Drug Price Control 40: CWF Wants Price Dictatorship for Lipitor

Last Wednesday, an email from James Auste (below), founder and Executive Director of Cancer Warriors Foundation (CWF) was forwarded by email by the Secretary General MeTA Philippines, Ms. Cecile Sison, to members of the Medicines Transparency Alliance (MeTA) PH, Coalition for Health Advocacy and Transparency (CHAT), ETHIKOS and Alternative Budget Initiative (ABI) Health cluster. I am a member of MeTA PH and CHAT so I saw it.

The email therefore was widely circulated to many stakeholders in the PH health sector – government, industry players, NGOs, academe. James is asking for  another round  of drug price dictatorship aka price control. Price dictatorship is the  subject  of my book in 2011, Health Choices and Responsibilities, and it is a policy that I will  always oppose.

James addressed his letter to the President/CEO of Pfizer, but it was distributed to various network in the  health sector, so  it is implicit that he also addressed it to us, hoping that other stakeholders in the health sector will support his call for a new round of drug price control, but targeted to only one medicine, Lipitor.

I posted these comments by email to members of CHAT and MeTA PH early today. Reposting it here.

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James  wrote,

(1) “SABI NG MGA BATA,HINDI KAMI HUMIHINGI NG AMING GAMOT PERO PARA SA AMING MGA LOLO AT LOLANA GUMAGAMIT NG LIPITOR!”

O, this  is new. The children cancer patients are now lobbying part time not to get cheaper cancer medicines for themselves,, but to get cheaper Lipitor for their grandparents. And soon maybe, they will also lobby for cheaper Norvasc for their parents, cheaper Augmentin for their older siblings and relatives?

(2) ANG ANNUAL SALES NG LI[PITOR AY 750MILLION PESOS! NUMBER 1 IN THE MARKET! AT NUMBER 1 PA ATA SA BUONG MUNDO!

Good data, but Pfizer themselves gave this data to James? Or IMS did, or someone who dislikes Pfizer and has access to industry data did?

(3) “PARA general health and well-being of every Filipino ( NA CORE VALUE RIN NG PFIZER) IBABA NATIN SA 14 PESOS ANG 10MG AT 17 PESOS ANG 2OMG!”

O, part 2 of price control. Part 1 was made in August 2009 under the administration of former President Arroyo.  Price control  is price dictatorship. Government regulators – the DOH and DTI in particular, backed up by the Office of the President, Congress, LGUs, etc. – would act as the price dictators. Those who will not obey the dictated price will be harassed and penalized.

Btway, it was former DOH Secretary Duque and DTI Secretary Favila who coined the Gloria Macapagal Arroyo Price (GMAP), aka Government-Mediated Access Price, an illegal term (not in RA 9502, not in the IRR) which until now  is being used, four years after GMA’s term has ended.

I am not exactly a great fan of Pfizer. I am more a fan of “boycott medicines”, innovator or generic, whenever possible and have healthy lifestyle instead. But I will  always be an enemy of government  dictatorship including price control, wage control, fare  control, rent  control, income control (via high income taxes).

The call for another round of drug price control or price dictatorship  is lousy James. Better focus your energy on lobbying for cheaper childhood cancer medicines. You are more effective there.

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DEAR SIR/MAM PRESIDENT/CEO OF PFIZER!

HI AT MABUHAY! I AM JAMES AUSTE A BRAIN CANCER WARRIOR! PATIENT ADVOCATE! FOUNDER! EXECUTIVE DIRECTOR OF THE CANCER WARRIORS FOUNDATION! SINCE JUNE 2000 WE HAVE SUPPORTED AT LEAST 1000 KIDS WITH  CANCER AND THEIR FAMILIES IN THEIR BATTLE FOR LIFE! RIGHT NOW WE HAVE 400 SCHOLARS UNDER OUR CARE FROM PAMPANGA TO DAVAO!

SABI NG MGA BATA,HINDI KAMI HUMIHINGI NG AMING GAMOT PERO PARA SA AMING MGA LOLO AT LOLANA GUMAGAMIT NG LIPITOR!

SABI RAW NI LOLA AT LOLA NIYA 34 PESOS ATA SA MERCURY! ANG 10MG! 39PESOS ANG 20MG! DAHIL SA MDRP(MAXIMUM DRUG RETAIL PROGRAM) NUNG 2009! ANG DATA NATIN  NA NAHANAP NAKITA AT NABASA NG ATING SENIOR WARRIORS

 ANG ANNUAL SALES NG LI[PITOR AY 750MILLION PESOS! NUMBER 1 IN THE MARKET! AT NUMBER 1 PA ATA SA BUONG MUNDO!

MAM SIR BAKA PASOK NA SA ATING CORE VALUE NA MAXIMIZE REVENUES AND MANAGE COSTS! ANG REVENUE NA ITO

PARA general health and well-being of every Filipino ( NA CORE VALUE RIN NG PFIZER) IBABA NATIN SA 14 PESOS ANG 10MG AT 17 PESOS ANG 2OMG!

BAKIT GANUN KABABA DAHIL SA MASIGASIG NA PANANALIKSIK NG ATING SENIOR WARRIORS MAY BAGO RAW TAYONG GAMOT NA TAWAG AY Rhea GALING DAW SA AMERIKA!

PERO SAME DRUGSTORE MAGBEBENTA--MERCURY DRUG STORE-NUMBER 1 SA PINAS

SAME MANUFACTURER--PFIZER

SAME ADDRESS--KM 1.9 ROAD 689, VEGA BAJA, PUERTO RICO USA

SAME PACKER-PFIZER MANUFACTURING DEUTSCHLAND GMBH, BETRIEBSSATTE, FREIBURG MOOSWALDALLEE1, FREIBURG, GERMANY

SAME IMPORTER-PFIZER,INC- 23RD FL, AYALA LIFE-FGU CENTER, 6811 AYALA AVENUE, MAKATI CITY

SAME SA SUKAT, KULAY, AT PAREHO PA ANG MARKING NA PO156

PAREHO LAHAT PERO ANG PANG PINAG KAIBA AY 20 PESOS SA 10MG! 60% CHEAPER NG LIPITOR! ANG 20MG 55% CHEAPER!

MALIIT SA INYO PERO MALAKI SA MGA MAY SAKIT NG PUSO NA ARAW ARAW ANG GAMIT NG GAMOT NA ITO

MALIIT SA INYO PERO MARAMING MATUTULONG SA ATING SENIORS AT MAY PANG JEEP PEDICAB, O MRT PAPUNTA SA MERCURY!

MALIIT SA INYO PERO MARAMING MABUBUHAY SA BENTE PESOS

SABI NG ATING SENIOR WARRIORS LIPITOR ANG GUSTO NAMIN KESA RHEA KASI BAKA

IBA ANG TAMA SA AMING MGA PUSO

IBA ANG  TAMA SA AMING MGA KATAWAN

IBA ANG AMING PATUTUTUNGUHAN

KAYA ANG AMING PANAWAGAN  SA PAMAHALAAN SIR MAM SANA I SUPPORT NIYO AY PAG ARALAN ANG SECTION 5 EO821 ".... MEDICINES,,, SHALL BE REVIEWED AFTER 3 -6 MONTHS BY THE DOH"KASI 5 YEARS NA PALA ANG MDRP! AT WALANG PANG NAG RE REQUEST NG REVIEW!

PANAHON NA PARA BIGYAN NG PANSIN ANG  ISA PANG HINAING(BUKOD SA CHILDHOOD CANCER) SA ATING LIPUNAN NA WALA PANG PUMAPANSIN ANG HINAING NG ATING MGA LOLO AT LOLA! NA KAILANGAN NG LIPITORFOR LIFE!

                                           KONTING SAKRIPISYO MARAMING MAGBEBENIPISYO!

THANK YOU FOR YOUR TIME!  WILL BE HOPING AND PRAYING FOR A POSITIVE RESPONSE!

INGAT GODBLESS!

JAMES AUSTE

BRAIN CANCER WARRIOR

PATIENT ADVOCATE

FOUNDER ONLY MEMBER OF CANCER WARRIORS SENIORS TEAM!SAMA NA!

**THIS WILL BE THE FIRST PROJECT OF THE CWF SENIORS TEAM!

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See also: 

Drug Price Control 36: Advisory Council, James Auste and China, July 12, 2013 

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

Drug Price Control 38: Presentation at USC, Cebu, March 2010, March 01, 2014 

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

ETHIKOS 2: Pharma Companies and Patients, April 01, 2014

UHC 24: Corruption in Government Purchase of Medicines, April 02, 2014

PWD Discount 1: Who are Persons with Disability?

In a complaint email last Tuesday by James Auste, head of the Cancer Warriors Foundation (CWF), why Mercury Drugstore did not give sell him his medicines for more than one month, he was answered by Atty. Edsel Manuel of Mercury. The latter gave me permission to blog his comments, thanks Atty. Manuel.

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Is one suffering from Chronic Illness a Disabled person? This has been discussed with the National Council for Disability Affairs (NCDA) 2 years ago and was answered in the negative.

First, Republic Act 9442, amending RA 7277, the Magna Carta for disabled persons, provides that the 20% discount for the purchase of medicine shall be for the exclusive use and emjoyment of persons with disability, thus:

CHAPTER 8. Other Privileges and Incentives

“SEC. 32. Persons with disability shall be entitled to the following:

(c) At least twenty percent (20%) discount for the purchase of medicines in all drugstores for the exclusive use or enjoyment of persons with disability;”

Second, the Implementing Rules and Regulations of RA 9442 states that the granting of said 20% discount is subject to the guidelines of the Department of Health (DOH), thus:

“IRR OF REPUBLIC ACT NO. 9442,

6.1.d Purchase of Medicine – at least twenty percent (20%) discount on the purchase of medicine for the exclusive use and enjoyment of persons with disability. All drug stores, hospital, pharmacies, clinics and other similar establishments selling medicines are required to provide at least twenty percent (20%) discount subject to the guidelines issued by DOH and PHILHEALTH.”

Third, the DOH-Administrative Order No. 2009-0011 has made clear in its “Rationale” and in the “Definition of Terms,” particularly on the “Disability Types,”  the phrase “Chronic Illnesses with Disabilities” or “disability due to chronic illness,” thus:

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.

Drug Price Control 35: DOH Procurement Price and Lobbying for Another Price Coercion

Government price control is price dictatorship. It is wrong, messy and ugly.

Explore new data below, 2,500+ words, nine pages long including seven tables and one graph, get your favorite drinks and enjoy the ride.

Price comparison across countries of certain goods and services is useful both for public and private decision making, provided that people are using the appropriate and verifiable conversion factors. Otherwise, the comparison can only lead to confusion, not education, and can lead to wrong public policy formulation.

After my reply to the email of James Auste, head of the Cancer Warriors Foundation (CWF), to all members of the DOH Advisory Council on the Implementation of RA 9502 (Cheaper Medicines Law of 2008), see Drug Price Control 32: Policeman of Pharma Companies, Dr. Melissa Guerrero of NCPAM-DOH iinformed me that prices of anti-cancer drugs in the Philippines remain expensive and out of reach of many Filipinos and offered to show the data. I was happy for her offer, and after several emails, she sent me the data. Posting these with her permission, as they plan to post this also in the DOH website, for transparency purposes. Thanks a lot for the data, Doc Melissa.

Tables 1 to 4. DOH Purchase Price Index (PPI), Selected Medicines, 2009-2013, in Pesos

Of the 10 drugs shown above, there is a notable increase in the PPI from 2009-2010 for all except #s 2, 3 and 10. No price change from 2010 to 2012 for all except #7 (increase) and #10 (decrease). Then a declin in prices from 2012 to 2013 for all except #8. The change in prices were mainly due to the change in the name of supplier or trader.

Here are the other 11 drugs.

Price movement from 2009-2010, increase except #s 13, 14,16,  18, 20, 21, which retained their prices or declined (#16). From 2010-2012, prices have generally remained the same except #s 11 and 12 which declined. And from 2012-2013, price declines except # 16 (same price) and 18 (increased).

Before I show the price comparison of the above medicines among the Philippines, Thailand and India, I warned readers in my previous article that there is No Single National Price for most if not all commodities like medicines in a particular country. There are many sellers catering to particular customers and buyers and thus, have different prices for the same product made by the same manufacturer.

Consider these two graphs below for a particular medicine. Equilibrium points (where supply meets or intersects demand) A and B are prices in the pharmacies of the high end hospitals in Metro Manila like Makati Med and St. Lukes; C and D are prices for cheaper hospitals; E and F are prices for the big drugstores like Mercury and Rose or Watsons, G and H are for The Generics, Generika, and points I, J, K and so on are prices of the smaller drugstores.

Thus, one can make a table of price differences not only between the Philippines and Country B or Country C, but also among different drug outlets and retailers within the Philippines. There is NO national price for a particular commodity in one country. Only the price of the biggest retailer or second or third biggest retailer, as proxy or estimate of the prevailing price in a country at a given point in time.

So for inter-country price comparison to become meaningful and verifiable, I suggested that  one 

must show, or at least consider and mention the following:

(a) same or comparable retail outlet, say only from Watsons;

(b) same reference period, say June 15, 2013;

(c) exchange rate used for converting different currencies into a common currency on a particular day, say as of June 15, 2013;

(d) taxes and fees, national and local, applied on medicines;

(e) subsidies or mandatory discount, if any, applied on medicines;

(f) other factors.

When those verifiable factors are not shown or even considered, then the price comparison becomes less effective as the readers would only blame the country with the higher price, especially the drug manufacturers and/or drugstores.

It is possible that drug manufacturers and pharmacies in country A would have higher profit margin than those in countries B and C, even if they have lower retail prices than their counterparts in B and C.

How? When the government in country A (a) does not impose taxes on medicines, (b) has lower corporate income tax and other business taxes than in countries B and C, (c) directly subsidizes a particular medicine so that it can be sold at a lower price, (d) other factors.

With that caution, here now are the price comparison for the Philippines, Thailand and India, for the 21 medicines purchased by the DOH. The current market price for the Philippines referred here is the price of Mercury Drugstore (it corners about 60 percent of the total retail pharma market in the Philippines) and an undisclosed "big private hospital". 

Drug Price Control 32: Policeman of Pharma Companies

This coming June 18 afternoon, the DOH Advisory Council (AC) for the Implementation of RA 9502 (Cheaper Medicines Law of 2008) will hold its 17^th meeting. The Council has been meeting since 2009 and has conducted 16 meetings so. I am one of the AC members and have joined the meetings since its 4^th or 5^th meeting in June 2009. Below, a photo during the 16th meeting last February14, 2013.

The DOH’ National Center for Pharmaceutical Access and Management (NCPAM) is providing technical and secretariat support to the AC, headed by DOH UnderSecretary Madeleine “Madz” Valera. The DOH has its own set of agenda for discussion and consultation with AC members, but it is also soliciting items for discussion from AC members, any issue they wish to be discussed and clarified at the meeting. This is a good and healthy process.

One AC member, James Auste, the Executive Director of the Cancer Warriors Foundation (CWF) and brain cancer survivor, is suggesting that the drug price control, officially called Maximum Retail Price (MRP) in the law, be expanded to cover more medicines.

In an email to all AC members, he wrote,

“IN BEHALF OF THE MILLION FILIPINOS WHO ARE SICK AND DYING DAHIL MATAAS ANG PRESYO NG GAMOT AT DI NILA MA AFFORD"

"M-ajor                             M-ajor (wala pa rin patient org rep bukod sa CWF)

D-ecision that will              D-ecisions that needs a

R-ock the                          R-eport to the

P-ilipino Patient                 P-ilipino Population”

That MDRP should increase not the price but the list of medicines  He also requested that pharmaceutical companies should submit (to him or the AC?) a “detailed SEC-approved financial report for the past five years, so that they can study if those pharma companies’ income has declined or not because of the MRP policy, as he sees that in the Top 500 companies, almost all respected companies are included.

They also want to see (a) shipment cost if imported, (b) customs duties if paid, (c) storage cost if under Zuellig, (d) delivery cost from Zuellic to pharmacies and drugstores, and (e) administrative cost.

Wow. The CWF wants to be sort of a policeman of pharma companies. And it is not clear if they wish to be that copper even for local and generic pharma companies. That "MDRP" by the way is an illegal term coined by former DOH Secretary Francisco Duque and Malacanang under former President Gloria Arroyo. The original provision in RA 9502 is MRP but Malacanang did not like it to mean "Mar Roxas for President" then so they invented MDRP.

Besides, it is preposterous for someone to claim that he or she can speak "in behalf of the millions of Filipinos who are sick and dying". Have the sick and dying organized themselves into a national organization and they elected a leader to speak in behalf of them? There is no such thing or organization or leader.

I replied to him in the AC email loop, ie cc’d all other members, that what he is suggesting is to go back to the old debate where no one in the AC except him supports a lousy drug price control aka MRP policy. So many AC meetings in the past have been held where  the subject was discussed, where people from the national and generic pharma companies, the Philippine Chamber of Pharmaceutical Industry or PCPI (Joey Ochave, Past Presidents Edward Isaac then Beau Agana), Philippine Pharmacists Association (PPhA, President Leonie Ocampo), Watsons (Lyle Morrel and Bell Pesayco), Pharmaceutical and Healthcare Association of the Philippines (PHAP, Exec. Director Reiner Gloor, Director Art Catli), Drug Stores Association of the Philippines (DSAP, Past Presidents Jo Inocencio, Celia Carlos) and other groups have spoken with only one message -- drug price control policy is wrong. That medicine prices were coming down even before the policy was imposed because of the rising competition among more players with more products introduced. 

I told him that by continuously insisting on this lousy policy, either he was absent or he was not listening and closing his ears in those meetings.  So I gave an unsolicited advice, the CWF should produce a study, even elementary study, comparing prices of certain anti-cancer drugs, say from 2005 to 2013, and show that their prices are indeed NOT falling. Show the numbers, show charts, so that their arguments will have more substance and not hollow.

The AC meeting on June 18 is their chance to show those numbers and charts. I am sure that NCPAM will grant them several minutes to present their paper and numbers, to convince the AC members that drug price control is not an idiotic policy  The AC is a place for dialogue and debate if necessary, not a place for sloganeering and flag waving.  

I will be there on June 18 meeting. I hope that James can produce and present even a basic study.

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See also:
Drug Price Control 29: MRP Attempt Over Anti-Leptospirosis Drug, August 16, 2012
Fat-Free Econ 22: Three Years of Drug Price Control Policy, August 30, 2012 
Drug Price Control 30: Reversing the Policy on AC Resolution in 2009, September 14, 2012 
Drug Price Control 31: Cancer Drugs and CWF, December 01, 2012

Drug Price Control 31: Cancer Drugs and CWF

Among the members of the DOH Advisory Council (AC) on the Implementation of RA 9502 (Cheaper Medicines Law of 2008), and in our civil society health network Coalition for Health Advocacy and Transparency (CHAT), there is only one NGO leader who persists on lobbying for continued drug price control, the leader and founder of the Cancer Warriors Foundation (CWF), James Auste.

I can understand James' main concern, to save the lives of more and more children with cancer, and it is a noble goal. I myself have two young kids, aged only 6+ and 2+ years old. If anyone of them will get sick, I immediately become troubled but I try to stay calm as their illness are often not serious -- not dengue or similar fatal diseases. So I share with his concern.

But the means that he often advocates -- using politics and more government coercion -- is something that I definitely do not share with. Just three days ago, he posted in the Advisory Council members' email loop and said,

AMING PROPOSAL--TO EXPAND THE MDRP O MRP TO INCLUDE MIRACLE DRUGS LIKE TEMODAL NA EXORBITANTLY UN ACCEPTABLE UNCONSIENCABLE PRICED SA PINAS! ( CAN PROVIDE DATA FOR OTHER DISEASES)

TO SUGGEST AN AMENDMENT SA  CHEAPER MEDS LAW TO INCLUDE BRAIN CANCER! KASI ANG SURVIVAL RATE AY NASA 10%! DAHIL LANG DI MA ACCES ANG GAMOT! 

I replied to the email loop and argued this way:

Lousy argument James.

First you said "miracle drugs" meaning you recognize that no other drugs before were miraculous enough to cure patients, so they die more quickly.

Then you demonize those miracle drugs as if wishing that they were not invented, or were not brought to the Philippines in the first place.

It is possible that there are other anti-cancer drugs more "miraculous" than Temodal that are available in other countries abroad but not available here, precisely because the politics of envy is strong here, of wanting but demonizing revolutionary drugs.

Even local generic manufacturers like Unilab or Pharex who have the capacity to mass manufacture generics of off-patent medicines may shy away from doing so. At P100 per tablet of innovator drugs, the local generics can produce and sell at P50 or P55 and both camps will have their own markets and buyers. With MRP and drug price control, the local generics would find that they are now the expensive seller, so they have to push their prices further down, assuming there is enough leeway, or abandon selling such, even temporarily.

MRP and price control is killing competition. Where there is little or no competition, an economy can easily degenerate to socialism. See if healthcare is fantastic in socialist North Korea, Vietnam or China. But one problem with wishing for health socialism is that even socialist Vietnam and China now allows more players, allows more capitalism and the profit system, even at a limited scale.

Do not demonize the guys that give patients more modern treatment that improve their chances of survival. Demonize instead the taxation of medicines, demonize the absence of competition, demonize socialism.

Another member of the AC, the President of the Philippine Pharmacists Association (PPhA), Ms. Leonila "Leonie" Ocampo also replied.

Dear All,

I hope we wont be like Canada that because of Price regulation, many Anti cancer drugs are no longer available that they have to import these from the U.S. and Europe; in effect cost became higher. This is one concern being tackled in the global organization of Pharmacists (FIP) ; the Pharmacists being one key player in making the medicines available to the public.

Other means to lower cost, subsidy or whatever may that be could be the option to be used.

Again, the primary beneficiaries in the current price-regulation initiative  are the people who have the money to buy, but those who do not have continue not being able to access the essential medicines they need.   

Let us all be realistic. Let us also all work . . . that  practices in the use of medicines will be corrected, from procurement down to patient monitoring. Optimum benefits are NOT experienced by the patients because they get not only non-quality medicines but also non-quality services. Let us work together that GAPS existing now between the potential effects(efficacy) of medicines versus the actual effects(effectiveness) experienced by the patients will be closed to allow OPTIMUM OUTCOMES to happen. Many factors are to be looked into, in this situation and I am asking your support to PPhA for its programs addressing this issue with the ultimate end in mind . . . OPTIMIZE HEALTH OUTCOMES OF PATIENTS USING MEDICINES.

We remain, not in favor with price regulation. There are many options for cost-effective medications. We only need the more relevant policies and their right enforcement.

It's good that Leonie shared her observation about the case of Canada. Goivernment price dictatorship via price control simply did not work and will not work, if their goal is to allow more poor people to have access to more life saving medicines.
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See also:
Drug Price Control 27: Letter to Sen. Pia Cayetano, May 15, 2012
Drug Price Control 28: On Cong. Biron and Sen. Villar Bills, July 14, 2012
Drug Price Control 29: MRP Attempt Over Anti-Leptospirosis Drug, August 16, 2012
Fat-Free Econ 22: Three Years of Drug Price Control Policy, August 30, 2012 
Drug Price Control 30: Reversing the Policy on AC Resolution in 2009, September 14, 2012

Health Spending 5: Raising DOH Budget for Childhood Cancer

A fellow member of our Coalition for Health Advocacy and Transparency (CHAT), James Auste, the head of the Cancer Warriors Foundation (CWF) has lobbied other CHAT members and CWF supporters, to lobby and write the Senators to demand:

1. Increase DOH budget for Acute Lymphocotic Leukemia (ALL) patient assistance program from P30 million to P100 million, to cover some 3,500 kids with cancer will be given proper care and treatment.

2. Increase DOH budget for non-communicable diseases (NCDs) from P70 million to P280 million for four
diseases: cardiovascular, lung cancer, diabetes,...

I replied that I support more government funding for (a) pediatric diseases, including NCDs for children like childhood cancer, (b) infectious or communicable diseases like leptospirosis, dengue and malaria, (c) people with physical and mental problems, both children and adults.

But I do not support more government funding for NCDs for adults. Why should the rest of society pay for diseases of people who over-eat, over-smoke, over-drink, over-sit? Lifestyle is a choice, not inherited.

Legislators, Congressmen/women and Senators, receive all types of higher budget request from:

(a) Departments and other Agencies themselves which suffer budgetary cut at the Department of Budget and Management (DBM).

(b) NGOs, media, other civil society groups lobbying for additional budget for their respective sectors (ie, health NGOs asking for higher DOH budget, education NGOs asking for higher DepEd and SUCs budget, etc.).

(c) Rent-seekers and contractors lobbying for bigger budget of agencies that will get their services (ie, suppliers of jet fighters and battle ships seeking higher DND budget, road contractors seeking higher DPWH budget, etc.),

(d) Foreign aid or multilateral bodies like the WB and ADB pushing for new loans that will require local counterpart funding.

(e) Other sectors and interest groups.

One will hear all types of justifications and even alibi from these sectors, interest groups and lobbyists. They know that they are indirectly competing with each other as taxpayers' money is not a bottomless pit, so some tend to shout or lobby louder than the others.

But legislators are also under pressure where to get the additional funding other than the usual, never say die "more borrowings, more borrowings, more borrowings". The annual budget deficit (expenditures larger than revenues) is around P300 billion a year, and that is also the similar amount of new borrowings each year. Our public debt has become so huge that we pay about P350 billion a year on average on interest payment alone. Utang lang ng utang, let the future administrations and taxpayers worry about those debts later.

So legislators would tend to ask, "kindly help us identify where to get the additional money and we will give your request." Good. And here are possible sources of additional money for one's favored sector or department.

1. Higher rates for existing taxes and fees, like the proposed increase in excise tax for tobacco and alcohol products, higher excise tax for mining revenues, etc. Or a proposal to hike VAT from 12 to 15 percent. Or DFA hike in passport fee, NBI hike in NBI clearance fee, DOTC hike in motor vehicle registration tax, etc.

2. New taxes and fees, say an excise tax on junk food and bottled water (now more expensive than oil).

Please note that those taxes and fees refer only to national government agencies. The local government units (LGUs) can also increase their respective taxes and fees, like the community residence tax, real property tax, business permit tax, etc. They can also create new taxes like the proposed dog ownership tax in Pasay or Paranaque, or increase penalties like penalty for dog shit on the streets, penalties for men who walk topless on the streets, etc.

3. Privatization, like privatizing PAGCOR, some military facilities or camps, some state universities, etc.

4. Shrink the budget of other agencies and rechannel the savings to one's favorite sector or department.

If one will go for option #1 like the proposed sin tax hike, malabo na, not practical. So many sectors are already salivating at the huge money that will come from it -- the universal healthcare (UHC) of PhilHealth and DOH, the condoms and pills of the RH bill, the pork barrel of legislators themselves, etc.

If option #2, it is a highly sensitive issue and next year being an election year, politicians would rather borrow like crazy than create new taxes that can spell defeat for them at the precincts.

If option #3, I myself will go for it. Prioritize PAGCOR privatization, I think up to P200 billion can be realized from it. There is a bill by Sen. Ralph Rector on this, but I think it's not moving fast enough.

If option #4, I will also support it myself. My favorite is to drastically cut the budget of the Department of National Defense (DND)-AFP. I am actually in favor of abolishing the AFP itself as I believe we have no threat of external aggression in the sense that foreign armies will invade Metro Manila and the rest of the country. The bigger threat here is internal -- those thieves and carnappers, killers and murderers, kidnappers and rapists, extortionists and terrorists, corrupt officials and plunderers, many other criminals. The noise over the WPS/SCS is hyped mainly by the rent seekers and suppliers of jet fighters and battle ships, some legislators and the DND guys themselves. I read that one battle ship from Italy will cost about P6 billion each, and the DND plans to buy two ships soon. Not included there are bombs, missiles, ammunitions, training of personnel, oil consumption, replacement of parts, that will cost several billions more.

The Philippine Military Academy (PMA) should be privatized. Our subsidy for those guys is P500,000 per student per year, or P2 million per student over four years. The same with the National Defense College of the Philippines (NDCP), which has a subsidy of about P1 million per student, and those masteral "students" are not exactly poor.  They are mid-level or senior level government officials, congressmen, governors, mayors, etc.

So if people have to write to those Senators and Congressmen, their request will have a better chance of being granted if they can pinpoint where to get new money or savings.

My suggestion, go for option #4. Target the DND, or the state universities and colleges (SUCs), or DPWH.

Then over the next few years, target option #3.
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See also:
Health Spending 1: Wastes in US health spending, June 23, 2011
Health Spendng 2: DOH, Public Health Budget, June 18, 2012
Health Spending 3: Obamacare and Huge Tax Hikes, June 30, 2012
Health Spending 4: Global Aid on Health, 1990-2011, August 28, 2012