various generic manufacturers, and the innovator companies themselves compete with each other to produce the low price, effective drugs and treatment. And this is where the public maximizes the benefits of drug innovation.

Reiner also showed one slide on the rising cost of developing one new drug. As of 2005, their industry average cost was $1.3 billion already. It should be higher at this time.

I remember a debate a few years ago with one friend in the health NGOs, she said that they do not believe that the cost of developing just one new drug would be $1 billion or more. She quoted one estimate saying it's only around $160 million. If this is so, then the number of innovator companies worldwide should drastically expand. Why be contented with being a generic manufacturer, waiting for the patent of a successful drug to expire, or spend big money to lobby governments and legislators to make it easier to impose compulsory licensing (CL) and special CL, when they can be innovator themselves? Yes, why spend big money on politics and politicians, when you can spend it on drug innovation instead?

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See also:

1. Drug price control 17: Wikileaks on the planned Pfizer drugs withrawal, Sept. 22, 2011.
2. Drug price control 18: Wikileaks and former US Amb. Kenney on price control, Sept. 28, 2011
3. IPR and Medicines 15: New Vaccines and Public Health, November 05, 2011

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