Drug Price Control 34: No Single National Price, And a Wailing Cat

Among the reasons often cited why some groups propose government price control of certain commodities is that the local price of the same product by the same manufacturer is higher compared to other countries in the developing world. The assumption is that since it is (a) same product (b) made by the same manufacturer, then the price should be generally the same.

This assumption is intrinsically wrong because it assumes that there is only one price in one country or city for each product that satisfies (a) and (b) conditions above.  For instance, the price of a can of coca cola 350 ml should be the same for the entire country.

This is terribly wrong. The price of that (a) same Coke 350 ml in can (b) made by the same manufacturer is different when bought in different retail outlets: a sari-sari store, carinderia, average resto, 7-11, Mini-Stop, SM, Rustans, Robinsons, Shangrila, Manila Hotel, Mandarin Hotel, and so on. There is no single price to represent the “national price” of that can of soda, or any other commodity. This can be said in another country with generally higher or lower price levels as the Philippines. This point can be represented by these graphs.

Each equilibrium price or intersection between supply and demand represents the prevailing price in each outlet. There are sellers and buyers in each equilibrium point. There is no single price, but different prices by different sellers for different consumers, for each country.

When the Senate in the 14^th Congress (2007-2010) reported out Committee Report No. 6 made by three Committees -- Trade and Commerce, Health and Demography, Finance – dated October 01, 2007, before the Cheaper Medicines bill became a law (RA 9502 in June 2008), among the reasons cited is this table showing how expensive the prices of (a) same medicines (b) made by the same manufacturers in the Philippines were compared to those in India and Pakistan.

As in the example of coke above, there can never be one price of particular medicine in one country. If one will buy say, Ponstan 500 mg by Pfizer in different drugstores and pharmacies – Mercury, Watsons, Rose, The Generics, Generika, Manson, Dr.  Pharmacy, Botika ng Bayan, Makati Med, St. Lukes, Asian Hospital, Capitol Medical, etc. – one will get different prices. So  what is the “national price” that can represent the price of that drug in the Philippines? None. And yet the Committee Report has assumed there is such a thing for each country. 

If one will highlight the idea that Philippine drug prices are “among the highest, if not the highest” in SouthEast and East Asia, one will pick up the highest price, say from Makati Medical Center’s pharmacy or St. Lukes Hospital pharmacy as the “national price.” If one will highlight the idea that local drug prices are “comparable if not lower than those in SE and East Asia”, one will pick up the price of The Generics or smaller, non-chain drugstores.

Besides, if one will make a meaningful price comparison of a particular commodity by country, then one must show:

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

(b) same reference period, say December 30, 2012;

(c) exchange rate used for converting different currencies into a common currency, say PhP or US$, on a particular day, say as of end-December 30, 2012

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

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

(f) other factors.

These data and numbers should be shown for verification by third-party players or the public in general.  It is possible that the list of drugs mentioned in the Committee Report were those that are price-controlled (hence, priced very low) in India. Otherwise, anyone can produce a table of comparative prices, make agitating title and spread it around to achieve a particular political and business agenda.Take this second table for instance. 

What are the difference/s and similarity/ies of the two tables above?

The difference is that the price gap between those in the Philippines and those in India and Pakistan are not that big.

The similarities are  that both tables  (a) assume there is one “national price” for each drug molecule by the same manufacturer, and (b) they do not show how the figures were arrived at. 

The second table of course is hypothetical -- readers should not use it. I posted it simply to illustrate the point that unless the supporting data are shown and verified to be true as basis for comparison, people, policy makers and legislators especially, should be wary of accepting those numbers as basis for making public policies.

Meanwhile, the cat in my previous posting, Drug Price Control 33: Debate with a Cat has gone ballistic and really emotional, fuming with personal attacks. Well, low minds can stoop low and do ad hominems as replacement for producing hard data. Among the cat’s words are

It would seem that the THINK TANKER has crossed the LINE... You're into "name-calling", now just so you can DIVERT the discussions from REAL ISSUES and go into the realm of PERSONALITY ATTACKS...? Alright, I'll play this game...

My profile picture is a CAT, yes.. A beautiful cat from Siam whilst your FACE looks like that of a WORN OUT "INTELLECTUAL WANNABE..." After all these years trying to make your own mark in the Policy Circles, you have not ACHIEVED anything SUBSTANTIAL you can call your OWN... 

Awww! Well, for someone who supports drug price control or other statist proposals, the simple path would have been to show numbers and data – Prices of drugs (or other commodities) have not gone down, say from the time the law was enacted in 2008, to 2012. Show the charts, show the tables. Like this,

Then the debate is on the issue and not on ad hominem stupidity.

Pointless to debate with low level minds who cannot focus on substance, who cannot produce verifiable numbers, only  kilometric brickbats.

She made this warning,

“Mind you, I'm an expert when it comes to NAME-CALLING and PERSONALITY ATTACKS, you might cry if you ENGAGE ME...”

Ouch. Mark Twain's advice is worth noting.

Visit this blog from time to time, Kinse. I might revisit some of your other comments.

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See also:
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 32: Policeman of Pharma Companies, June 04, 2013
Drug Price Control 33: Debate with a Cat, June 15, 2013

Drug Price Control 33: Debate with a Cat

When some people’s ego  is bruised, they tend to take revenge. And if that requires abandoning a previous advocacy, say from anti-statist interventionism and move to the opposite, statist and socialist, they will do it.

My blog post,  Drug Price Control 32: Policeman of Pharma Companies, about my reply to a demand for another round of price control by the head of the Cancer Warriors Foundation (CWF) here in Manila, was posted yesterday in the facebook group,  Imperium et Populi (Philippines), to be countered and debated by the fb group owner, Kensi Blye-Two.

Until last week, this person – don’t know if a he or she, I think a she – took an anti-statist interventionism (trying hard free marketer?) position. In my previous long debate with her (or him),  Business Bureaucracy 8: Exchanges at Imperium et Populi (Philippines), she wrote,

This would BOIL DOWN again to "EASE of DOING BUSINESS..." The SMALL PEOPLE are HEAVILY TAXED but the BIG COMPANIES can get away with almost anything...
Imagine this:

( 1 ) Corporate Tax 30%
( 2 ) VAT 12%
( 3 ) Withholding Tax
( 4 ) Business Permit from the LGU
( 5 ) BOC - Duties and Taxes for Imported Goods
( 6 ) Other Taxes from other Agencies...
What's left of the MICRO and SMALL Enterprises...?

That’s an anti-statist, anti-bureaucratism position, right? Cool.

Then in attacking my paper on drug price control, she wrote,

If you have read RA 9502 which I'm sure you have... There's a certain provision that says:  

SEC. 17. Drugs and Medicines Price Regulation Authority of the President of the Philippines…. 

These said PROVISIONS have already given the LEGAL FRAMEWORK to NO LESS than the President the POWER to IMPOST MRP to ANY and ALL "DRUGS" and "MEDICINES..." This itself would mean one thing- DRUG PRICE CONTROL...

Now she is pro-state intervention, justifying government price control and politicized price-setting.

That’s a 180 degrees turn around. Mental inconsistency, intellectual dishonesty, plain brickbats to have a revenge, any of these can possibly explain the behavior.

I checked the fb profile of this person…  

A cat! I was debating with a half human, half feline entity J Kidding aside, this person has no real name, no photo, no affiliation, no school, nothing. This is a perfect formula for people who appear “brave” and utter almost anything, but are cowards that their words and ideas will be associated with their faces and names.

Anyway, below are Kensi’s rapid-fire-revenge attempts, my brief rejoinder to her comments and questions, then another round of insecure brickbats.   Copy-pasting everything so readers can see the kind of mentality this cat or person has. Seven pages long, almost 3,000 words including this intro, get your fave drinks and enjoy the ride.

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Kensi Blye-Two   "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." (Noynoy Oplas) 

http://funwithgovernment.blogspot.com/2013/06/drug-price-control-32-policeman-of.html

( 1 ) Has the term "MDRP" been DECLARED "ILLEGAL" by any competent Court...? Has EO 821 (Executive 821) been REVOKED...? Has AO 2011-0012 (Administrative Order 2011-0012) been AMENDED or REVOKED...?

( 2 ) And where did you get this RUMOR or GOSSIP that the ONLY REASON the MRP was changed into MDRP by the former Administration was mainly due to the fact that it could be used by Mar Roxas (which eventually RAN for Vice President)...? Can you show some PROOF or EVIDENCE to support your claim...?

"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."

( 1 ) Did you CLARIFY whether he wanted all the DETAILS and INFO for ALL MEDICINES or perhaps for certain Medicines that their GROUP are eyeing...?

( 2 ) I think that you KNOW or UNDERSTAND the REALITIES that beset a lot of Filipinos when it comes to ACCESSIBILITY to MEDICINES... Are you "DENYING" that FACT that a lot of Filipinos who are SICK and DYING just because they can't buy MEDICINE...? Do clarify...

( 3 ) Whether the INTENTIONS or Mr. Auste is GOOD or BAD, he has introduced REALITIES that needs to be ADDRESSED immediately and these are LEGITIMATE ISSUES... Now, would you HELP the Filipino SICK and DYING or you would stick to your "brand of bureaucratic maneuverings...?"

Business Bureaucracy 8: Exchanges at Imperium et Populi (Philippines)

A friend, Rev. Ruel Chavez, posted my article from the lobbyist.biz dated January 23, 2013, Personal and economic freedom, Philippines and rest of the world, in one of his facebook groups, Imperium et Populi (Philippines) (Government and People, Philippines) last Saturday, June 8, 2013.

There were several comments and exchanges among members. Some members requested Ruel to bring me into the group so I can reply to their questions and additional comments. I was added (I seldom join discussion groups in facebook as my fb wall and that of my friends’ are already my discussion platforms, usually I am added by some friends) yesterday.

Below are the relevant exchanges. There were other minor comments and digressions, but I won’t include them here. This is long already, six pages, 2,400+ words. So get your coffee or soda and enjoy the ride. I am also posting the two tables in that article for additional guidance to the exchange. Despite our debate, I am happy that Kensi gave me implicit permission to blog this exchange. Enjoy!

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Ruel Chavez "The bad news is that economic freedom remains rather restricted in the country until now. The local and national governments here tend to think that entrepreneurship and job creation is a potentially criminal thing to do, so they imposed plenty of business permits, taxes and fees, that sap significant time and resources of entrepreneurs and investors. This is on top of a very protectionist Constitution that prevents foreign competition to many local business elites and oligarchies." - Nonoy Oplas

http://thelobbyist.biz/index.php/perspectives/less-government/item/146-personal-and-economic-freedom-philippines-and-rest-of-the-world

Kensi Blye-Two This would BOIL DOWN again to "EASE of DOING BUSINESS..." The SMALL PEOPLE are HEAVILY TAXED but the BIG COMPANIES can get away with almost anything...

Imagine this:

( 1 ) Corporate Tax 30%
( 2 ) VAT 12%
( 3 ) Withholding Tax
( 4 ) Business Permit from the LGU
( 5 ) BOC - Duties and Taxes for Imported Goods
( 6 ) Other Taxes from other Agencies...

What's left of the MICRO and SMALL Enterprises...?

Ruel Chavez Meron naman daw 2 good news base sa report...1. mas mataas ang ating personal at economic freedom kung ihahambing sa maraming mga bansa at 2. at mas mataas din ang ating personal freedom kung ihahambing sa mga karatig bansa sa asya tulad ng Singapore, Malaysia, Indonesia, India and China. Vietnam, Laos at Cambodia...

Kensi Blye-Two Ruel Chavez: FREEDOM is very important, yes... However, you can have FREEDOM and yet DIRT POOR, what would happen to you...? Singaporeans and Malaysians RETIRE Millionaires...

In Indonesia, India, and China, Vietnam- citizens are going up the ladder and there's a significant burgeoning sector... Well, we can say that we're on par with Laos and Cambodia in terms of FIGHTING POVERTY...

Ruel Chavez actually, yan din ang tanong ko...matanong ko nga yong nagsulat ng article na yan kung ano ang isasagot...

Ruel Chavez Sorry Kensi, matagal yong response ng sumulat ng article...only this morning at pasensiya medyo strong yong dating niya...this is his reply:

"It is obvious that you just open your mouth without reading what you are commenting on. Check again Table 2 of that article, Singapore has very high economic freedom than the Philippines, 2nd to HK worldwide. So more economic freedom, more prosperity. Philippines which has more business bureaucracies (about 16 procedures just to start a business vs. only 4-5 in HK and Sing.) has more poverty. Malaysia has about similar econ freedom score as the Philippines.

"What the article discussed is the Index of Human Freedom, which is composite of economic freedom + personal freedom. In Singapore for instance, one can criticize the government in private occasions, say within dinner table, but not in the newspaper, not in rallies of even 10 people, not in blogs, not in public seminars, not in public concerts, so many NOs and prohibitions. Besides, it is one (pol) party system there. The same in Malaysia where almost all the TV stations, almost all newspapers, radios, are owned by the government. They held several elections, only the last one, the 13th General Elections (GE 13) that there was a credible political opposition to challenge the administration for the first time ever, and the opposition was clubbed with various cheating.

"Freedom means absence of coercion. But freedom is not absolute, one cannot stab or shoot people simply because he does not like their faces, so such freedom to harm other people is restricted and prohibited. So freedom means people can do whatever they want, except harming other people. When government puts up various bureaucracies and imposes various taxes, fees, penalties and mandatory contributions if people would put up a barber shop or bread shop or clothes retail shop as if entrepreneurship is a criminal thing to do, then that is restricting freedom."

Kensi Blye-Two Ruel Chavez: Perhaps you can INVITE the Author in here so that he can further ENLIGHTEN us with his Article... We might even learn a thing or two from him...

Here' my reply to his comment: