Four years ago, I also gave a talk at his Economics graduate class also at USC. I was one of four speakers then. See Drug Price Control 38: Presentation at USC, Cebu, March 2010.
The other speaker that day was Prof. Eric Salenga, Chairman of the Pharmacy Department, UP Manila, also President of the Young Pharmacists Association of the Philippines (YPAP). He's a very articulate speaker.
My outline was simple. I. Dreaming a single national price, II. Drug price control of RA 9502,
III. Senior citizens discount of RA 9994, IV. Conclusions.
I.
Dreaming a single national price
Many of those who advocate government price control and/or mandatory discounts of certain commodities in society make this faulty assumption. That same product with same dosage or quality made by the same manufacturer in the same country should have only one price
nationwide. Thus, medicine price by the same manufacturer should be the same regardless
of outlets.
Any difference in pricing is explained by corporate greed;
the wider the price difference, the bigger the greed, so government should
control or limit that greed in the name of public health and welfare. This can be an emotionally powerful argument.
When this logic is applied internationally, it would imply that same product
with same dosage or quality by same manufacturer made in different but similarly developing
countries should have little price differentials. But why this did not happen?
This line of thinking is illogical because there can never be a single national price.
To make meaningful price comparison of a
commodity country by country, one must show:
a.
same or comparable retail
outlet, say only from Watsons (not a hospital pharmacy in country A vs. small
drugstore in country B)
b.
same reference period for
price, say December 30, 2012 (not end-January in A vs end-December in B of same
year)
c.
Same reference period for
exchange rate in converting different currencies into a common currency, PhP or
US$, say as of end-June 2013
d.
taxes and fees, national and
local, applied on each commodity
e.
subsidies or mandatory discount
or price control, if any, applied on each commodity;
f.
other factors.
I asked some individuals who were involved in the lobbying and crafting of the Cheaper Medicines bill into a law, RA 9502, the raw data for such price comparison in the above table, they could not present one. Those numbers in the Senate Committee Report therefore, were suspicious, but they have become strong basis for enactment into a law of the bill.
RA 9502's main concerns were as follows:
* Amending the Intellectual Property Code
(IPC) to allow TRIPS flexibilities in the intellectual property rights (IPR)
like patents of innovator drugs and allow compulsory licensing (CL), special
CL, “early working” and parallel importation.
* Drugs and medicines price regulation
through the issuance of maximum retail price (MRP, not MDRP or GMAP).
* Non-discriminatory clause, amending the
pharmacy law and generics law and strengthening BFAD, now FDA.
* Only one goal: cheaper and safe
medicines be more accessible to the poor.
But even before RA 9502, average medicine prices were already declining. Not because of political coercion and harassment, but because of competition among drug manufacturers themselves.
