Showing posts with label NCPAM. Show all posts
Showing posts with label NCPAM. Show all posts

Wednesday, April 02, 2014

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….
----------

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.
--------

See also: 

Wednesday, July 24, 2013

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.
---------------

See also:

Saturday, June 29, 2013

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 CompaniesDr. 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". 

Monday, December 17, 2012

CSOs and State 16: The Integrity Initiative

Government is force and coercion. It is an institution created by men and women mainly to protect themselves, their families and friends, their properties, from bullies among the population. It was a good "social contract" where people surrender a portion of their individual freedom to the government, like the "freedom to revenge" and physically attack those who committed physical aggression against them and their properties. Government and its courts, justice and police system is supposed to do that job, to penalize those who disrespect other people's right to peaceful living.

But governments since then have been expanding and getting larger to monster institutions. Rule of law was supplanted by rule of men, and some bullies, thieves and other criminals have captured government power so they can become bigger bullies protected by the government itself and its armed forces. Corruption and plunder is among the byproducts of this situation. Another is large-scale human rights violations, imprisonment if not murder of those who protest dictatorial and despotic governments.

In order to minimize or avoid this situation, government itself created certain offices and mechanisms for self-policing and self-regulation. Thus, the separation of power among the Executive, Legislative and Judiciary branches of government, fiscal and oversight function of opposition political parties, and creation of anti-corruption Commissions, Bureaus or Task Forces within the government. But these offices did not do their function in many countries like the Philippines and thus, corruption has become the norm rather than the exception in many countries and governments. 

Non-government mechanisms and initiatives have sprang up recently in many countries like the Philippines, to help fight government corruption. The approach is different than the usual anti-corruption campaigns. Instead of pressuring government to limit corruption from within, the move is to pressure private enterprises and individuals to stop bribery with government offices and even to report corrupt and extortion practices by certain government officials.

This is the thrust of a new group called the Integrity Initiative (II). I have attended a talk by II Chairman, Ramon del Rosario of the Phinma Group of Companies last month. It was held at the Asian Institute of Management (AIM) in Makati and was mainly sponsored by the Pharmaceutical and Healthcare Association of the Philippines (PHAP) and its partner companies, NGOs and government offices like the DOH.. I liked his talk, short (15 minutes or less), extemporaneous and direct. He said that from an initial 100 company-signatories in 2010, II has grown to more than 1,500 signatory companies. They are now piloting two procedures. One is an Integrity Assessment where companies self-declare certain practices to avoid or minimize corruption with government, and two, an Integrity Validation to be done by a third party and check if those self declaration by a signatory company are correct or not.

During the open forum, I spoke and praised this initiative as truly civil society. It's a unilateral action by the private enterprises and groups themselves to start cleaning up their own ranks first, then demand that government should clean its ranks too. This will be a good branding for company-signatories and have obeyed the processes of II. Thus, II-affiliated companies can "brag" or openly declare that they are doing their businesses in transparent manner and comply with certain government regulations. This can be considered as a trademark by which other companies (suppliers and buyers) and ordinary consumers can hold on and expect that what those companies say are indeed true. A pressure from the outside by a united group of companies from different sectors or fields of business can exert substantial change in government.

I also suggested that while there are industry associations in each sector or industry, some of those associations do not have their own code of ethics and self-regulation mechanisms to avoid unethical marketing and advertising of their products and services and hence, cheat on their consumers. So II can possibly create committees to represent the different sectors and industries that can exert if not impose a code of ethics for member companies in each committee. 

I cited a story of an anesthesiologist friend who complained that they caught one local pharma who sold a counterfeit or substandard anesthesia to one hospital. An anesthesia, if in good standard and effective, is supposed to take effect within minutes to a patient. So for a patient to undergo surgery, he is supposed to feel numbed and be asleep within minutes before the knife will slice his/her tummy or other body parts. But the patient was wide awake, did not get numbed, and it is impossible to do the surgery otherwise the patient will be shouting in deep pain. So the surgeons and anesthesiologists have to scamper for a new set of anesthesia before the surgery can proceed. Surgery done. After that, they reported the incident to the FDA through a very confidential letter, and the pharma company later knew of such letter complaint, meaning they have a "mole" within the FDA and threatened to sue the complaining physicians. 

There were other comments from the audience like those from Leonie Ocampo of the Philippine Pharmacists Association (PPhA). Later, Doc Virgie Ala, the director of DOH-NCPAM, came to represent DOH Assistant Secretary Madz Valera who was supposed to give a talk too in that event, but was not able to come due to a sudden Senate Committee meeting that she has to attend. Doc Virgie expressed support for such civil society initiative like the II, as it would be easier for government offices to reduce corruption if there is such initiative from the private sector.

Civil society organizations (CSOs) and State, not just market and state, is a good initiative to limit government power and coercion. CSOs should be independent of government whenever possible, and not just extension of government like what many NGOs, media and academic people are doing. CSOs should be independent of government funding too, in order to ensure such organizational and philosophical independent from the state.

Meanwhile, PHAP Executive Director Reiner Gloor wrote about that event, I just saw it recently, paper elow. Photos here, he's rightmost. Doc Virgie Ala is to my left. Cecile Sison and former Gov. Obet Pagdanganan of MeTA Philippines, Leonie Ocampo to my right. Lower photos, Mon del Rosario of II and Phinma, and Doc Virgie Ala of DOH-NCPAM.


http://www.bworldonline.com/weekender/content.php?id=62191

The Integrity Pledge




Posted on 05:40 PM, November 29, 2012

Medicine Cabinet -- Reiner W. Gloor




IN 2003, world leaders adopted the United Nations Convention Against Corruption and designated Dec. 9 of each year as International Anti-Corruption Day in a bid to promote a culture that values ethical behavior.

Believing that corruption undermines social progress and results in inequality, the Aquino Administration adopted a platform of government that embraces integrity in public leadership. Early this month, President Benigno S. C. Aquino III. issued Proclamation 506 declaring Dec. 9 as National Anti-Corruption Day. In the proclamation he signed, the President said that corruption undermines the institutions and values of democracy and ethical values as well as jeopardizes sustainable development and the rule of law.

The drive to promote integrity has also been undertaken by the private sector recognizing that the government cannot do it alone. In response to the government’s campaign on good governance, the Makati Business Club (MBC), together with several other organizations, launched the Integrity Initiative (II), a multi-sectoral campaign that seeks to ultimately eradicate the corruption that has worsened poverty and stunted “the development of a competitive business environment that operates on a level playing field.”

Friday, September 14, 2012

Drug Price Control 30: Reversing the Policy on AC Resolution in 2009

There was another lively, good attendance meeting of the DOH Advisory Council on Healthcare (ACH) last  Wednesday, September 12, 2012. It is good that the meeting is now made regular, once a quarter or four times a year. Last Wednesday meeting was the third this year, including the emergency meeting last month, August 15. See my notes on the meeting that day, Drug Price Control 29: MRP Attempt Over Anti-Leptospirosis Drug.

Below, some photos of the meeting. Lower right photo is from an older AC meeting. I used it to fill up a space as I took only three photos last Wednesday :-)



There were seven items on the agenda:
1. Issues on the implementation of the Senior Citizens Discount (SCD), mandatory 20 percent discount
2. Implementation of the Electronic Drug Price Monitoring System (EDPMS)
3. Updates on the FDA Act
4. DOH position on the proposed amendments to RA 9502, namely the creation of a drug price regulations board (DPRB)
5. Organization and functions of the ACH
6. Complete Treat packs for outpatient care, and
7. Mechanisms to address request for price increase in drugs under MRP or drug price control.

From the above agenda, one can see that there are different types of drug price control, explicit and implicit, that are currently implemented. The explicit price controls are:
a. the existing 50 percent mandatory price cut for the 22 molecules as implemented since mid-August 2009.
b. the mandatory 20 percent discount for senior citizens (SC) and persons with disabilities (PWDs), but it's more with the SC.

The implicit control is done via price monitoring through the EDPMS. If the price of certain drugs in some pharmacies or drugstores is much higher compared to those in many other pharmacies, that will invite an inspection and monitoring by the DOH or the FDA. The bill on DPRB is not yet implemented, it functions only as a threat to various players in the pharma manufacturing, wholesaling and retailing businesses.

Right now there is a conflict among drug manufacturers, distributors, wholesalers and retailers in the distribution or sharing of the burden of this cost imposed on them by the government. When the government enacted RA 9994 or the "Expanded Senior Citizens Act of 2010", the government simply declared, "You various players, you give mandatory 20 percent discount to senior citizens. This is on top of the mandatory 50 percent price discount on the 21 molecules, on top of the various taxes and regulatory fees that we collect from you, on top of other regulations that you must comply."

It is not clear how much of those cost borne by various players are tax deductible or considered as costs and are deductible to overall revenues, to be considered by the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF). What I know is that the DOF is hard-pressed to negate or deny as many requests for tax credits as much as possible, and to impose higher taxes whenever possible, due to the never-say-die budget deficit every year and the ever-rising public debt. In which case, it shows government hypocrisy to create certain subsidies but itself is not willing to share the cost of such welfare programs.

The members of the ACH agreed to have another working group meeting, with the presence of the BIR and DOF people so they can state categorically which costs are to be considered as tax creditable and/or part of operating costs and which ones are not.

On the EDPMS, I argued that this system should have been unnecessary. There is no food price monitoring system, housing and construction materials price monitoring system, clothes and shoes price monitoring system, healthcare professionals' fees monitoring system, lawyers' fees monitoring system, and so on. Players bring down their price as a result of competition, or they raise their price as a result of higher operating costs or higher profit target.

Besides, players operate based on the brand that they have cultivated for years. For instance, Mercury boasts of "gamot laging bago" (medicines are always new) brand, Watsons declares "your personal store" brand, The Generics Pharmacy advertises "gamot mabisa na, matipid pa" (effective and cheap medicines) brand, other independent or non-chain drugstores also have their own brands often associated with cheaper medicines. So when patients and consumers go to Mercury or Watsons, drug prices there are almost always higher than those from other smaller and non-chain drugstores. That quickly solves the information asymmetry (or imbalance info) problem for patients. If they want cheap medicines, it would help if they skip Mercury and Watsons right away, and go there only if the medicines they are looking for are not available in the smaller  drugstores.

When the government imposes mandatory compliance with EDPMS, all drugstores and pharmacies have to devout resources like computers, time and manpower, which contributes to higher operating costs, which they will have to pass on to the consumers in the form of higher prices. And so the goal of having lower medicine prices for the consumers is partly or indirectly defeated or negated.

But since that regulation is already in place, it would help if the new or a revised Administrative Order (AO) to be issued by the DOH implementing the EDPMS should be kept as short and as clearly as possible. The current AO is 16 pages long.

On agenda item #4, the DOH gave us a copy of its official position on SB 5 by Sen. Loren Legarda and SB 2960 by Sen. Manny Villar, dated 22 May 2012. The DOH made an explicit position of not supporting the creation of DPRB. Cheers to the DOH. It added that "Drug price regulation has the potential to limit access to quality essential drugs."

When the agenda went to item #7 above, on requests for price increase by some pharma companies whose products were covered by the price control or maximum retail price (MRP), there were proposals for the ACH to devise some criteria whether to grant such requests or not.

I spoke and argued that first of all, the price control policy was based on illegal criteria in the first place. I posted this last November 14, 2011:

See this comparison that I made. It shows that the criteria used by the DOH has zero basis in the law or its IRR.


Read more at  Drug Price Control 21: Illegalities in the Implementation of the Policy.

Secondly, the second list of molecules on so-called "voluntary" price reduction in 2009 and was later illegally termed as GMAP or Gloria Macapagal Arroyo Price, was just an act and Resolution by the Advisory Council, and not an Executive Order (EO) coming from the President, or a law (RA) coming from Congress. Thus, it is possible for the ACH to issue another Resolution revoking the earlier Resolution issued in July 2009.

Is this possible? Yes, I think so, if heavy politics will not come to intervene.

I still vividly remember the AC meeting at the DOH on June 05, 2009, it was Friday afternoon. Majority or all members of the Council except James Auste of the Cancer Warrior Foundation (CWF) did not favor the imposition of price control based on the four criteria that was suggested by the IMS  as commissioned by the DTI and/or the DOH. What the body agreed was to discourage or disallow the Discount Cards program by Pfizer at that time as there was some ethical problems related to the practice. We were asked by then DOH UnderSecretary Alex Padilla, to send our written comments not later than June 06, Saturday. I and other members of the Council sent our written comments saying No to the proposed price control.

By Monday June 08,  then DOH Secretary Francisco Duque already announced in media, along with former Sen. Mar Roxas, that they have a list of drugs to be put under price control. In short, the agreement of the AC was totally not followed and junked. That is politics.

I think it is time now for the ACH to decide whether to junk the drug price control policy based on illegal criteria or not. I think there is less politics now over the DOH compared to mid-2009 where a Presidential election was coming up in less than a year then. Hence, the DOH and the ACH members can state more independently their position and not be cowed by a very influential Senator, or by an unpopular President serving her last year in office.

I hope that DOH USec. Madz Valera can put this as one of the agenda items in the next meeting of the ACH this coming December. I believe that the illegalities and heavy ugly politics around the policy made more than three years ago should be corrected and reversed now.
--------

See also:
Drug Price Control 26: Conflict of Interest in Drug Price Regulation Legislation, May 13, 2012
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 8: Drug Price Regulation is Wrong, May 04, 2012
Fat-Free Econ 9: Drug Pricing Bureaucracy is Not Cool, May 11, 2012
Fat-Free Econ 18: Healthcare Corruption and Physician Entanglement, July 30, 2012
Fat-Free Econ 22: Three Years of Drug Price Control Policy, August 30, 2012

Wednesday, January 25, 2012

RUM 1: Reducing Medicine Abuse

I am starting a new thread in healthcare, the "rational use of medicines" or RUM. This will be the 7th thread or sub-topic under health topics in this blog. The other 6 and their latest issues are:

1. Drug Price Control 24: Forcing Drug Firms to Report Payment to Doctors, January 24, 2012
2. PhilHealth Watch 11: Hospital Bill Deductions (b), January 19, 2012
3. Lifestyle Diseases 14: Transformative Education on Health, January 18, 2012
4. IPR and Medicines 20: Scherer Paper on Pharmaceuticals R&D, January 12, 2012
5. Healthcare Competition 14: Centralization vs. Deregulation of Healthcare, December 31, 2011
6. Generic Drugs Asia 4: Vaccines from China, November 29, 2011

The reason why I open a new thread on RUM is because I attended the DOH Consultative Meeting on the National Framework on Rational Use of Medicines (NaFRUM), Consumer Group, yesterday at the DOH compound. The DOH is planning to issue a new Administrative Order (AO) on RUM, and they are doing a consultative meeting for various sectors (academe, government agencies, pharma industry, hospitals and drugstores, consumer groups).

I was actually curious what's this new initiative by the DOH, why another AO, can't this subject be not implemented under existing programs? That is why I attended the consultation. Almost all participants who came yesterday were also from member-NGOs of the Coalition for Health Advocacy and Transparency (CHAT). Like leaders from HealthWatch and MeTA-Philippines (former Gov. Obet Pagdanganan, Cecile Sison), COPA, Botika Binhi, AltHealth, Woman Health, Kilos Damit, HAIN, etc.

The event was organized by the National Center for Pharmaceutical Access and Management (NCPAM), the lead agency under the DOH in implementing the Philippine Medicines Policy (PMP), like generics promotion, Botika ng Barangay (BnB) or village pharmacy, P100 or Compact Treatment program, drug price control and related programs and policies.

New NCPAM Director, Dr. Ma. Virginia Ala, MD, Director IV, gave the opening and welcome message. She mentioned some pathetic sights like so many softdrinks in elementary kids' canteen and diet, junk and fatty/preserved foods on toddlers and children's diet, which are  unhealthy food and contribute to future diseases someday, which will require new medicines and other treatment. That was a good observation by Dr. Ala. She bolstered my repeated argument: healthcare is first and foremost, personal and parental/guardian responsibility, secondarily as government responsibility. I believe that government should come in only in controlling infectious and communicable diseases, in treating  pediatric diseases, and helping people with mental and physical disabilities because the treatment and theraphy for such conditions are usually very high and expensive.

Dr. Irene Farinas of NCPAM gave an overview about their office and its major activities, as well as some facts on Philippine health and pharmaceutical situation. Here are some interesting facts (at least for me) that she shared:

1. Drug price control via maximum retail price (MRP) -- but the illegal terms and concepts GMAP and MDRP are still used by the DOH -- is now a regular (and long-term?) policy under "Affordable medicines" program.

2. Lots of interventions to keep drug prices as low as possible, some to be given out free as regular entitlements for the poor. Such interventions aside from MRP are the BnB, mandatory 20 percent discounts for senior citizens (RA 9994), generics promotion, etc.

I have argued in the past in this blog that drug price control policy -- forcing the more popular, more saleable branded drugs by the innovator and MNC companies to become -- contradicts and defeats the generics promotion policy, as people shift from the lesser known generics to the more popular innovator branded drugs. The DOH never took notice of this. Or they may, but the politics behind such policy declaration in 2009 has overtaken it and the politics of the current administration still prevails to keep that wrong policy.

3. BnB is a popular program that contributed to cheaper and more accessible medicines in more barangays or villages nationwide. Here are the relevant slides she presented.

But the program is also problematic not only in terms of maintenance but also because it is easily hijacked by the local politicians during elections. Now there are 16,350 BnBs nationwide (as of June 30, 2011) that cost the DOH P567 million so far, and there are variants, like Botika ng Manggagawa (workers' pharmacy), Botika ng Taumbayan (people's pharmacy). Seed capital is P50,000 per outlet, targetting 100 outlets or P5M.

4. The P100 or Compact Treatment program is tied up to the DSWD's 4Ps or conditional cash transfer (CCT) program, provided the poor are registed with the DSWD and are PhilHealth member under the sponsored program.

Makes one think, it really pays to remain poor forever for some people: free cash, free PhilHealth membership, super-subsidized medicines, free education, subsidized housing, etc. And since these programs have no titmetable, they are forever programs, why aspire to get out of poverty? Or why not pretend to be poor even if actual income has actually increased? But I digress....

5. Entitlement (or free) medicines program, at least for fixed number of beneficiaries: leukemia (ALL-L2), breast cancer (stages 1 and 2), anti-rabies, Vitamin A for pregnant women, TB (AFB smear, insulin (for diabetics), Fluids (for DOH hospitals), Valsartan (for hypertensive), Rotavirus (for 0-6 months old babies), BEMONC (for women of reproductive age).

6. Outpatient benefits (OPB) will soon be shouldered by PhilHealth, by 2016. This will be both good news and bad news. The good news is that all members, not just the sponsored or indigent group, will be covered by OPB; the bad news is that this will most likely require more or higher monthly contribution, both employers and employees.

These are the additional entitlement medicines. They will not just be "cheaper medicines" but "free medicines", for certain diseases.

7. Electronic drug price monitoring system (EDPMS), forcing drugstores, chain or non-chain, to regularly upload their drug prices to the DOH's EDP, to enable the consumers to compare prices of drugs among competing drugstores and pharmacies. I think this is cool, if the cost of compliance is low. If compliance cost is high, say for the small chain (2-3 stores) or single drugstores with a non-computerized system, this requirement means additional cost which they will have to pass on to the consumers, resulting in higher drug prices. The website of the EDPMS is http://uhmis.doh.gov.ph/eedpms.

In a free market situation, sellers develop their own brand and corporate image. Say drugstore chain A is very clean, all outlets are air-con, in strategic places and corner stores, have licensed pharmacists all the time, etc., and their drug prices are generally high. Drugstore chain B is also clean, all outlets are air-con, in malls, and their prices are a bit lower or higher than A. Drugstore chain C have cheap drugs but their outlets are non-air con, in less convenient areas, the staff may not be licensed pharmacists, etc. And so on. So people and consumers can expect certain drug prices even without checking the DOH's EDP and the internet. There is a tradeoff between drug prices and convenience, of being in a good brand or lesser-known brand drugstore.

There was a discussion and exchange after Dr. Farinas' presentation. Gov. Obet asked what constitutes "generic medicines" and "branded medicines". I followed it up by asking if all products of Unilab for instance, a domestic generic manufacturer, can be considered as "branded medicines" since all their products have brands (Biogesic and Tempra for paracetamol, for instance). NCPAM guys said Yes.

I shared what I learned from Lyle Morrel of Watsons, and from Joey Ochave of Unilab, that there are 3 types of generic drugs in the Philippines:

a. product-branded generics
b. company-branded generics
c. generic-generics.

Examples of (a) are Biogesic, Tempra, etc. (for paracetamol)
Examples of (b) are RiteMed, "Unilab yan", "Pharex yan", "Alagang Pfizer", etc.
(c) would have no product brand, only the name of the molecule, and a small label for the name of the manufacturer, its address, etc.

The Generics Law of 1988 actually referred to (c) only and would consider (a) and (b) as belonging to "branded medicines" already. The (c) constitutes a very small portion of Philippine pharmaceutical products, perhaps just 5 percent, or even less.

The discussion later shifted to lifestyle diseases. I am happy to hear that more NGO leaders now realize the need to focus on preventive healthcare as the bulk of DOH and LGUs' health activities are focused on treatment and curative healthcare. People are sick of various diseases,  government instantly think of medicines and how to make them more affordable, more accessible.

(To be Continued...)

Saturday, December 31, 2011

Healthcare Competition 8: Centralization vs. Deregulation of Healthcare

Last December 5, I posted my paper on Taiwan's National Health Insurance (NHI) system in a facebook group, Pharma Cares. It has attracted a brief exchange of ideas with Dr. Melissa S. Guerrero, the former Director of NCPAM (National Center for Pharmaceutical Access and Management) - DOH. I did not have time to re-read the papers that she posted, but I think readers of this article would benefit from those links that Doc Melissa gave.

I only asked permission from her to post our exchange in CHAT googlegroups, the online discussion group of  Coalition for Health Advocacy and Transparency, which I did. I thought readers of this blog would be happy to check the various papers and studies that she suggested, so I decided to post the exchange in this blog as well.

  • Hi all, may I share with you some facts and opinion about Taiwan's National Health Insurance (NHI), and how these can be considered in the proposed revisions to PhilHealth and "universal healthcare", http://funwithgovernment.blogspot.com/2011/12/healthcare-competition-13-taiwans-nhi.html



    • Mhyanne Panganiban-Dioso ang dami po senate bills proposing ammendments sa PHIC..
      December 14 at 10:04pm · 

    • Nonoy Oplas Meron din bang bills deregulating the health insurance sector? I think all bills are for further centralization of the sector, and that's where many problems come, like in the case of Taiwan.
      December 15 at 6:05am · 

    • Melissa Guerrero There are many success stories too of centralized healthcare with strong government financing and regulations--- Germany, UK, Netherlands, Australia. Meanwhile, deregulating the health insurance sector is like going to the direction of the USA which is the most inefficient, wasteful and inequitable system which Obama now finds difficult to dislodge given the lobbying of the for-profit HMO industry. We don't really wanna go there.
      December 19 at 4:07am · 

    • Nonoy Oplas But I read that UK system is inefficient too, here are the 5 scary stories, http://funwithgovernment.blogspot.com/2011/02/healhcare-competition-8-uk-again.html. In addition, it's bleeding financially, like what's happening in Canada, Taiwan, etc.

      December 19 at 6:51am ·  · 

    • Melissa Guerrero There is no perfect system. In fact from here I can see that there are still inefficiencies they can do without (they're funding bariatric surgery for example). But it is backed up by evidence that the UK NHS is the most efficient and compared to the US has far better health outcomes given that it spends half than the US does. US on the other hand, has the biggest health spending, has the most uninsured, and the worse child health outcomes among developed countries.http://image.guardian.co.uk/sys-files/Guardian/documents/2011/08/07/JRSMpaperPritWall.pdf
      December 19 at 7:52am · 

    • Nonoy Oplas Thanks for that study doc melissa. I think the authors failed to mention that the main reason why healthcare in the US is very expensive is because of their litigious and medical malpractice system. A physician normally pays $250,000 insurance per year, protection against suing by patients between now and up to 18 yrs in the future (in the case of OB Gyne specialists). So physicians will jack up their fees to recover that quarter million investment in insurance alone.
      December 19 at 7:59am · 

    • Melissa Guerrero The point is why would we choose a system which doesn't work? Even US citizens are complaining and jumping to canada borders to get affordable medicines. My American health economist friend complains his system doesn't work. Everyone in the Western world is asking the US: "then why are you letting drug companies make your system go bust?"
      December 19 at 8:03am · 

    • Melissa Guerrero Well there are the litigations but they are also known to have the highest prices of medicines like the Philippines. Too much specialization, no gatekeeping, laiseez faire health market (that doesn't work and is in fact dangerous in health economics, that's why there's a separate science).
      December 19 at 8:05am · 

    • Nonoy Oplas The news report and Pritchard paper mentioned Switzerland as having an inefficient health system. That's the opposite from a news report that I read and discussed here, http://funwithgovernment.blogspot.com/2010/08/healthcare-competition-1-switzerland.html. Swiss people are required to have a health insurance, but they are not required to get from only one supplier, the govt. There is competition, people have choices.

      December 19 at 8:08am ·  · 

    • Melissa Guerrero Why does US health care cost so much?http://economix.blogs.nytimes.com/2008/11/14/why-does-us-health-care-cost-so-much-part-i/
      December 19 at 8:12am · 

    • Melissa Guerrero ‎"The myth that competition has been key to cost containment in the Netherlands has obscured a crucial reality. Health care systems in Europe, Canada, Japan, and beyond, all of which spend much less than the United States on medical services, rely on regulation of prices, coordinated payment, budgets, and in some cases limits on selected expensive medical technologies, to contain health care spending.5 Systemwide regulation of spending, rather than competition among insurers, is the key to controlling health care costs."http://www.nejm.org/doi/full/10.1056/NEJMp1106090
      December 19 at 8:31am · 

    • Nonoy Oplas Thanks for the links, I will chew them and make a discussion paper later. But Japan is constantly mentioned in the papers you gave. My friend who lives in Japan says the healthcare system there is heavily indebted, close to bankruptcy. The Japan govt shoulders 95% of hospitalization bill, so physicians over-charge, they don't prescribe generics, mostly branded innovator drugs. Patients also abuse, even if they need to stay only 2-3 days in hospital, they stay 1 week, they pay only 5% of the total bill, why not over-stay. If you put allowance for abuse, people will exploit it. Japan is now the most indebted country on the planet, the only difference is that the bulk of its debt is domestic, not foreign.
      December 19 at 12:14pm · 

    • Melissa Guerrero That's why when we do universal coverage, we have to be wise on where we spend money and how much.
      December 19 at 2:08pm · 

    • Melissa Guerrero I also don't believe in a free-for-all healthcare system. No country can afford that. The Singapore 3M model is worth looking at in how they finance health care. Government comes in during catastrophic spending but citizens are required to have savings for usual hospitalization (Medisave). There should be personal responsibility as well to minimize abuse. I think that is what is missing in the UK and other health systems where government shoulders everything. But no doubt, there should be a social safety net that's either funded through tax or single-payer health insurance.
      December 19 at 3:11pm · 

    • Nonoy Oplas Yes, I also believe that PhilSick need not be abolished, it can be retained as last resort or add-on health insurance, people should assume more personal responsibility in healthcare, including personal finance via health insurance -- a private HMO, a cooperative or community healthcare, an LGU-sponsored healthcare. So people will have 2 insurance, one that is mainly private or NGO, another for PhilSick. The latter will be used only when one is really sick that he/she has to be hospitalized. For outpatient, dental, annual medical check up, Philsick cannot be used, one has to utilize the private/NGO/LGU healthcare services.
      December 21 at 8:53pm · 

    • Nonoy Oplas Btway, permission to use this exchange doc melissa, i want to post ths in our CHAT googlegroups? thanks.


I hope to read and make my own discussion by next year, on the papers that Doc Melissa gave.

Happy New Year friends.
--------

See also: