Drug Price Control 41: Exchanges with Joey Ochave at MeTA PH

After my  discussion on CWF Wants Price Dictatorship for Lipitor, Joey Ochave, SVP of Unilab and Vice-Chairman of MeTA Philippines, reacted to it. We have a nice, friendly and civil discourse and mini-debate the past two days. The other members of MeTA PH (80+ people in the email loop) expressed satisfaction reading our exchanges. Copy-pasting them below raw, zero alteration even comma. Later, another friend, Karen Villanueva joined. Karen is from Merck and also MeTA PH member. Both Joey and Karen gave me permission to use their comments for this blog post.

The two tables below are not part of the original exchanges. I made them and inserted them here as additional background info about the price control or mandatory, forcible 50 percent price cut policy in August 2009. This is about 3,200 words,  six pages long including the two tables. Enjoy.

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I never thought I would say this – I agree with Nonoy. (Biro lang, Nonoy.) Price control is not the answer. It is not a sustainable policy instrument to address issues relating to access.

If I remember correctly, there was a preliminary study done before on the impact of the 2009 MDRP (or MRP, if one is to follow the text of the Cheaper Medicines Law). It showed that the ones who benefited most from the 50% price reduction were those who were buying the “originator” medicines and not the poor who were its intended beneficiaries. The poor, after all, were getting free medicines from the government or already using generic equivalents. (I do not, however, discount the possibility that there were some poor people who having been prescribed the originator brands never used generics and thus were able to benefit from the MDRP. I would assume though that their numbers were not significant.) Hence, if the policy objective is to provide access to the poor, then price control is not the answer. (I just learned from former UP College of Pharmacy Dean Yollie Robles that  she just completed a similar study. It would be good if she could share it with META.)

Further, the situation now is much different from that in 2009. Competition in the pharma sector has flourished since then. Filipino patients have more choices now than before, with several brands at different price points for every non-patent protected molecule. Since 2009, generic drugstores have thrived due to the successful marketing programs of TGP and Generika. Even Watsons has seen it fit to introduce now its Watsons Generics brand, with all the marketing gloss that one would previously associate only with “branded” medicines. More importantly, the government put in more money for medicines, with the latest figures showing a 40% increase in budget. Many expect this to grow further as Universal Healthcare becomes a reality. After oncology and kidney transplant medicines, I understand that PhilHealth is interested in covering also out-patient medicines for diabetes and hypertension. They have an existing pilot program with a generic drugstore that they might scale up soon. Hence, while access to essential medicines is still an issue, there are already several successful initiatives to address it since 2009.

On Pfizer’s differential pricing scheme, this is nothing new. This is standard practice after patent expiry. Companies will have different prices for different geographical markets. This is why, for example, the price in Thailand for the same product by the same company may be lower than in the US. What is new now is that differential pricing is being done within a single country. In the Philippines, this has been made possible because of the Certificate of Listing of Identical Drug Product (CLIDP) scheme of FDA, which allows a manufacturer to provide several marketing companies a “daughter CPR” from its Principal (“mother”) CPR. This means that two or more marketing companies can source a drug from a single manufacturer, and each one is free to price it depending on its cost structure and intended market.  As anyone in the pharmaceutical sector knows, medicines are priced depending on what the company thinks the “market” will accept. The definition of “market” depends on the population segment the company wants to serve. If SEC (socio-economic class) AB, then one would expect a company to price it higher than another company which wants to serve the SEC D market. Theoretically, a company may choose to cater to both the SEC AB and SEC D using identical products, except for the packaging and the go-to-market strategy. There are many reasons why a company may want to do this – for CSR purposes, to have a flanking brand, to protect its market share, or as a product life cycle management strategy, among others. Each company will have its own reasons.

On the GMAP, it is actually a voluntary price reduction by selected companies in response to the government’s request. There is nothing illegal in it, Nonoy. In truth, almost all molecules (except for one) covered by the Executive Order imposing MDRP are Pfizer products, for reasons all of us know. Atorvastatin (LIPITOR) is one of them. This means that the current LIPITOR price is already 50% lower than its pre-MDRP price. If indeed, Pfizer is supplying Rhea an atorvastatin product that is identical (same manufacturer, same shape and color of tablet) to LIPITOR and it is 40-60% cheaper than the current post-MDRP LIPITOR price, then we should welcome this. Doctors and patients (who continue to prescribe or buy LIPITOR despite the presence of its generic equivalents) may be advised to shift to Rhea Atorvastatin so they can save.  (I bought samples over the weekend, and what James says is true. LIPITOR and Rhea atorvastatin are identical.) Kung ayaw ng RiteMed o Pharex (okay ba, Beau?), then LIPITOR users can shift to Rhea Atorvastatin. Switch and save, sabi nga ng Watsons Generics. Rhea, by the way, is only available in MDC.

I was told that Pfizer is also supplying Rhea Mefenamic Acid. I checked this over the weekend, and it’s true. Totoo nga, parehong-pareho. Same manufacturer, same color and shape of tablet as PONSTAN. The only difference is the price – PhP 3.90 for Rhea Mefenamic Acid and PhP 31.25 for PONSTAN, or almost 10x the Rhea price. This is even bigger than the Rhea atorvastatin savings. Remember Sec. Pagdanganan during the Cheaper Medicines Law campaign? Remember when he was comparing the PONSTAN prices in the Philippines and India and wondered aloud why the big difference? J

While I disagree with James on the price control proposal, we should nevertheless thank him for his continuing advocacy of patients’ right and welfare. C’mon, none of us in this email loop has done more individually for patients than James has. He was an influential voice during the Cheaper Meds campaign and he was instrumental in persuading PhilHealth to cover out-patient oncology medicines, especially for childhood leukemia. At the last META Board meeting, we noted the continuing absence of patient organizations (except the Psoriasis group now) in META. Until now, the access campaign in the Philippines has largely excluded patient groups. Maybe it’s because patients’ hands are already full coping with their condition and they find tiring the endless discussions/arguments that we have. However, if we are to have meaningful changes in the healthcare system, the voices of the patients have to be given primacy. It is a real issue for them, life and death, not a theoretical one as it is to some of us. Kaya James, saludo kami sa iyo. Yes, kindly give the same passion you gave to Cancer Warriors to your advocacy for Lolo and Lola. Sadly, many of us are either compromised or do not have the courage to do that.

Hala, masyado nang mahaba itong email ko. Bottomline, I agree with Nonoy that price control is not the answer. Competition is. The fact that Pfizer is now in the generics arena through Rhea should be a cause for celebration. Now, the LIPITOR and PONSTAN prescribers or users who are not comfortable switching to existing generic brands will have the option of switching to Rhea. Trust me, parehong-pareho sila. This is what competition is all about.

-- Joey Ochave

Thanks Joey. I believe that majority of players and stakeholders in the PH health sector never support or advocate price control or price dictatorship. When the issue became sensationally hot in early to mid-2009, there was never a "health crisis" or emergency, only a political crisis for then Sen. Mar Roxas who was too desperate to raise his low ratings as a Presidential candidate.

Re studies about the impact of price control, it is in the law that the DOH should submit a report to Congress Oversight Committee on RA 9502 at least once a year, and submit a report to the President two times a year. I think this was never done by the DOH, or if ever it did so, those reports were never made publicly available, freely downloadable.

Leonie Ocampo of PPhA, Reiner Gloor of PHAP then, Beau Agana of PCPI, have made several presentations showing that (a) drug prices have been declining even before the 2009 price control because of growing competition among drug manufacturers and distributors, and (b) only the overall revenues of affected innovator companies were affected but volume wise, their sales have not significantly increased. Someone taking Norvasc 1 tablet a day against hypertension does not take 2 tablets a day simply because the price is cut by half. Ma-'undertension" na sya noon :-)

Price differentiation, market segmentation, is a natural thing to do for private enterprises. The prices of a can of Coke in a sari sari store, 7-11, Mini Stop, SM grocery, Rustan,s, Itallianis, Shangrila, Intercon, etc., can vary widely. Same product, same volume, same packaging, same manufacturer, and yet have different prices. Because they cater to different buyers and consumers. The same practice applies to a bottle of C2 or a piece of Toblerone.

A tablet of Norvasc or Biogesic can have different prices in Mercury, Watsons, TGP, Aling  Merced drugstore, etc because they have different cost structures. Aling Merced and other small drugstores rent a small space and pay little on space rental, have no air-con and pay little on electricity, have no full time pharmacist and pay smaller on manpower, etc.

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.

Free Trade 27: Proposed EU-PH FTA and TRIPS Plus

Free trade and intellectual property rights (IPR), these are among my favorite topics to discuss and debate. Here are my latest papers on these subjects,

Free Trade 26: "Buy Local" and Protectionism, June 24, 2012
On IPR Abolition 17: Copyright by a Government Corporation, September 02, 2012
IPR and Medicines 24: Balancing Costly Innovation and Cheaper Drugs, March 20, 2012

The Department of Trade and Industry (DTI) called for a public consultation on “One Country One Voice” (OVOC) regarding the proposed EU-Philippines Free Trade Agreement (FTA) on September 20, 2012. I read about the invitation last September 13 and quickly confirmed my attendance.

Fearing that such proposed FTA might contradict certain provisions of the Cheaper Medicines Law of 2008 or RA 9502, a joint statement was released by MeTA Philippines, Coalition for Health Advocacy and Transparency (CHAT), Ayos na Gamot sa Abot-kayang Presyo (AGAP) and the Fair Trade Alliance (FTA). Below are screen shots of portions of the eight-pages position paper. I checked the websites/blog of AGAP, FTA and MeTA, it’s not posted there.

Below are the exchanges we have the past few days. Copy-pasting them with no alteration, so pardon our French and whatever typo errors, just showing the raw exchanges. I am adding some photos of the event that day.

A bit long, about 17 pages including images/photos, so grab your favorite snacky and enjoy the ride.

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September 20-21, 2012:

Hi Pau,

I am sorry that I did not read the attached paper on the joint position of Meta-CHAT-FTA on this issue. I saw this during the MeTA meeting yesterday as Gov Obet presented this. I spoke and commented that the conclusions seem to be an over-reaction to the IPR issue on medicines. Why?

I am not a lawyer but my understanding is that a national legislation like RA 9502 which deals with amending the IP Code on medicines has supremacy over whatever treaty that the Senate and the Executive branch may enter into any country or block of countries. In this case, should it be true that the proposed EU-PH FTA will have provisions extending  patents of drugs, I don't think it will have supremacy over RA 9502 and hence, can not be implemented.

My feeling is that whatever TRIPS Plus provisions will apply to other sectors -- patents on softwares and cell phone applications, see the fight between Samsung and Apple for instance; copyrights on music and movies, see the rampant counterfeiting of DVDs, albums, etc.; or trademark infringement on the brand and logo of huge companies. I read in some newspapers how some individuals caught stealing and using the trademark of other companies so they can sell their copycats at high price. Even Kumon, the tutorial school, its logo and trademark is being stolen by some entities and they too teach "kumon education" and charge the same rate but pay zero royalties to the original brand, and their style may just be a bogus and inferior.

I still have to see the actual document, even in its draft form, of the proposed PH-EU FTA pertaining to medicines. As Daisy Cembrano of GSK said yesterday, after RA 9502, the innovator companies have practically ceded many of their IPRs in the country.

PH Pharmacists 5: PPhA Convention 2012, Day 2

Yesterday afternoon, I attended the 2nd day of the Philippine Pharmacists Association (PPhA) National Convention at the University of Santo Tomas (UST) in Manila. I skipped the morning session because I attended the "Online Onsite" program of interaksyon.com at the Enterprise Center, Ayala Avenue, Makati City. I spoke in an informal setting, about the conflict with China over Scarborough Shoal, the Spratly Islands, at the West Philippine Sea or South China Sea, and the interaksyon guys were tweeting my talk, feeding me questions from twitter and from other guys on the site which I also answered. Here's my presentation there,  http://interaksyon.com/assets/documents/interaksyon_online_onsite.pdfinteraksyon.com

Thus, I was not able to listen to the presentations of four good speakers like Dr. Lagrada of PhilHealth, Joey Ochave of UL, John Ware of WPPF, and Ms. Marilyn Tiu of the Board of Pharmacy.

I was not able to leave Makati early, I wanted to hear Dr. Midha's presentation about bioequivalence and related subjects. I came late, poor me. But I was able to hear the presentation by a good friend, John Chang, the President of FAPA, then by Leonie Ocampo.

John talked about the evolving roles of pharmacists: Traditionally from compounder (of drug molecules) to medicine selling/dispensing to counselling + information, to patient care and pharmaceutical care. This is a good evolution of roles. Towards the latter part of his talk, John showed a quote something like "There's no future in (medicine) dispensing, it can be done via the internet, by the machine, or hardly-trained personnel".

There is truth to this. Many pharmacies and drugstores -- especially those owned by the government (Botika ng Barangay or BnB, supported by the DOH), or private non-chain drugstores -- are manned by non-pharmacists, some even have zero formal training in pharmacy. They could be any political appointee by the Barangay or Village Chairman.

So it is possible that many pharmacists are over-educated (mind you, they have to pass a board and licensure exam by the government after hurdling 4 years of college education) if their work will just be limited or focused on drug dispensing and selling.

John also discussed about a debate in some countries where physicians complain or charge that "pharmacists act like physicians", and the reverse of the argument, that "physicians act like pharmacists." It's about the division of labor between the two on drug prescription vs. drug dispensing. John said that there should be complementarity of function between the two because the goal is the same -- patient care. Nice point there, John.

I don't have photo of John and Leonie during the convention, but I have one during the CGDA Conference in Taiwan last November. From left: Nancy Tacandong of FDA, John Chang, Leonie Ocampo, me and Joey Ochave.

The presentation by Leonie was good, lots of good data for the Philippines, like the following:

1. In community pharmacy, about 60 percent of the pharmacy business is controlled by the biggest chain with 800+ outlets nationwide. (That's Mercury, who else -- me)

2. About 40 percent of the business by 5,000+ outlets from different companies.
-- 70 percent of this 40 percent are from five chain pharmacies (That's Rose, Watsons, Med Express, The Generics, who's the 5th? -- me).
-- 30 percent of this 40 percent are from single branch pharmacy operations (The BnBs and Botika ng Bayan or BNB are not included in this 40 percent? -- me). The practice of pharmacy here is mainly dispensing, almost nothing else.

3. Hospital pharmacy constitutes 10 percent of the total pharmacy business. And this is dominated by 10 big hospitals (Makati Med, St. Lukes, Medical City, PGH,...)

Then Leonie discussed some unfavorable practices of the profession:

- Poor implementation of the "no prescription, no dispensing" rule;
- Poor storage of medicines practices,
- Medication counselling is not practiced;
- Sale of medicines unsupervised by trained pharmacists in non-traditional outlets (like those walking house to house carrying medicines in hand bags, selling drugs in public markets, etc. -- me)

She noted that "Pharmacists appear overeducated and underutilized". Thus, there is big role by the PPhA being the main (and only) professional association of Filipino pharmacists. PPhA is the umbrella organization of 10 affiliate organizations and 82 local and provincial chapters.

The various initiatives, projects and networking by PPhA were discussed by Leonie. I won't mention them here, I think her presentation will be made available in their website soon.

In relation to the top killer diseases in the Philippines and worldwide, about 2/3 are from non-communicable diseases (NCDs), medicine and lifestyle counselling will be an important role for pharmacists. What good are the most effective drugs made cheaper via drug price control and coercion policy, or even freely available via government of hospitals and assistance to the poor, if the patient will continue their unhealthy lifestyle like over-drinking, over-smoking, over-eating fatty and salty food, over-sitting and sedentary life?

Identification and monitoring of counterfeit and/or substandard drugs is also an important function for pharmacists. We ordinary folks will not be able to detect such, especially if we go to lesser known or even known for notoriety pharmacies, and worse from non-traditional outlets like "sari-sari" or variety stores, those sold on house to house marketing, etc.

Again, it is refreshing to hear that many of public health problems have private solutions, relying little or zero on politics and politicians. Health is mainly personal and parental + civil society responsibility.

* See also  PH Pharmacists 4: PPhA Convention 2012, Day 1, April 27, 2012