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

BWorld 3, UHC via Health Voucher System

* This is my article yesterday in BWorld.

THERE ARE MANY claims and complaints that (a) the health condition of Filipinos is “deteriorating” because of rising inequality, and (b) because government health spending is not big enough. Thus, the goal of universal health care (UHC) for Filipinos will remain an illusion.

Are these statements true and correct? Two charts below will provide some answers to these questions above.

LIFE EXPECTANCY

If people evade or survive various infectious diseases, if they can deal more effectively with non-infectious diseases, then they can live longer, work and enjoy life longer. (see Figure 1)

Figure 1: Life expectancy in Asia, 1970 and 2010 (in years)

On May 14, 2015, I attended the Department of Health (DoH) consultation with civil society organizations, on the proposed DoH 2016 budget. This chart was among those presented by the DoH. Its budget has been increasing rather fast, rising by almost P10 billion a year from 2010 to 2013, then by around P18 billion a year from 2014 to the proposed 2016 budget. (see Figure 2)

Figure 2: DoH Budget, 2010 to Proposed 2016 (in billion pesos)

DOH BUDGET

Only the Department of Social Welfare and Development (DSWD) has a comparative huge jump in the annual budget as the DoH, because of the expansion of the conditional cash transfer (CCT) program. The big annual increase in DoH budget is also tied to the CCT program as the DoH has significantly expanded PhilHealth coverage and subsidy to the poor, particularly those who are CCT beneficiaries. So it is a DSWD-DoH “tag team” that has been given high priority by Aquino administration.

The huge increase in the proposed 2016 DoH budget is mainly to increase the MOOE by P11.75 billion, and it is targeted to finance expansions in (a) Subsidy for health insurance premium payments of indigents and senior citizens, P6.72 billion, and (b) Implementation of the Doctors to the Barrios and Rural Health Practice Program, hiring of UHC implementers, P2.83 billion. (see Figure 3)

Figure 3: Budget increase from 2015 to proposed 2016 (in billion pesos)

Going back to the two questions above, (a) are Filipinos’ health conditions deteriorating, and (b) is government health spending not big enough?

No to both questions. The fact that Filipinos’ life expectancy keeps rising means that less people are dying in each age bracket. They live and work longer on average than their parents and grandparents.

Note also that Figure 2 shows only increases in the DoH budget. Other agencies and departments also have rising health spending, like the following: (a) Philippine General Hospital (PGH) which is under the UP budget; (b) AFP and Veterans Hospitals, which are under the DND budget; (c) PNP Hospital which is under the DILG budget, and so on.

Furthermore, almost all provinces and big cities have their own provincial or city hospitals. The luckiest of them all is the city of Manila: it has six city-owned hospitals, three DoH hospitals and the UP PGH. Ten government hospitals in one city, four national and six local, while some cities do not even have a single hospital. So when people talk about “health inequality,” government itself is a major contributor to it.

The voices of “more public health spending” never die out, they even rise every year. But is government direct provision of health care the most appropriate way to achieve UHC?

HEALTH VOUCHER SYSTEM

Here is a counter-offer. The DoH will still get huge money from taxpayers and Congress. It will still be the lead national agency in ensuring UHC. But there will be some difference in these mechanisms.

One, DoH will no longer be the direct provider of health care via its hospitals, free or subsidized medicines package, and indirect subsidy to poor people via PhilHealth enrolment. Instead, all hospitals will be private, all DoH hospitals will be privatized (not abolished).

Two, DoH will be giving health vouchers to all households nationwide, rich and poor alike as all households are taxpayers, whether via direct income taxation or indirect consumption taxation (VAT, excise tax on fuel, etc.). Say a flat rate of P15,000 per person per year, regardless of age. So a household with four members (parents + 2 kids) will get a P60,000 health voucher per year. The household can buy a private health insurance, HMO or hospital, that will take care of them for one year based on certain health packages, including the annual general checkup.

Lousy and insensitive insurance firms will lose customers and go bankrupt. Competition among players and vouchers for the poor that are as good as cash will empower them, and arrogant insurance firms cannot easily disrespect them. Richer households who want bigger insurance coverage will simply buy a higher annual package and they just pay the balance between the higher cost minus the vouchers issued by the DoH.

Three, if none of the family members gets sick for the year, the balance between the value of voucher minus the cost of annual general check-up can be converted into cash by the household.

This is important. Why? The households will have the incentives to take good care of their bodies. Young kids can tell their parents like “Papa/Mama, please do not smoke or drink too much, so you don’t get sick often, so we can have extra cash at the end of the year, then you can buy us more food or more clothes and toys.”

At the moment, people are “rewarded” with government subsidies if they get terribly sick and hospitalized . If they do not get sick for one whole year, they do not get any subsidy despite the huge tax money at the DoH and its various hospitals, national and regional offices yearly.

The voucher system with redeemable cash reverses the incentives system. If people get sick, they can still be covered by the health voucher; but if they take good care of their health and do not get sick, they can have cash at the end of the year.

This is a win-win situation for both the DoH and the public. The DoH will still get its huge annual budget including its share from the huge sin tax, the public will get the money via health insurance and/or redeemable cash.

Bienvenido Oplas, Jr. is the president of Minimal Government Thinkers, Inc., a Manila-based think tank advocating free market economics.

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See also: 
BWorld 1, PH Economy and Politics, Is there a Disconnection? April 24, 2015 
BWorld 2, Benefits of Trade Liberalization for the Philippines, May 16, 2015

UHC 26: Public and Private Spending on Health, January 31, 2015 

UHC 27: Paranoia on Healthcare Corporatization and Privatization, April 06, 2015 

UHC 28: Health Pessimism Despite Improving Public Health, April 10, 2015

UHC 24: Corruption in Government Purchase of Medicines

An old article by Rappler got circulated by some friends in fb. Portions of the paper said,

…Sharing his experience with Rappler, the 26-year-old doctor said he was shocked by the steep prices of purchased medicines and medical supply. He had requested for the drugs for his RHU some time in December 2012.

"Even test tube brushes, which cost around P10-P20 perhaps, cost P350! Gloves which cost P120-P150 pesos are priced P550 in that receipt. Amoxicillin syrup which costs P15-P20 is priced P115," he said in an interview. The receipt was dated Jan 13, 2013.

The system is simple, based on what the doctor deduced from his experience: the supplier and mayor "agree on a certain jacked-up price" where both get to have their share from the extra amount added on top of the medicine's real price.

"If I did the purchase myself and not thru the Bids and Awards Committee, the amount would just have been around P60,000-P80,000," he said, adding that it could have saved the municipality some P320,000….

The same doctor sees around 20 patients a day. As in Casuga's case, medicines are dispensed to residents at the Office of the Mayor and not at the rural health unit (RHU).

"All patients who need medicines as per my prescription have to go to his (mayor's) office to get the medicines themselves... Even this much jacked-up medicines are used as political tools," he said.

Casuga said this set-up affects the "continuity of care" delivered to the town residents.

I hope I can also see they are getting the right medicines. Those who dispense the drugs are waiters of the mayor with no health background..

Casuga narrated an instance when a patient came back to him with the wrong medicine and said “that's what they gave upstairs [in the mayor's office.]"

A mother with her 5-year-old suffering from pneumonia was also hesitant to go to the mayor's office to ask for the prescribed medicine, as she was not a voter….

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Another case of local government corruption. This largely explains why medicines constitute a big portion of government health spending, both national and local agencies. What could be a P2 million medicines procurement can become P5 million or P10 million or even higher. Then some sectors complain why "medicine prices are high... and thus government should intervene more in pricing." Very often we are talking about government failure and blame or call it as market failure.

In one MeTA-Philippines forum at the AIM in Makati last year, the DOH showed some tables, procurement of medicines by some government hospitals, DOH and LGUs owned. Same medicines from the same supplier, PharmaWealth (owned by former Cong. Ferjenel Biron) have different prices, the price range sometimes 10x among government hospitals.

Transparency, DOH itself is hiding this and other data. NCPAM presented it before MeTA, they said they will verify the numbers further, and that was the last news I or we heard from them. I have several friends at NCPAM, I think they are not allowed to release such data without clearance from the DOH Secretary or Undersecretary.

I remember also a few years back, the WB-funded survey done by ANSA-EAP, or of Ateneo School of Government, of medicines procurement by different government hospitals, from UP-PGH to AFP Medical Center to some DOH and LGU hospitals. Same medicines and prices range up to nearly 100x, with the AFP hospital having the highest procurement prices. The WB itself hide that data, then WB talks about transparency and "good governance". Double talk can happen anywhere.

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See also: 

UHC 16: Dialogue on UHC and Medicine Access, AIM July 25-26, July 24, 2013

UHC 20: Health Equality Will Never Happen, September 20, 2013 

UHC 21: The PGH, Manila City Government and Civil Society, December 10, 2013 

UHC 22: Shortage of Doctors in the Philippines, February 10, 2014 

UHC 23: Orthopedic Hospital Corporatization, Not Privatization, February 21, 2014 

Drug Price Control 35: DOH Procurement Price and Lobbying for Another Price Coercion, July 29, 2013 

Drug Price Control 39: Presentation at USC, Cebu, March 2014, March 25, 2014

Generic Drugs 4: DOH Generics Summit 2013

The Generics Act of 1988, RA 6675, turned 25 years old last month. The Department of Health organized the "Generic Medicines Summit 2013" at the DOH Convention Hall, DOH Compound, Manila last Monday, September 30, 2013. It was a whole day activity, I was not able to attend the morning session, I went to the afternoon sessions.

Panel Session No. I, 1-2:30pm, the theme was “The Impact of Generics Policies in Improving Access to Medicines and Health Outcomes”. The speakers were:

Presentation No. 1: Global Achievements in Implementing Generic Policies Presentation No. 2:Local Market Trends Presentation No. 3: Analysis of the Prescribing and Dispensing of Generic Medicines as Prescribed by Generics Act of 1988 Panelists: PCPI, PHAP, PPhA

Dr. Brian Godman Mr. Romeo Castro, GM, IMS Health Phils., Inc. Dr. John Q. Wong, Consultant, PIDS

Panel Session No. II, 2:30-5pm, the theme was “Progress of Pharmaceutical Reforms and  Continuing Efforts of Government in  Assuring Availability and Affordability of  Quality Generic Medicines”. The speakers were:

Presentation No. 4: Impact Evaluation and Monitoring of the Cheaper Medicines Act of 2008 Presentation No. 5: The Impact of the Cheaper Medicines Act on Households in Metro Manila:  A Quarterly Study” Presentation No. 6: Philhealth’s Initiatives in Promoting and Using Generic Medicines Presentation No.7: FDA Efforts to Assure the Quality of Generics in the Market

Dr. Jesus N. Sarol, Jr. Consultant, PCHARD Dr. Eleanor De Guzman Research Consultant, PIDS Dr. Poch Soria Vice President, PHIC Dr. Kenneth Hartigan Go Director General, FDA

The panel of reactors were Dr. Delen de la Paz of HAIN and UP College of Medicine, Dr. Isidro Sia of the National Formula Board, also of UPCM, and Atty. Pau Tanguieng of AGAP. Pau was not around, Before panel 1 ended, Dr. Melissa Guerrero of NCPAM asked me if I can be a reactor, speak as representative from civil society. It’s not a difficult task, I quickly said Yes.

So I was seated in the front table beside Docs Dela Paz and Sia, have a good view of the speakers and their presentations. Nice.

Dr. Sarol and Dr. de Guzman spoke about their respective assessment reports about drug price regulation of the Cheaper Medicines Act (CMA) of 2008, FDA Director KHGo spoke about the reforms that FDA is doing, and Doc Soria spoke about new thrusts of PhilHealth.

My comments to the four presentations:

1. Dr. Jesus Sarol presentation...

Their study covering 2009-2011 simply confirms what we already know, that medicine prices are just following the law of gravity, they are coming down. In fact even before CMA became a law, ave medicine prices have been declining slowly, thanks to that good old reliable law of competition.

I added that CMA is more than drug price regulation or control. The law is mainly revising the Intellectual Property Code (IPC) of the country to accommodate compulsory licensing (CL) and other IPR concerns.

2. Dr. Elanora de Guzman paper:

Good findings in their study, confirms that the main beneficiaries of the drug price control policy were the upper middle class and the rich, class AB and C, not the poor, class DE. Before price control was imposed, many cheaper generic drugs were available, so when Pfizer's Norvasc (anti-hypertension) price was forced down from P44 to P22 a tablet, there were several generics already selling at P7.50 or lower. The poor will find the P22 still expensive and won't buy it, they'll go for the P7 or P5 other branded generics.

3. FDA Director, Doc KHGo:

Happy that FDA is promoting the rule of law in ensuring the safety of food, medicines, drinks, other consumer (chemical, biological) products, law based on science. Congratulations.

But it is simply impossible for FDA to monitor all such products, from anti-cancer medicines to barbeque sauce or new energy drinks or skin whitening soap, etc. Commiserations. The number of products to be monitored and approved is directly proportional to their misery.

One option is to partner with private or civil society accreditation bodies, also industry associations, that will police their own ranks and disallow unsafe products from being manufactured and sold. This way, FDA can focus its resources and manpower on firms and products that are not covered by those private or civil society accreditation bodies and industry associations. Spot checks by FDA to these bodies, so that repeated cases of unsafe food and drugs being allowed will mean revocation or blacklisting of such bodies, and firms will have to go through the usual, stringent FDA approval process.

4.  Dr. Poch Soria:

PhilHealth is somehow a victim of its huge and monster existence, there is also monster expectations, monster disappointment by the public. The more they promise to do something or correct past inadequacies, the more expectations and even more loopholes that will be introduced.

Their data that of the 315 govt hospitals they surveyed (42 DOH hospitals + PGH, and 273 LGU hospitals), only 7% complied with the no balance billing (NBB) for indigent patients. 93% of them required out of pocket (OOP) spending by the poor. This shows that often, government is a big violator of its own rules.

PhilHealth then should learn to step back on certain promises, reduce the expectations. One area is on NCDs (non communicable diseases) patients. Someone with communicable disease like dengue is easy to treat, after the disease is killed, a patient won't go back to the hospital for several/many years. Compare that to a hypertension or other adult NCD patient, who will be patient for the next 10, 20 years or more. Can drain the reserves.

Stem Cell 2: Comments from My Physician Friends

After posting in my facebook status the PhilStar article re DOH Sec. Ona’s proposal that PhilHealth will soon cover stem cell treatment (SCT), several physician friends commented, below. The images I got from the web, I just added them here.

(1) From Doc Ethel:

It infuriates me Nonoy. Patients should not be made to undergo treatment that has not been proven to be safe and effective. And to pay for that is nothing less than unethical, bordering on malpractice. –

(2) From Doc Tony:

Soon every doctor will buy ADI stem machine with rebates and referral system will be in place creating a huge pyramid scam - medical tourism type concept. Why would past PMA leaders band together and risk their image ( ???$? ) and engage the doh secretary. This is to lend credibility to the PSSCM grand plan. FDA has been used too.

Philhealth will be used here. After August 31 deadline, SCT will go big time. With skin regeneration given FDA approval based on FDA new set of guidelines, our kasam Bahay s have plans of having SCT ahead of us.

Philhealth money will be squandered for SCT rather than for building hospitals in the country side , salaries of healthcare professionals, research, PGH renovation, improvement of Fabella hospital, Jose Reyes Hosp, renovation of the dilapidated FDA office in Alabang the only eye sore in posh Alabang area. The stem cell centers in manila will be magnet for more tourists - it's fun in the Philippines. Great plan.

(3) From Doc Jed:

Noy, it seems that the article merely shows that the Secretary is friendly to local stem cell therapy practitioners and that specific supplier of stem cell activator equipment.

Having stem cell therapy covered by Philhealth cannot be done unless it is of proven efficacy for treatment. Our present coverage at thus time is even focused on therapeutic and not on preventive healthcare.

(4) From Doc Donn:

Sec Ona did not say na standard of care ang stem cell. he said that sct is innovative therapy. kaya ung about philhealth, it will happen decades from now when sct is already accepted as standard of care. Until that happens, philhealth will not cover it. the sct issue is being muddled by bogus claims but we must also recognize that there are scts that show promise for certain indications. Still, scts are innovative therapies rather than standard of care. 

(5) From Doc Tony:

Donm. I have respect for sec Ike. But kindly advise him to extricate from PSSCM. He's being used and people will never stop speculating about the motive. I am getting frustrated seeing sin tax gains for Philhealth will go to unproven treatment. I have gone around the country and I have been receiving a lot gory stories about stem cell practice. We don't want this to happen to our healthcare.

(6) From Doc Jed:

Nonoy, I think the preventive aspects would better be addressed by other agencies of the national and local governments. PHILHEALTH being an insurance organization merely provides a form of health care financing. It bases it's health related expenses on statistics and claims management experiences.

I agree that scientific collaborative effort is necessary and such is undertaken in the private sector. Sadly, more often than not, there are always, though subtle, commercial undertones. Not that the commerce aspect is evil in itself, but to cite a quote, "temper their greed".

(7) From Doc Meo:

This is what happens when a clinician with limited administrative and executive experience becomes DOH secretary. It seems to me that Dr. Ona is still having a hard time dissociating himself from his practice. I fully understand his excitement over the progress in stem cell research. I myself am also very enthusiastic about its possibilities. However, Sec. Ona should refrain from making irresponsible statements. He must always keep in mind that he represents a national office. As such, he must be clear if a statement is his personal opinion or an official stand. For example, in the statement, "“Our dream is that when this type of therapy already has a standard of care, its cost will definitely go down. By then, hopefully, (PhilHealth) can offer it already” who exactly was he referring to with the pronoun "OUR"?

Stem Cell 1: PhilHealth to Cover SCT?

I was following the stem cell treatment (SCT) controversy in the Philippines recently.  The Philippine Medical Association (PMA) and the Philippine Society of Stem Cell Medicine (PSSCM), both headed by Dr. Leo Olarte, vs the 21 other specialized medical societies. The former group says stem cell treatment can cure many diseases, the latter camp says it is not true, that stem cell is proven only for bone marrow transplant and blood-related cancer, I think, and that stem cell in other diseases are still under clinical trials.

But one problem came up when DOH Secretary Enrique Ona has generally sided with the PMA-PSSCM camp and even castigated the 21 medical societies for questioning the latter. Sec. Ona is an Honorary Chairman of PSSCM.

Today, I posted this news story from the Philppine Star and posted in the MeTA Philippines email loop. The images I got from the web, I just added them here.

http://m.philstar.com/314191/show/9e9e9bca3e86ccb9a19ca1f3e38608c9/

By Mayen Jaymalin
 MANILA, Philippines - Ordinary people may eventually have the chance to undergo expensive stem cell therapy.  

Health Secretary Enrique Ona said the Department of Heath (DOH) is looking at the possibility of including stem cell therapy in the benefit packages of the Philippine Health Insurance Corp. (PhilHealth) if the medical sector accepted it as a standard care.  

“Our dream is that when this type of therapy already has a standard of care, its cost will definitely go down. By then, hopefully, (PhilHealth) can offer it already,” Ona said.            

He expressed belief that stem cell therapy has the potential to cure diseases such as cancer, autism, diabetes, stroke, liver disease, spinal cord injury, Alzheimer’s disease and Parkinson’s disease....

Stem cell treatment soon to be covered by PhilHealth? Even if it's still under clinical trials for many diseases? And such treatment is not cheap, many practitioners there charging 6 digits, even 7 digits for their rich patients.

If this will push through, ubusan ng pera yan. What's next, PhilHealth will raise the annual premium of members because funds are running out fast? 

If we want UHC, government, the DOH and LGUs in particular, should focus on primary healthcare, in fighting communicable and infectious diseases, and childhood diseases. If people want stem cell treatment and risk their lives and money for the promise of miracle, let them spend their own money, why drag along pooled fund, especially that people are forced, coerced and arm-twisted to contribute to that fund by law?

A lot of distortions in healthcare and other social issues are often initiated by the government itself.

I just hope that such PhilHealth plan will be junked. Or they want another public clamor against it, ala anti-pork barrel robbery movement?

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Three members of the Council commented:

(a) From Leonie Ocampo of PPhA:

How sad of our DOH to be supporting an initiative and/or treatment not proven by clinical trails yet, more so planning to even put this into the Philhealth benefit package. 

Philippines with its limited resources must FOCUS in the MUST DOs in health care delivery. A lot of problems from procurement, handling and storage, distribution, prescribing, dispensing, administration and monitoring of patients are still into a lot of problems and need government attention to manage and control with the right structure and processes; then here is the department tasks to put all of these in place going to something not proven yet . . wow, I could imagine how much of the people's money will be wasted again. 

Yes, I agree with you Noy, FOCUS should also be given first and foremost on primary health care . . . right structure, right processes, right people and the right resources identified and provided. Let's stop talk, talk and talk but let us start to act in the right direction, sa tuwid na daan. You know what I mean.

(b) From Doc K

Dear all, Doh did not say at anytime that phic will cover stem cell.  Sec Ona has not sided with any groups. Pls do not believe all newspaper reports. Ask why these misleading news are surfacing over the last month.

(c) From Doc Delen:

Dear Nonoy,

Very well said!!!  I totally agree with you!  Really, the priorities of this government is something that we should question.  They are not looking at the needs of the vast majority of the Filipino which can be easily addressed if we put our money on public health and primary health services.  Primary health care is an approach that is not being espoused by the DOH when in fact PHC continues to be the backbone of good health strategies.  Secretary Ona, whose experience is very hospital based, prioritizes tertiary care and hospital centered care which is more expensive.  Certainly, if the government's budget for health is directly given to primary care services, improving the local health center facilities and making health care, including medicines, more available and accessible, then we do not have to have Philhealth that still screens what can be supported or not.  People will now patronize the health centers and exercise their right to health.  This will improve their health seeking behavior and  know that they can avail of services immediately.  They need not wait for their condition to worsen, which is what is currently happening, necessitating a tertiary care consult.  Then, eventually, we can have more healthy people who can now be more productive and contribute more to the economy of the country (but of course there should also be concomitant changes in the economic and political spheres as in providing decent and justly paid jobs, humane housing conditions, good nutrition, good education, etc).

It is appalling that Secretary Ona can think of stem cell therapy first to be included in a Philhealth package before he thinks of improving our basic health care services.  Stem cell therapy is very new and still under study and we should not deceive the people and worse, make money from them as indeed this is a very expensive intervention.  And to use our people's money for this is truly something we should not allow!

Thanks Nonoy for your very good insights on this issue.

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See also:

UHC 18: DOH Budget, Healthcare Deregulation and PharmaWealth, August 08, 2013 

Drug Price Control 37: Four Years of the Policy, August 16, 2013

UHC 18: DOH Budget, Healthcare Deregulation and PharmaWealth

After I posted UHC 17: First, Second and Third Lines of UHC for the Poor in the Advisory Council loop last week, July 30, DOH USec Madz replied that DOH budget is presented as DOH proper which is smaller and DON family which is bigger because it includes the fund of National Nutrition Council, PoPCoM, corporate hospitals PHC,Lung Center and NKTI.

Leonie Ocampo of PPhA also replied,

Thanks Nonoy. I know it is not easy to be done, but if we want to be serious in looking after the health especially of the poor who can not afford to buy their medicines, ways to ensure they get the right medicines (quality, safety and efficacy assured) must be done. As I write this comment I know someone is dying because of;  

1. medicines taken are not the right medicines for the condition, in short NOT the best choice for the condition but given because it is what is available. 

2. medicines taken maybe are what are needed as determined by the doctor but the quality is questionable; counterfeit, substandard, fake, spurious and falsified but purchased by LGU or a government agency because they are the cheapest. ( price is not only the consideration in buying medicines anyway) 

3. medicines are right and chosen right but not used right because of lack, no or misinformation  given to the patient and . . .  many more reasons.  

RESULT : GAP between the clinically-tested effects of the medicines and the actual effects when used by the patient happen. Is this not a GOOD WASTAGE of the people's money?This is why the PPhA and I am supporting the DOH to really put its IRON HANDS on this.

I thanked USec Madz for her reply. I checked the DBM’s Budget of Expenditures and Sources of Financing (BESF) 2014, and here’s what I got.

Source: http://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2014/B12.pdf

So DOH’s regular plus special purpose funds was P51.05 billion in 2012, much larger than other DOH presentation saying they only have P42 billion last year. The infusion of P14 billion for PhilHealth last year, or one year before the elections this year, explained such huge jump in 2012 budget.

The combined regular fund + special purpose funds this year is P52.56 billion and P82.77 billion next year, or an increase of P30 billion over this year’s budget. That increase is huge, larger than the regular budget of the DENR (P23.7 billion this year and P23.91 billion next year) or DOJ (P10.9 billion this year and P11.6 billion next year).

The deregulation of health insurance that I mentioned in my earlier paper refers to allowing people to have health insurance  but it does not mean that it should be PhilHealth only. People, especially those in the formal sector, should have the freedom and choice to opt out or not contribute to PhilHealth if they wish to, so long as they get another health insurance provider – an NGO or corporate HMO, an LGU, a private health foundation, and so on..

I also thanked Leonie as her perspective as a pharmacist can inject new perspective, a wake up call for many sectors who only focus on "cheaper medicines" as the single most important consideration in incorporating government medicine procurement with UHC policy.

Also last week, July 29, I attended a forum on "Designing Competition Reforms in Developing Countries" at the Phil. Institute for Development Studies (PIDS), Makati. DOJ Assistant Secretary and a friend, Geronimo "Indian" Sy mentioned in his presentation that a local pharma owned by a Congressman is able to supply medicines to many government hospitals and there might be anti-competition acts there.

He did not stay long after his talk though. I spoke during the open forum and supplied the "missing info" referred to by ASec Sy. I said that it's PharmaWealth owned by the family of former Cong. Ferjenel Biron. I added that an anti-competition act is possible because as a Congressman approving, raising or reducing the budget of government hospitals and other agencies, the legislator has the advantage in "winning" a medicine supply contract with many DOH hospitals. I saw the data presented during a UHC forum at the AIM the week before that.  PharmaWealth can supply amlodipine 10mg for only P0.35 a tablet to some government hospitals, and sell at P2+ or P3+ per tablet to other government hospitals. 

UHC 17: First, Second and Third Lines of UHC for the Poor

Later today, I will attend a round table discussion on Health System Shapers (HSS), Patients and Consumers Sector, at the Department of Health (DOH) main office. The goal of this and related fora is to further fine tune the government’s universal health care (UHC) goal.

Last week, I also attended the two-days (July 25-26) “Policy Dialogue on UHC and Access to Medicines “ held at the Asian Institute of Management (AIM) in Makati. Here are two of the definitions or presentations about UHC.

This one is from DOH UnderSec. Madeleine “Madz” de Rosas Valera in her presentation, “The Philippine Response to Universal Healthcare and Access to Medicines 2013”. She added that UHC is one of four major social investments of the government to help the poor. The other three are public education, housing and conditional cash transfer (CCT).

And this one is from Dr. David Lee of Management Science for Health (MSH) in his presentation in the same forum last week, entitled “Medicines as Part of Universal Health Coverage: The Global Dialogue”

Pondering on UHC, I think the health sector already has among the monster budget in the country today. Consider the following:

1. Proposed DOH budget for 2014, P80.2 billion, from P50.5 B* this year and P34.0 B in 2012

http://www.dbm.gov.ph/wp-content/uploads/NEP2014/XIII/DOH.pdf

2. projected PhilHealth revenue 2014, about P80 B, from about P62 B this year and P47 B in 2012. (Revenues almost equal Benefits payment per year)

3. PGH budget, P2+ B, from P2 B this year

4. AFP hospital, P1.5 (?) B, from P1.3 B this year

5. PNP hospital, Veterans hospital, etc.

6. Other state universities' hospitals

7. PCSO, PAGCOR, SSS, GSIS, etc. health spending

9. Provincial, District, City, Municipal hospitals **

10. Provincial, City, Municipal, Barangay health centers

11. WHO, WB, ADB, UN agencies, multilateral grants

12. USAID, JICA, KOICA, CIDA, EU, etc. bilateral grants

* I saw the DOH presentation last year for its 2013 budget, they were spending on a P42B approved budget, now it has been revised to P34 B? What happened to the P8 B? Can an approved budget still be slashed? Weird… will ask around why.

** Total number as of 2013: (a) DOH hospitals 60, (b) LGU hospitals 584,

(c) Rural health units (RHUS) 1,285, and (d) Barangay health stations (BHS) 962. The nearly 600 LGU hospitals alone, I think they will have at least P50 billion budget next year.

Should be P300+ B next year alone? And that’s for government spending alone.

I am wondering if there was any study conducted by the UHC study group (UP Manila), Health Policy Development Program (HPDP, UPSE + UP Manila + other colleges?) or other groups, detailing how much really is spent by the public sector alone yearly, on healthcare?

It seems none, except that every year, there is belief that there is  "not enough money, give more money, raise more money, to public health."

Meanwhile, there are various private and civil society spending on health charities. PHAP Foundation gives about P100+ M a year , Unilab another P100M? other PCPI-affiliated pharma. Zuellig Foundation, Rotary Foundation, GMA Kapuso foundation, ABS-CBN foundation, St. Lukes Foundation, MMC Foundation, etc.

I think ALL foundations and private charity organization have health spending in one way or another. Plus extra spending during calamities, like individuals donating money or medical products and devices.

So we are talking of possibly P500+ billion health spending in one year alone?

And many people still think that health spending is still "not enough". hmmmm...

The first line of UHC for the poor are the RHUs, BHS, and LGU hospitals. The second line will be the DOH hospitals, Philippine General Hospital (PGH), other state universities’ hospitals, AFP hospital, other departments’ health facilities. Plus the charity emergency/wards of private hospitals. That is for outpatient services (have fever, or headache, stomach ache, then go home after consultation) and wards in case of confinement.

PhilHealth should be considered as a third line in UHC of the poor. Yet PhilHealth is the main discussion point when people talk about UHC.

PhilHealth is NOT a healthcare provider, unlike those RHUs, BHS, LGU hospitals. PhilHealth is only a health financier, for those who are hospitalized, and assuming that they were not technically disqualified, say they forgot to pay the premium last month or a few months back. Or they are unmarried couple.

So the focus on expanding PhilHealth coverage may be a secondary consideration compared to improving the healthcare delivery of those RHUs, BHSs and LGU hospitals.

As an advocate of minimal government involvement, in healthcare in this case, I maintain that PhilHealth membership should not be made mandatory and obligatory for all people. What should be made mandatory is that all people, children especially, should have health insurance – whether from private charity organizations and foundations, or private HMOs, or some health NGOs, or LGU schemes and hospitals, or from PhilHealth.

UHC 16: Dialogue on UHC and Medicine Access, AIM July 25-26

The Department of Health (DOH), Philippine Health Insurance Corporation (PHIC or PhilHealth), FDA and the AIM Dr. Stephen Zuellig Center for Asian Business Transformation (AIM ZCABT) will hold a policy dialogue tomorrow and on Friday, on “Universal Health Care and Access to Medicine” at the Asian Institute of Management (AIM), Makati City.

I received the invite only today when the DOH National Center for Pharmaceutical Access and Management (NCPAM) extended the invite to all members of the DOH Advisory Council for the Implementation of RA 9502 (Cheaper Medicines Law of 2008). Thanks to Mhyanne Dioso, the chief “workhose” of NCPAM for the Advisory Council, aside from NCPAM Director, Doc Virgie Ala.

The main objective of the seminar is “to identify the gaps and solutions in ensuring universal access to medicines in the Philippines” and hence, contribute to attaining universal health care (UHC) or Kalusugan Pangkalahatan.

The DOH’s budget has been rising big time in recent years: from only P18.9 billion in 2008, marginally rising to P23.7 billion in 2009 and P24.6 billion in 2010. When the PNoy Aquino government came, the DOH budget jumped to P31.8 billion in 2011, P42.1 billion in 2012, to P52 billion this year. Next year, the DBM-approved budget that was sent to Congress is P87 billion, or a P35 billion jump over this year’s budget.

A big portion of such huge jump in the proposed spending next year will be used to cover more poor households in PhilHealth insurance system, as the President said in his State of the Nation Address (SONA) last Monday. And medicine procurement by DOH hospitals and other agencies will likely get a big boost too.

Please note that public health spending in this country does not only come from the DOH. There are also the LGUs through their provincial, city and district hospitals, provincial and city/municipal/barangay health centers. Then other government agencies like the AFP Hospital, Veterans (under the DND) hospital, PNP Hospital, UP-PGH, PCSO ambulances and health charities, and so on. And almost all departments and agencies have their own in-house clinics for the healthcare of their employees and their dependents. There is huge public spending in healthcare and many people do not realize it, so they ask for more subsidies through the DOH and PhilHealth.

Back to the forum tomorrow. Among the speakers will be DOH Secretary Enrique T. Ona, DOH UnderSec. Madeleine “Madz” Valera, PhilHealth President and CEO Alexander “Alex” Padilla, FDA Dir.- General Kenneth Hartigan-Go, and Mr. Deejay Sanqui of IMS Health.

I hope that Sec. Ona will give an overview of the big DOH budget next year seeking approval by Congress. It seems that the “creeping re-centralization” of healthcare is no longer creeping but already hopping. Healthcare is among those functions by the national government that were devolved and decentralized to the LGUs under the Local Government Code of 1991.

I also hope that PhilHealth President Alex will not announce another round of hike in annual premium, especially for those in the formal sector. PhilHealth hiked plans to hike the premium from 2.5 to 3.0 percent of the basic salary of those working in the formal sector just a few years ago. The premium of OFWs has been raised from P900 to P1,200 per year and the sponsored program, the poor, from P1,200 to P2,400 per year, but the poor do not pay this amount, the LGUs and/or the DOH do.

My advocacy for minimal government in healthcare does not include healthcare for pediatric diseases and infectious diseases for both children and adults. I support further DOH and LGUs spending for these two types of diseases. But I do not support more government subsidy for NCDs for adults. If people have money to buy lots of fatty/salty food and drinks, lots of alcohol and tobacco products, or nice flat tv and DVD players and become couched potatoes, and they become sickly later, they should also have the money to buy private health insurance to augment their PhilHealth insurance. To say that they have no money for their own healthcare while they can spend for those food, drinks and smoking, is simply “palusot” and must be checked.

PhilHealth I think, should prioritize issuing automatic membership card for all poor children, say 6 years old and below. If DOH and LGU resources cannot support automatic coverage for older children and parents from poor households, then other agencies like DSWD, PCSO, UP PGH, private charities and foundations can come in. But usually LGU hospitals provide universal coverage for their local residents, young and old alike.

Tomorrow afternoon panel discussion will be on “Innovating and Improving Access to Medicine via Good Governance” with Tarlac Gov. Victor Yap, Gov. Alfonso B. Umali, Jr. of ULAP, Ms. Esther Go of Medilink, and Dr. Peter Glen Chua of FDA as speakers.

The role of LGUs is important in this aspect as lots of waste if not corruption in medicine procurement and distribution happen at the LGUs level. Many LGUs do not have the proper training and expertise in the proper storage and dispensation of medicines given free to their local residents.  

On Day 2, July 26, there will be a panel discussion on “4Ps of Financing Pharmaceuticals”: Rational Pricing, Tailored Procurement, Strategic Purchasing, and Risk Pooling, with four speakers:

Dr. Melissa Guerrero of DOH-NCPAM, Mr. Bienvenido Bautista of PITC Pharma, Inc., Dr. Dennis Ross-Degnan of Harvard Medical School, and Dir. Carlos Da Silva of AHMOPI.

NCPAM has a big budget for medicine procurement for “drugs entitlement” on certain diseases like breast cancer. PITC Pharma is the state’s chief drug importer and wholesaler for the various DOH-sponsored Botika ng Bayan, Botika ng Barangay, and other DOH agencies.

I am curious about the lectures on various topics like the ASEAN Pharma Harmonization, Anti-Microbial Resistance (AMR), Drug Price Referencing, PPP to Improve Access to Medicine, and PHIC and PCB 2. The  speakers will be Ms. Joyce Cirunay of FDA, Dir. Virginia Ala of DOH-NCPAM, Mr. Alex Haasis of NCPAM, Dr. Anthony Faraon of Improving Access to Medicine Project, and Dr. Francisco Soria of PHIC.

We shall have an ASEAN Economic Community (AEC) in 2015 or less than two years from now. The ASEAN Free Trade Area (AFTA) will mature, meaning zero tariff for all imports from any ASEAN member-countries, except perhaps for poorer economies Myanmar, Cambodia and Laos who might slap import tariff on some imported products from other ASEAN countries.

Singapore is the regional headquarter of many innovator pharma companies, not only because it is a regional financial center at par with Hong Kong, but also it strictly respects IPR like patent and trademark. Thus, IPR-busting policies like compulsory licensing of new and patented medicines, and drug price control are not done there. An ASEAN harmonization plan will consider this disparity in IPR and drug pricing policy. Many ASEAN countries like the Philippines, Thailand, Indonesia, Malaysia and Vietnam have laws allowing CL or similar schemes, and drug price control policy. Singapore does not have such policies.

Another learning experience for me in the next two days in health economics and public policy.

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See also:

Socialized Healthcare 12: Nurses, Doctors and Other Resources, March 03, 2013

Socialized Healthcare 13: On Inequality and Inclusive Business in HC, March 19, 2012  

Socialized Healthcare 14: Over-extending Government Role in Health, May 22, 2013 

UHC 15: On DOH Plan to Recentralize Healthcare, June 27, 2013

Drug Price Control 36: Advisory Council, James Auste and China

Another long article as a result of some exchanges we have in our discussion within the Coalition for Health Advocacy and Transparency (CHAT) googlegroups. This is four pages long, enjoy.

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After my reply to James Auste of the Cancer Warriors Foundation (CWF), contained in Drug Price Control 32: Policeman of Pharma Companies (June 04, 2013), then Drug Price Control 35: DOH Procurement Price and Lobbying for Another Price Coercion (June 29, 2013), James replied early this week.

He said that Unilab (while the biggest pharma company in the Philippines) and other local pharma, are not asking for a price increase of their products.

MALAKI MAN ANG KITA BUMABALIK SA LOCAL ECONOMY! SA INTERNATIONAL PHARMA SA KANILANG HEAD OFFICE SA IBANG BANSA  PUMUPUNTA ANG KANILANG PINAG KAKAKITAAN SA PASYENTENG PINOY!(HAVE DATA TO SHOW)  

KAYA CONGRATULATIONS SA LOCAL PHARMA! AT SERBISYONG TOTOO! PARA SA PILIPINO! CONGRATULATIONS SA UNILAB PASCUAL PHAREX  ATBP NA PATIENT FIRST BEFORE PROFIT! 

I replied that Unilab, Pharex, Pascual Lab, etc. were all affected by price control. That is why not one, not one, local pharma supported price control. Their prices are pulled downwards even if such prices are already low.

I remember from key leaders of local pharma, saying that some small local firms went bankrupt after price control, they could not bring down further their prices as these were already low due to competition among many players. Past President of the Philippine Chamber of Pharmaceutical Industry (PCPI), Edward Isaac, said in one  Advisory Council meeting that, 

This is the first time that we are united with PHAP in opposing a government policy. Before, it was easy for us to take a position. Kung saan sila, doon kami sa kabilang side. But this time, we are one with them in opposing price control.

James countered that the issue is the request by international pharma for a price increase, at least back to their levels before price control was imposed in mid-August 2009. And that there should be more  transparency in the health sector, that those multinational companies should open their financial statements (as submitted to SEC).

I think there are probably 200+ pharma companies in the country: PHAP members + PCPI members + non-members of the two federations.

The CWF data refers to the "top 25" taxpayers (in 2011 or 2012). But at the bottom of those 200+ pharma companies, these are the ones that can easily lose revenues and profitability in events of large price shocks, like the price control policy, and are likely to go bankrupt.

This situation can be illustrated by this hypothetical scatter plot below. Each point represents profit rate of each player. I made this illustration myself.

Before price control, companies have wide price ranges and hence, have wide range of profit margins among themselves for a particular drug molecule,. There is competition among them say in the 100-200 percent profit rate per tablet, another set of competition in the 50-99 percent profit rate, in the 5-49 percent margin.

After price control, the upper ranges were abolished and players have to adjust at lower profit rates, affecting everyone else. Those that used to make 10 percent profit rate must deal with just five percent and those that used to have net income of just 5 percent or less will suffer a loss, be in the negative territory. Some of these players may be able to float for sometime while others will simply have to close shop.