BWorld 211, Intellectual property, innovation, and prosperity

* This is my column in BusinessWorld last May 10, 2018.

The BusinessWorld Economic Forum 2018 is fast approaching this coming May 18 and it has a timely theme, “Disruptor or Disrupted? The Philippines at the Crossroads.” Focus is on the challenges, risks and potentials of artificial intelligence (AI) and other technological advances.

Endless trial and error, research and development, intangible and intellectual creations, are at the heart of innovation and economic disruptions. The role of property rights protection in general and intellectual property rights (IPR) in particular cannot be overlooked.

Here are some numbers showing the degree of competition among countries and economies in encouraging and protecting innovation and IPR as shown by three data sources. These are the

(1) World Intellectual Property Organization (WIPO), INSEAD, and Cornel SC Johnson College of Business, “The Global Innovation Index 2017” (GII); (2) Property Rights Alliance (PRA) — International Property Rights Index 2017 (IPRI); and the (3) US Chamber of Commerce (USCC) — Global Innovation Policy Center (GIPC), International IP Index (IIPI) 2018.

WIPO’s methodology is interesting.

The overall GII score is computed by getting the simple average of the Input and Output Sub-Index scores. The Innovation Input Sub-Index is comprised of five pillars: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business sophistication. The Innovation Output Sub-Index is composed of two pillars: (6) Knowledge and technology outputs and (7) Creative outputs.

Each pillar is divided into three sub-pillars and each sub-pillar is composed of individual indicators, for a total of 81 indicators. Cool.

Data on GDP per capita income at purchasing power parity (PPP) $ values are from the International Monetary Fund (IMF), World Economic Outlook database, April 2018. The numbers in parenthesis of each report (WIPO-GII, IPRI, IIPI) represent the total number of countries included in their respective reports (see table).

  

These numbers show the following:

One, countries with high global rank and scores in innovation and IPR index are also those with high per capita income. Conversely, countries with low global rank in innovation also have low per capita income.

Two, the Philippines in particular exhibits this low ranking. Placing only 73rd out of 127 countries in WIPO-GII 2017 report, 64th out of 127 countries in PRA-IPRI 2017 report, and 38th out of 50 countries in the GIPC-IIPI 2018 report. Our GDP per capita income of only $8,300 at PPP values is low, and even lower if nominal GDP prices are used, less than $3,000.

Three, many East Asian economies are rising in ranking, landing in the top 25% in global ranks.

To further reiterate the importance of intellectual property (IP) and innovation, 70 independent and free market-oriented think tanks and institutes worldwide sent an open letter to WIPO Director General Dr. Francis Gurry, during the 2018 World IP Day last week, April 26.

The letter was spearheaded by the PRA in the US and Minimal Government Thinkers is among the 70 co-signatories. The letter was also sent to UN Secretary-General Antonio Guterres, and Director-General of the World Health Organization (WHO) Tedros Adhanom Ghebreyesus.

The letter highlighted some important facts, among them:

* In 2016, a record 3.1 million new patents were filed worldwide. These patents protected groundbreaking technological processes, helped cure devastating diseases, and modernized everyday conveniences.

* Copying is not the same as inventing and enforcement of IP rights helps prevent counterfeits that undermine innovation and help finance criminal organizations. This shadow economy of counterfeits is responsible for nearly 2.5% of global imports, amounting to nearly $461 billion.

* 10% of global pharmaceutical trade is thought to be counterfeit. These “medicines” have serious health consequences, including death. New medicines require research, trials, $2.8 billion, and up to 12 years. IP Rights incentivize commitment and collaboration.

* Removing trademarks through plain packaging has costly economic, health, and security consequences. $300 billion is the implied loss to the beverage industry if such packaging is applied to alcohol and sugary drinks.

Another global group, the Biotechnology Innovation Organization (BIO) is also promoting innovation in biotechnology of innovative health care, agricultural, industrial, and environmental products.

Governments, national and multilaterals like the UN and WHO, should help encourage and respect IPR and innovation. Some cases however show that they do otherwise.

For instance, the 2016 UN High-Level Panel on Access to Medicines, their report has portrayed patents and IP as harmful to global development and human rights. Backward thinking.

The enemy of public health and human rights are counterfeits and substandards — medicine, food, and drinks — and the criminal organizations that manufacture and sell these products.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

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See also:

BWorld 206, Intellectual property rights in East Asia, May 09, 2018

BWorld 208, Consumer choice in electricity supply and prices, May 11, 2018 

BWorld 209, Is the PCC a facilitator or a hindrance to business competition? May 15, 2018 

BWorld 210, Electricity competition, EPIRA, and WESM, May 16, 2018

IPR and Innovation 42, Coalition letter to WHO re plain packaging

Today, a global coalition of 62 market-oriented independent or non-government think tanks and institutes sent a letter to the WHO. Three institutes from ASEAN countries were among the signatories -- CIPS in Indonesia, IDEAS in Malaysia, and MGT in the Philippines.

Dr. Tedros Adhanom Ghebreyesus

Director-General

World Health Organization

December 01, 2017, marked the five-year anniversary of the full implementation of plain packaging in Australia. The removal of brands and trademarks from packaging remains a gross violation of intellectual property rights and has failed to achieve its intended goal. As a global coalition of sixty-two think tanks, advocacy groups and civil-society organizations that have been critical of plain packaging for any product, we write in response to proposed plain packaging tobacco control measures and to the announcements by several countries of their interest in pursuing these policies.

Intellectual property rights are human rights enshrined in the Universal Declaration of Human Rights: Article 17, the right to ownership; Article 19, the right to freedom of expression; and Article 27, the right to protection of material interests. In this regard, even if plain packaging is effective, it should still be repealed, as rights are inalienable and should not be discarded for political purposes.

International trade law, the UNDHR, and historic international treaties are designed to protect intellectual property for this very purpose. The innovation incentive created by trademarks fuels competition and produces amazing products demanded by consumers like affordable medical advances that save lives. Obviously, any loophole should be closed, not exploited....

After Australia implemented the policy, other industries have been targeted around the world: alcohol, sugary beverages, fatty foods, even toys. These industries employ millions and any regulation that would deny key IP assets would have a devastating global economic impact. The trademark value alone of only twelve companies associated with these sectors is estimated to be more than $1.8 trillion.

The costs of plain packaging are enormous: the loss of the innovation incentive to the economy and society are inestimable, the mutilation of established international IP law is unprecedented, and the market carve-out to illicit actors, including terrorists, is reprehensible. It is beyond reason that such a policy continues to be pursued, even after it has failed to achieve its intended goal.

We urge the WHO and governments around the world to stop infringing on intellectual property rights with plain packaging policies.

(Full letter and names of institute heads, co-signatories, see  http://www.propertyrightsalliance.org/wp-content/uploads/2018/03/2018-Global-Plain-Packaging-Coalition-to-WHO.pdf, or 

https://www.slideshare.net/Noysky/global-coalition-letter-to-who-vs-plain-packaging)

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See also: 

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID, November 05, 2017 

My first article in BWorld, Oct 2007, on IPR, December 29, 2017 

IPR and innovation 40, WHO health alarmism and IPR tinkering, January 16, 2018 

IPR and Innovation 41, Governments and the UN on patent prizes, February 23, 2018

IPR and Innovation 41, Governments and the UN on patent prizes

I am reposting below a good article by a friend. Enjoy.
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How governments can screw up the development of new drugs

by Philip Stevens

THE PATENT-BASED system of drug development will come under further pressure from key countries aiming to increase access to medicines at the executive board meeting World Health Organization in March.

Critics of the system want reform, arguing it makes drugs too expensive and fails to provide cures for those in need who may be unable to pay, such as people in developing countries. They want to slash drug prices by replacing intellectual property rights with government-funded prizes as the primary innovation incentive for medicines.

Developers of new drugs would gain government cash prize rewards for the successful development of a new medicine.

In return, companies would be forced to hand over their intellectual property rights to the government, allowing generic manufacturers to enter the market immediately. Competition between generic drug manufacturers would boost access to those in need as new drugs would be sold at their marginal cost of manufacture, so the theory goes.

Meanwhile, governments would control and plan what disease areas are rewarded by prizes, ensuring that funding is allocated to health priorities in a fair and transparent fashion.

“Delinking” the cost of R&D from the final price paid for a medicine, and making governments the funders and planners of drug development, sounds like a simple public health care solution. But so far, no country has taken the plunge.

This is not surprising; “delinkage” is not the silver bullet claimed by its supporters.

One charge leveled against the patent-based system is that it creates losses for patients by inflating medicine prices well beyond their manufacturing costs. This downplays the economic benefits of new medical technologies from averted hospitalization and fewer sick days for workers. But more to the point, an innovation system based on prizes could create just as many, if not more, economic losses.

The prizes fund would have to come from taxpayers; their burden would be at least the $141 billion spent by the private sector on R&D each year. Income tax hikes would distort labor markets and interfere with job creation.

Then there would be the added costs of the enormous new bureaucracy to manage the prizes system.

In the absence of private sector investment, which country would be willing to fill this funding gap? Here the rhetoric of many countries, including India, at World Health Organization meetings in Geneva has not been matched by serious action. Even modest WHO R&D delinkage “demonstration projects” fall $73 million short of the $85 million required, with contributions from only 10 countries.

This new world of government-funded prizes to drive medicine innovation does not look promising.

Money apart, designing prizes that work is even more of a problem. Government committees would struggle to determine the true economic and social value of medicine before it is even created.

With estimates for developing a new medicine between $1.2 billion and $2.6 billion, this matters a whole lot.

For prizes lower than the true market value of the invention, drug developers — and the venture capitalists so instrumental for start-ups — would direct their capital away from medicine R&D towards politically safer but less socially useful areas. New medicines would dry up.

If a government prize committee overvalues the prize, it would trigger duplication of R&D as competitors swarm. Curious then that proponents of these prizes argue they will end the supposedly “wasteful” and duplicative R&D under the patent system.

Finally, there is the problem of politicization. A prize system would hand significant new discretionary powers to government officials as the judges of which medicines win prizes. Political factors would influence decisions on where to allocate funding, rather than clinical need. Diseases that could summon the most vocal lobby groups would get attention from prize bureaucrats, while less fashionable diseases may be ignored.

Political connections and lobbying could both play a role in securing a prize, while elected officials may attempt to influence R&D spending by government agencies.

Patents, on the other hand, represent a far less arbitrary form of innovation incentive. Government merely sets the framework of patent law, under which all companies compete. And competition is the key to innovation.

Take hepatitis C, until recently an incurable disease afflicting around 12 million Indians. Since 2013, no fewer than 10 new treatments have come onto the market, offering clinicians a huge range of options. Such breadth and speed of innovation under a winner-takes-all prize system is hard to picture.

Despite their superficial attraction, no country (other than the technologically backward former Soviet Union) has yet replaced intellectual property rights with prizes. The reasons are clear. Prizes risk economic distortions, undermining incentives for innovators, and adding a new layer of bureaucratization and politics. Be warned, therefore: delinkage and drug development do not go hand in hand.

Philip Stevens is director of Geneva Network, a UK-based research organization focusing on trade, innovation and health policy.

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See also: 

IPR and Innovation 38, Recent IP development in some ASEAN countries, October 24, 2017 

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID, November 05, 2017 

My first article in BWorld, Oct 2007, on IPR, December 29, 2017 

IPR and innovation 40, WHO health alarmism and IPR tinkering, January 16, 2018

WHO must go back to basics

I am reposting this good article by a friend, Philip Stevens, published in BusinessWorld last Thursday, January 18.
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To maintain relevance, WHO must go back to basics

AS one of 34 executive board members of the World Health Organization (WHO) meeting in Geneva next week, the Philippines shares a pivotal role in setting the global health agenda for the next year.

The WHO’s work has never been more important to address serious and evolving international health threats. It is only a matter of time before there is another global influenza pandemic to match the devastating outbreak of 1918, and, as recent outbreaks of Ebola and Zika have shown, new and deadly diseases can emerge at any time.

As a UN organization to which almost every country in the world belongs, the WHO should make strengthening national health systems and coordinating defenses against transnational disease its priority. But it’s often hard to know if the organization has any priority.

Superficial involvement in a ballooning number of health areas has made it a directionless, ineffective, and inward-looking player in an increasingly crowded global health scene.

The WHO’s tendency to do a lot poorly has seen it fail in its core business of leading international action on transnational disease outbreaks.

Take the organization’s response to the West African Ebola crisis of 2014.

An expert panel convened by Harvard Global Health Institute and the London School of Tropical Medicine criticized the WHO for its “catastrophic” delay in declaring a public health emergency.

The worry is that WHO will fail to handle the next inevitable global pandemic, leading to needless loss of life.

Funding is part of the problem: The WHO spent just 5.7% of its 2014-2015 budget on disease outbreaks, a 50% drop on the previous two years.

The WHO’s core budget, paid by member governments, fell from $579 million in 1990 to a feeble $465 million this year. To put this in context, this is considerably less than the Philippines receives each year in foreign aid earmarked for health.

The WHO has topped up its budget with project-based donations from countries and big charities, which now constitute 80% of its overall income. But that has cost the WHO its strategic independence.

Alongside global health staples like tropical diseases and immunization, the WHO now publishes recommendations on subjects from adolescent health and headaches to traffic safety and prisons.

Jeremy Farrar, director of the UK-based global health research charity the Wellcome Trust, argues the WHO is being undermined by its inability to focus on a few core issues.

“It’s so thinly stretched,” he told Reuters. “There’s arguably no organization on earth that could cover all those (topics) at sufficient depth to be authoritative.”

This lack of focus and mission creep will be on full display at next week’s WHO executive board meeting. Bizarrely, large parts of the agenda are dedicated to discussion of how to dilute the intellectual property (IP) protections that drive discovery of new health technologies.

Given the scale of today’s global health challenges, it’s not clear how repeating a tired and long discredited debate about IP and access to medicines will help. The vast majority of treatments prescribed in both developing and developed countries are off-patent and therefore unaffected by IP rules, yet far too many still do not have reliable access to them.

The real reasons for this have been well known for decades. There are too few doctors and clinics, and a lack of social and health insurance to protect people from the cost of health care expenditures (something WHO itself implicitly recognizes in its efforts to promote universal health care). In many places, weak supply chains and poor infrastructure separate people from the treatments they need.

A narrow and divisive focus by WHO on IP may tick political boxes, but it does nothing to improve health and will only lead to more unproductive debate. It looks like a power grab by WHO staff to intervene in areas that are best left to national governments.

In 2017, former Ethiopian foreign minister Tedros Adhanom was elected as new director general on a mandate to reform and consolidate the WHO. Almost immediately, he appointed no fewer than 14 assistant director generals to oversee a huge number of program areas. This is not the work of a reformer.

Next week is the first executive board meeting under Tedros’s leadership. The Philippines and other member states need to steady the ship. To maintain its relevance, WHO must get back to basics and do a few things well, not many things poorly. It must therefore unite nations around practical solutions, not divide them in pointless debates.

Philip Stevens is director of Geneva Network, a UK-based research organization focusing on international trade and health issues.

IPR and innovation 40, WHO health alarmism and IPR tinkering

Seven years ago, I briefly surveyed the various offices under the UN and I was surprised to see about 100+ different agencies. See UN bureaucracies -- too many! (December 20, 2010).

Among the huge and wide UN offices and bureaucracies is the World Health Organization (WHO). On its website, Media Center, News Releases 2017, these stories seem like we are still in the 90s or even the 80s, or the 70s -- there are many scary and alarmist stories in public health around the world until now.

It is already 2018 -- when illiteracy is already zero in many developing countries, when smoke signal and animal whistles are no longer used to communicate as hundreds of millions of poor people in developing and emerging countries now use smart phones with access to emails, facebook, twitter, youtube and other social media.

And the WHO and WB still declare that "half the world lack access to essential health services"? That measles "still kills 90,000 per year"?

Going back a few decades ago, the WHO was known for various health alarmism worldwide. Like the HIV/AIDS alarmism in the 80s to 90s and more recently, about NCDs (non-communicable diseases) alarmism.

Then the usual fare of the WHO -- blame directly or indirectly IPR and drug patents by innovator pharma and biotech R&D. Also blame free trade and FTAs for expensive medicines.

And I was surprised to see this.

http://www.who.int/medicines/EB142_13_shortage_and_access_medicines_vaccines.pdf?ua=1

"Global shortage of medicines and vaccines", wow. Since about 95-99% of WHO's essential medicines list (EML) are already off-patent, what stops the WHO and member-governments from mass-producing these drugs, directly or indirectly?

The WHO needs to shrink, both in size of bureaucracy and governments' funding. It has lots of health and economic global central planners that they want to plan-and-control many things and policies, forgetting that it was the private sectors and corporations' risk-taking that gave the world plenty of life-saving medicines since many decades ago.
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See also:

IPR and innovation 37, US-China dispute on IP, September 17, 2017

IPR and Innovation 38, Recent IP development in some ASEAN countries, October 24, 2017 

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID, November 05, 2017 

My first article in BWorld, Oct 2007, on IPR, December 29, 2017

Business Bureaucracy 11, SEANET workshop on business-friendly regulations

I am reposting this short summary of the SEANET meeting in Kuala Lumpur, a day after the 4th Asia Liberty Forum (ALF) ended.
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SEANET Workshop: Business-friendly regulations

21 February 2016

Following the three-day Asia Liberty Forum organised by ATLAS Network, the Centre for Civil Society and the Institute for Democracy and Economic Affairs (IDEAS), the Southeast Asia Network for Development (SEANET) held a workshop for think tank and business leaders, and academicians from around the world. The focus of the workshop was the development of business-friendly regulations in Southeast Asia.

The structure of the workshop was divided into presentations from various experts in free trade, followed by an open discussion between all workshop attendees. Julian Morris, of the Reason Foundation, shared how the introduction of innovative business models, combined with scale-backs on regulations, have led to massive improvements in quality of life, such as the greater travel convenience offered by companies such as GrabCar and Uber. Morris also highlighted how free market innovation has led to market solutions for harmful products, such as alternatives to cigarettes in the form of e-cigarettes. Such examples demonstrate that there are more viable alternatives to aggressive government centralisation.

Following Morris’ presentation, various attendees related of the threats to freedom of choice and the market inefficiencies caused by heavy regulations on tobacco. They mentioned how organisations such as the WHO’s Framework Convention on Tobacco Control (FCTC) are creating a forceful environment where there is an abuse of lawful processes and a neglect of the sovereignty of governments. Le Dang Doanh, an economist from Vietnam, shared how the vast amount of regulations on private sector industries has bred a culture of corruption in Vietnam, where business leaders are coerced to paying off public officials simply to obtain an operation permit. Such regulations have also severely limited the contribution of the private sector to the country’s GDP, which now stands at only 11.2%.

The workshop attendees then shifted gears from the current situation of regulations on businesses to share ideas on advancing the liberal agenda for the future. Sethaput Suthiwart-Narueput, of Thailand Future Foundation, offered three suggestions as to how think tanks can enhance a business friendly environment in their countries.

Firstly, Suthiwart-Narueput emphasised the need to reframe the current debate in a way that is applicable to the Asian context, in that the jargon used and the issues addressed must be localised for Asian societies. In addition, think tanks have to choose their battles and issues carefully, aiming to persuade parties caught in the middle ground rather than battling hard against opposing NGOs or governments. Lastly, there is need for regional collaboration between think tanks in different countries.

Wan Saiful Wan Jan, CEO of IDEAS, urged businesses and think tanks alike to establish connections with governments so as to open avenues for collaboration for market liberalisation, while Azrul Khalib from IDEAS mentioned the importance of research on the benefits of deregulation in persuading civil society to embrace free market principles. Various participants also pointed out the impact of media in advocating deregulation through applying public pressure on politicians.

In conclusion, the exchange of ideas, experiences and challenges between the diverse body of attendees in this workshop served to reaffirm the importance of collaboration between think tanks, businesses and academic institutions in championing liberal ideals in Southeast Asia.

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See also:

Business Bureaucracy 8: Exchanges at Imperium et Populi (Philippines), June 12, 2013 

Business Bureaucracy 9, Land title registration, July 29, 2015 

Business Bureaucracy 10, WB's Doing Business 2016 Report, October 29, 2015

Energy Econ 12: EPIRA, WESM, PSALM and DOE Bureaucracy, January 28, 2014 

BWorld 5, Transportation Bureaucracy and Uber, June 16, 2015

BWorld 19, Taxation and regulations in PH mining industry, September 24, 2015 

BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015
IPR and Innovation 31, On TPP, medicines patent and tobacco trademark, February 29, 2016

MeTA 19: National Forum 2015, Empowerment of Patients

The two-days annual national forum of the Medicines Transparency Alliance (MeTA) Philippines started today. I attended the afternoon session only because I attended the w FNF event at The Mind Museum, Fort Bonifacio.

Here is the program.

Daty 1, February 17

SESSION 1:  OPENING OF THE 2015 FORUM

ACCESS AND EQUITY: MAKING HEALTHCARE A REALITY FOR ALL

1. Invocation, Ms. Precy Declaro-Deluria,

Executive Director, Philippine Cerebral Palsy, Inc.

2. Overview of the Forum, Ms. Cecilia C. Sison, Country Coordinator, MeTA Philippines

Opening Message, Mr. Roberto M. Pagdanganan, Chairman of MeTA Philippines

3. Remarks from the International MeTA Secretariat

Ms. Deirdre Dimancesco, Technical Officer - Department of Essential Medicines, World Health Organization (WHO)

Dr. Tim Reed, Executive Director, Health Action International (HAI)

4. Message of the Department of Health (DOH)

Atty. Nicolas B. Lutero III, OIC, FDA; Director, Legal Services, DOH

5. Keynote Speech, Dr. Julie Lyn Hall, MBE, WHO Representative to the Philippines

SESSION 2: EMPOWERMENT, ENGAGING PATIENTS IN THE DIALOGUE ON HEALTH

6. Stakeholder Mapping and Development of a Framework for the Engagement and Empowerment of Patient Organizations in the Philippines

Mr. Wadel S. Cabrera III, WHO / MeTA Project Consultant

7. Panel Discussion

Moderator: Dr. Noel R. Juban, Professor, UP College of Medicine

(a) Ms. Deirdre Dimancesco, Technical Officer - Department of Essential Medicines, WHO

(b) Dr. Maria Minerva P. Calimag, President, Philippine Medical Association (PMA)

(c) Mr. Teodoro B. Padilla, Executive Director, Pharmaceutical and Healthcare Association of the Philippines (PHAP)

(d) Engr. Emer Rojas, President, New Vois Association of the Philippines

(e) Dr. Benjamin Bernardino, Secretary General, Life Haven Independent Living Center

(f) Ms. Salvacion Basiano, President, Center for Empowerment and Development of the Elderly and Seniors

(photo below, during the MeTA national forum 2014, held at Bayanihan Center, Unilab Complex, Pasig City)

SESSION 3: MULTISTAKEHOLDER COLLABORATION, HEALTH AND MEDICINES FOR THE FILIPINO PATIENT

8. Panel Discussion – Part 1 (Access to Medicines)

Moderator: Mr. Tomas Marcelo Luke G. Agana III,  Adviser, Philippine Chamber of  the Pharmaceutical Industry (PCPI)

(a) Drug Price Watch / Electronic Drug Price Monitoring System (EDPMS) / Drug Price Reference Index (DPRI)
by Mark Haasis, National Center for Pharmaceutical Access and Management (NCPAM), DOH

(b) Rational Use of Medicines (RUM) Framework / Antimicrobial Resistance (AMR) Policy,

by Dr. Anna Melissa S. Guerrero, Program Manager, NCPAM, DOH

(c) Combating SSFFC (substandard, spurious, falselylabeled, falsified, counterfeit) medical products / Coalition for Safe Medicines, 

by Ms. Maria Lourdes C. Santiago, RPh (invited), Director, Center for Drug Regulation and Research, Food and Drug Administration (FDA)

(d) Pharmaceutical Transparency Through Technology (PTTT) / LUNAS mobile app, 

by Dr. Bryan Albert Lim, Founding Partner, Health Sector Catalyst

(e) Tamang Serbisyo para sa Kalusugan ng Pamilya (TSeKaP) / Z Benefits 

by Dr. Rizza Majella L. Herrera,  Head, PCB/TSeKaP Team, Philippine Health Insurance Corporation (PhilHealth)

(f) Local government initiatives to address medicine needs of its constituents and the community 

by Hon. Gerardo V. Calderon (invited), Mayor, Municipality of Angono, Rizal

(g) Training Modules on Supply Chain Management (SCM) / Philippine Practical Standards for Pharmacists (PhilPSP)

by Mr. Roderick L. Salenga, NPO (EDM), WHO Country Office

Day 2, February 18

SESSION 4:  STAKEHOLDER PERSPECTIVES

10. Stakeholder Workshops

Moderator: Ms. Cecilia C. Sison,  Country Coordinator,  MeTA Philippines

Group Facilitators:

 Mr. Ralph Emerson P. Degollacion

 Dr. Irene F. Farinas

 Mr. Manuel Alexander Haasis

 Dr. Elenita Loida A. Pedrosa

 Ms. Karen A. Villanueva

SESSION 5:  SHARING STAKEHOLDER INSIGHTS

Invocation Ms. Maria Zenaida J. Averilla, Founder / CEO, Scleroderma Society of the Philippines

Reports on the Day 1 Stakeholder Workshops

11. SESSION 6: ACCOUNTABILITY,  FOLLOWING THE MONEY SPENT ON KEY HEALTH PROGRAMS

(a) Medicines Watch, by Dr. Elmer S. Soriano, MeTA / CHAT Project Consultant, Civika Institute

(b) Philhealth Watch, by Mr. Rene R. Raya, MeTA / CHAT Project Consultant, Action for Economic Reform

(c) Sin Tax Monitoring Tool, by Ms. Marian Theresia R. Valera, Consultant, HealthJustice Philippines

12. Lunch / Civil Society Meeting with the IMS

Panel Discussion

Moderator: Mr. Roderick L. Salenga,  NPO (EMD),  WHO Country Office

(a) Asst. Sec. Elmer G. Punzalan, MD (invited), Head, Office for Health Regulation, DOH

(b) Ruben John A. Basa, Senior Vice President, Health Finance Policy Group, PhilHealth

(c) Ms. Teofila E. Remotigue, CEO, National Pharmaceutical Foundation, Inc., Coalition for Health Advocacy and Transparency

SESSION 7:  SUSTAINABILITY, BUILDING ON THE GAINS AND MOVING FORWARD

13. Response of The Filipino Patient 

Mr. Josefino de Guzman, President, Psoriasis Philippines;

Ms. Maria Fatima G. Lorenzo, President, Philippine Alliance of Patient Organizations

Synthesis and Closing Remarks 

Mr. Roberto M. Pagdanganan, Chairman, MeTA Philippines

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See also:
MeTA 15: Forum 2014 on Healthcare Ethics and Transparency, January 30, 2014 

MeTA 16: Day 1 of Conference 2014, February 11, 2014 

MeTA 17: CHAT General Assembly, March 2014, March 31, 2014 

MeTA 18: More Financial Independence, More Stakeholders Participation, December 11, 2014

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

MeTA 15: Forum 2014 on Healthcare Ethics and Transparency

The Medicines Transparency Alliance (MeTA) Philippines will hold its annual forum this year with a timely theme, Transparency and Ethics in Healthcare. Things that are expected of various players and professionals in the health sector -- pharma companies, drugstores and pharmacies, hospitals and clinics, doctors and pharmacists, etc. And patients and the public too, we should have our own "code of ethics".

Here is the provisional program as of January 25. I removed the time slots to focus on topics and speakers. Lunch time is indicated, so readers can see which ones are morning and afternoon sessions.

The Mexico City Principles (MCP) is a set of ethical conduct adopted by APEC member countries for the pharmaceutical sub-sector several years ago, held in Mexico City. As shown in the program above, there will be a high-level multistakeholder panel discussion on the adoption of MCP in the Philippines and a call for voluntary codes of business ethics from different sectors and players. 

Day 2 morning, there will be foreign speakers who will talk about global developments in regulating medicines promotion (Tim Reed, Executive Director, HAI Global), regional trends in ensuring transparency in pharmaceuticals policy (Klara Tisocki, Team Leader-Essential Medicines and Health Technology, WPRO), and the way forward for the Good Governance for Medicines (GGM) Program (Deirdre Dimancesco, WHO Geneva). 

In the afternoon, two special topics that have great impact on healthcare in the Philippines - health promotion and sustainable funding, will be discussed by speakers from  HealthJustice  and the AIM.

Participants will come from various sectors and represent all stakeholders in the dialogue about health, medicines and transparency.  They will have opportunities throughout the forum to participate in open forums, ask questions and articulate their positions and perspectives through the stakeholder workshop.

They will be given links to all forum documents, including studies and researches cited in the presentations, as well as reference materials on transparency, ethics in health, addressing corruption in health and related topics.

Meanwhile, I have changed the title of this thread from "Health Transprency" to simply "MeTA" as this thread is mainly about MeTA fora and activities.
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See also:
Health Transparency 11: MeTA Philippines and Multistakeholder Process, September 19, 2012 
Health Transparency 12: MeTA Philippines Dynamism, October 02, 2012 
Health Transparency 13: MeTA International Visit to Manila, April 16, 2013 
Health Transparency 14: IMS-CHAT Meeting, April 18, 2013, Friday, July 12, 2013 

Drug Price Control 36: Advisory Council, James Auste and China, July 12, 2013 
FDA 6: Business and Modernization Plan, July 17, 2013

Counterfeit Drugs 7: WHO, InterPol and IFPMA on SFFC

The spurious/falsely-labelled/falsified/counterfeit (SFFC) medicines or simply counterfeit medicines is a big public health problem. Patients who take such fake and/or substandard drugs will not experience improvement from their illness unless their immune system is strong enough. At worse, their condition might even worsen as the disease can mutate and evolve into something more complicated, and can even result to death.

While the more commonly faked medicines are those patented or newly-introduced ones and hence, are priced high, even cheaper but popular generic drugs are also counterfeited. The Department of Health (DOH) and the Food and Drug Administration (FDA) are also raising public awareness of this problem, like this DOH poster.

At the World Health Organization (WHO) website, this basic information is posted.

http://www.who.int/mediacentre/factsheets/fs275/en/

Medicines: spurious/falsely-labelled/ falsified/counterfeit (SFFC) medicines

Fact sheet N°275
May 2012

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Key facts

• Spurious/falsely-labelled/falsified/counterfeit (SFFC) medicines are medicines that are deliberately and fraudulently mislabelled with respect to identity and/or source.
• Use of SFFC medicines can result in treatment failure or even death.
• Public confidence in health systems may be eroded following use and/or detection of SFFC medicines.
• Both branded and generic products are subject to counterfeiting.
• All kinds of medicines have been counterfeited, from medicines for the treatment of life-threatening conditions to inexpensive generic versions of painkillers and antihistamines.
• SFFC medicines may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient or too much active ingredient, or with fake packaging.

Recently, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), based in Geneva like the WHO, produced a short video clip about the danger of SFFC medicines, Watch Out for False Friends.

Some of the points mentioned by the WHO above were reiterated there. It also highlighted that some 124 countries are impacted/affected by these fakes, and 532 products have been counterfeited. The longer, 3:30 minutes version, is found here.

These fakes that are dangerous to public health are being exposed by certain civil society organizations including the federation or association of pharma companies themselves, both innovator and generic. And there is a big role for the government here, when civil society effort are not enough and a bigger, wider network of government agencies, local and national, armed (the police) and non-armed, are needed. After all, the main function of government is to promulgate the rule of law, including the law against stealing the intellectual property of certain companies like trademark, patent and copyright.

The former Executive Director of PHAP, Reiner Gloor, wrote a paper about this subject a few months ago. He discussed the role of the Interpol, in coordination with country governments, drug manufacturers and civil society organizations, in battling this global crime. For instance,

In 2012, an Interpol-supported initiative spanning 100 countries aimed at disrupting the organized crime networks behind the illicit online sale of medicines, resulted in some 80 arrests and the seizure of 3.75 million units of counterfeit medicines worth $10.5 million.

Below is the article.
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http://www.bworldonline.com/content.php?section=Weekender&title=Interpol-in-fight-vs-fake-medicines&id=67608

Interpol in fight vs fake medicines

Medicine Cabinet -- Reiner W. Gloor

Posted on March 21, 2013 07:22:41 PM

FAKE MEDICINES are found everywhere in the world. Emerging economies like the Philippines, as well as highly developed countries with strong regulatory systems, have fallen victims to pharmaceutical counterfeiting.

In the Philippines, close coordination between the government and the pharmaceutical industry has resulted in the monitoring and seizure of counterfeit medicines in Metro Manila and some provinces. A multi-stakeholders alliance advocating patient safety called the Safe Medicines Network has also been established to help the government in the campaign against fake medicines.

Health Transparency 14: IMS-CHAT Meeting

The Coalition for Health Advocacy and Transparency (CHAT) is the umbrella organization of health and research NGOs and think tanks that gathered during the Medicines Transparency Alliance (MeTA)-sponsored CSOs Mapping in January 2009. Many of the health NGOs there are coalition themselves of other community and sectoral organizations. CHAT is affiliated with MeTA Philippines and is considered the civil society arm or partner of the latter.

Last week, April 12, 2013, the International MeTA Secretariat (IMS) had a half day meeting with NGO leaders that composed CHAT. About one-half of the organizations within CHAT were represented, good attendance. The IMS were composed of Tim Reed, Executive Director of Health Action International (HAI), Ms. Renee Vasbiner, Administrative Coordinator of MeTA Secretariat, also of HAI, and Ms. Deirdre Dimancesco. Technical Officer of Medicines, Access and Rational Use, Department of Essential Medicines and Health Products, WHO Geneva HQ. 

CHAT was led by former Bulacan Gov. Roberto "Obet" Pagdanganan and Cecile Sison of HealthWatch. Gov. Obet and Cecile are also the Chairman and Secretary General of MeTA Philippines, respectively. The big coalitions within CHAT are the Ayos na Gamot sa Abot-kayang Presyo (AGAP, or good medicines at affordable price), Cut the Cost Cut the Pain Network (3CPNet) and Medical Action Group (MAG), Woman Health, Health Action Information Network (HAIN) and COPAP, the organization of senior citizens. Everyone was given the floor to introduce themselves and the NGOs that they represent, what they do and who are their main constituency.

I introduced Minimal Government Thinkers, Inc. as an independent think tank advocating free market, less government, personal responsibility and rule of law. Our constituency are individuals and groups here and abroad, who read about any free market reforms in the country and in this case, in healthcare policies.

So we have some big NGOs and coalition of NGOs themselves that played very active roles in the enactment of the Cheaper Medicines Law of 2008 or RA 9502, groups and individuals that supported major amendments to the Intellectual Property Code (IPC) of the Philippines like institutionalizing compulsory licensing (CL) of certain patented medicines. And MG Thinkers that advocate respecting IPR as much as possible. So CHAT is a loose coalition and members recognize that.

One advantage, members say, is that there is wide range of discourse and policy options to choose when we discuss certain issues, so they benefit from such diversity of opinions and observations. But one disadvantage is that it is difficult to come up with a consensus stand or statement on some issues, like I advocate less government while many want more government involvement in healthcare. Or possible disagreement in the possible TRIPS Plus provision in the soon to be negotiated EU-Philippines Free Trade Agreement (FTA).

At this point, I spoke. I said that MG Thinkers' involvement in CHAT was a bit interesting. Many if not all of the groups that attended the CSO Mapping workshop were known groups in the IPR debate before RA 9502 was enacted into law. And I was not with them as I was writing many articles defending IPR and my articles were published in many countries like the US, UK, India, Malaysia, Singapore, Philippines, and even in some Arab countries, published in Arabic, courtesy of MG's international free market network.

That when Ms. Klara Tisocki, then of the EU and now with WHO Western Pacific Regional Office (WPRO) invited me to attend the CSO Mapping workshop in January 2009, she has read my name and my articles, and she must have wanted diversity, not monotony, of ideas among CSOs. Klara played a key role in the MeTA formation in the Philippines. And so CHAT was designed to have diversity, to allow some looseness in the umbrella organization. 

On the issue of IPR and medicines, Tim Reed of HAI showed a youtube video produced by HAI Global, about the "EU zoombies" as a result of EU insistence that stronger IPR protection on patented medicines be adopted in various EU negotiations for FTA with different countries.

Then some organization matters were discussed, like key activities for CHAT.

Last April 08, Monday or four days before the meeting with IMS, CHAT also held an internal meeting about issues to discuss. We devise a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis of CHAT. The matrix was shown and discussed by Atty. Paula "Pau" Tanguieng of AGAP. Good presentation, Pau.

It was a good meeting with the IMS, food was nice too.

I keep writing about these meetings and events as many CHAT and MeTA members tell me that although they may not agree with many of my ideas, they still look forward to my analysis, stories and photos. Just one proof that diversity is preferable to monotony. :-)

Cheers guys.
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See also:
Health Transparency 10: Depoliticizing Health, Corporatizing Government Hospitals, September 18, 2012
Health Transparency 11: MeTA Philippines and Multistakeholder Process, September 19, 2012 
Health Transparency 12: MeTA Philippines Dynamism, October 02, 2012 
Health Transparency 13: MeTA International Visit to Manila, April 16, 2013

PhilHealth Watch 15: Rising Claims for NCDs

Payment for the Philippine Health Insurance Corporation (PHIC or PhilHealth) is among the four mandatory monthly payments that people in the formal sector must accept. Meaning even if they are not satisfied with many government services, their monthly take home salary becomes smaller because of these mandatory deductions and forced contributions. The other three are SSS/GSIS, Pag-IBIG, and the withholding personal income tax.

Before tackling the costs and benefits of PhilHealth, here is an important situationer on healthcare in the Philippines in 2009, the latest available data.

Source: National Epidemiology Center, Department of Health; The 2009 Health Statistics

In red are non-infectious or non-communicable diseases (NCDs).  Diseases of the heart or cardiopathy include coronary heart disease, cardiovascular disease, heart failure, hypertensive heart disease, cardiomyopathy, and so on. Vascular diseases or more commonly called as “stroke” refer to brain dysfunction related to diseases of the blood vessels supplying the brain. Main cause is hypertension. Cancers, there are probably 200+ different types of cancer.

In terms of the main causes of morbidity, NCDs do not figure much, except hypertension. Infectious and communicable diseases are the top causes.

Despite these, the average lifespan of Filipinos is rising, 67 years and 73 years for male and female, respectively, or average of 70 years for both sexes. This is lower than the Asian average but higher than the global average.

Table 2. Selected Health Indicators, 2010

Source: WHO, http://www.who.int/gho/countries/phl.pdf

The cost of PhilHealth.

The budget of the Department of Health has shown huge increases recently. From only P18.91 B in 2008 to P31.83 B in 2011, then P42.08 B in 2012 and P53.06 B this year.  The big rise in recent years is due to increased premium payment for the DOH sponsored program for PhilHealth membership, some 5.2 million households were newly enrolled in PhilHealth. The  DOH budget is from taxes and other government revenues plus borrowings.  

PhilHealth spending does not come from taxes or borrowings. It comes from mandatory contributions of those in the formal sector, government and private, from individually-paying self-employed people, and from the DOH and LGUs who sponsor the annual premum of several million poor households.

LGUs also have their own healthcare programs for their poor residents, like having their own city or provincial hospitals, barangay/municipal/city health centers, and LGU payment and enrollment of some 5 million poor households to PhilHealth, meaning the LGUs paid for their annual premium. And other government agencies also provide free or cheap healthcare to the poor, like the Philippine General Hospital (PGH), AFP hospital, PNP hospital, and so on.

Mandatory contributions to PhilHealth are:

1. Formal/employed, from 2.5 to 3.0 percent of monthly salary

2. Sponsored program and informal non-poor, from P1,200 to P2,400 per year

3. OFWs, from P900 to P1,200 per year

4. Lifetime members/retired, none.

Benefits of PhilHealth.

People who get hospitalized due to serious diseases will worry less when the hospital bill comes. PhilHealth will pay for various services such as physicians’ fee, laboratory and diagnostic tests fee, hospital room fee, surgery if any, medicines, and so on.

Traditionally, PhilHealth covers only patients who are confined in accredited hospitals for at least 24 hours.  Meaning if the patient stays in the emergency room for 23 hours or less and go home afterwards, the corporation will not pay for any of the bill.

Recently, PhilHealth also pays for outpatient services for poor members through the primary care benefit (PCB) package.

In a presentation last April 10, 2013 at the MeTA Philippines forum held at the Asian Institute of Management, PhilHealth officials led by Dr. Riza Herrera and Dr. Liezel Lagrada discussed an update about the corporation’s packages 1 and 2. Among the striking facts in their presentation was the big jump in claims for four major NCDs from 2002 to 2012. Claims for  hypertension rose from 50,000+ to around 220,000; cancer-related claims rose also from 50,000+ to around 210,000; and heart diseases, from about 25,000 to around 110,000.

Figure 1. PhilHealth claims for four NCDs.

The above chart confirms the prevalence of NCDs as leading causes of death in the country, also worldwide.

In terms of actual payment for the same period, hypertension rose from P0.5 billion to around P3.6 billion; cancers rose from around P0.3 billion to around P1.8 billion.

Figure 2. Payment for Claims for four NCDs.

The plan of PhilHealth and the DOH, with signals from the UN and WHO, is to control NCDs.

The exchanges that followed the presentation were very lively and spontaneous as the audience came from various backgrounds – drugstore owners, drug manufacturers, academe, NGOs, health professional associations, DOH, PhilHealth and so on. Most of the questions,  comments and suggestions, explicitly or implicitly, were directed at how PhilHealth should further consolidate and centralize more healthcare delivery.

And this is where I do not agree. People should not expect too much from PhilHealth. More expectations, more disappointment. As mentioned above, there are other government agencies, local and national, that provide free or cheap healthcare for the poor even if they are not PhilHealth members and contributors. Then there are private foundations, charitable individuals, civil society groups like Rotary Clubs that conduct regular medical missions to the poor.

Limit PhilHealth Payment and Contribution.

PhilHealth must veer away from spending more  on outpatient services for NCDs. It must focus instead on infectious or communicable diseases, pediatric diseases. A patient who has dengue or malaria can easily be treated even if hospitalized for several days. After that the patient goes home and may not come back to the hospital and take PhilHealth claims for several years.

Contrast that to someone who has lung cancer due to over-smoking, or has liver cancer due to over-drinking, or fat and has various diseases of the heart due to over-eating and sedentary lifestyle. This type of patients will keep coming and coming for difficult and complicated treatment and maintenance medications. PhilHealth reserves can sink if not go bankrupt with more of this type of patients. Or PhilHealth will raise the premium from the current 3 percent to 5 percent or higher just to prevent bankruptcy.

The appropriate policy is to limit PhilHealth exposure to the former type of patients for outpatient services and primary care package. If people can have money to buy lots of alcohol or tobacco or fatty food and drinks, then they should have money also to buy private health insurance, on top of their PhilHealth insurance and DOH or LGU healthcare spending.

Let private providers of healthcare offer various packages at various premium payment for various people with various income. Those who are less responsible of their own body or their family should get more elaborate private health insurance. If they are poor, they can approach private charities, charitable individuals and friends, to cover for their funding gap.

Private healthcare providers are under pressure to produce good services to their clients, to satisfy their customers. If their customers are unhappy, they can go bankrupt. This pressure is absent in government healthcare providers because their funding comes from forced and mandatory payment. Even if the public are unhappy with their services, people are forced to contribute money to these agencies.

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See also:
PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
PhilHealth Watch 12: Assistance to Leptospirosis Patients, September 03, 2012
PhilHealth Watch 13: SHInES on Social Solidarity, November 26, 2012 

PhilHealth Watch 14: Not Yet 85 Percent Coverage, January 10, 2013