Forced to volunteer

The latest word out of the Department of Health is that the pharmaceutical industry in the Philippines has offered to voluntarily lower the prices of 42 branded medicines. The medicines fall under 16 of the 21 “essential drugs” categories that the DoH had recommended to President Gloria Macapagal-Arroyo for mandatory price capping under Republic Act 9502, also known as the Universally Accessible Cheaper and Quality Medicines Act.

It should be noted that the industry left out five essentials drugs (covering 26 branded medicines), but then, it is also voluntarily cutting the prices of 31 other medicines in 22 “add-ons” (outside the list of the 21 DoH-recommended drugs). Besides, according to Robert Louis So, program manager of the health department’s National Drug Policy Unit, the remaining five will be placed under the maximum drug retail price (MDRP). In other words, we can expect cuts in the prices of a total of 99 branded medicines and not just in 21 but 33 drug categories. And the price cuts will be fully felt starting Aug. 15.

So, it may be asked, why all the fuss about an executive order imposing mandatory price caps on drugs?

The pharmaceutical industry opposes mandatory price capping. In a letter to the editor, former Ambassador Roberto Romulo, now presidential adviser on international competitiveness and chair of Zuellig Family Foundation, cautioned that imposing price controls on a limited number of medicines “sends the wrong message to the international business community regarding the commitment of our nation to a free market economy and intellectual property rights (IPR), and it will discourage job-producing foreign direct investment in all business sectors.”

The warning seems to have unnerved Malacañang. After announcing last July 14 that the President was set to sign the order, Deputy Presidential Spokesperson Gary Olivar told reporters the following day that the implications of the MDRP on “investors’ sentiments abroad regarding the Philippines as an investment destination” would also be considered. But if the members of the World Trade Organization were sincere in adopting the “Doha Declaration on the TRIPS Agreement and Public Health,” such fears may be unfounded. The Doha Declaration affirms that “the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health.”

What is not being disputed is that access to affordable quality medicines is a universal humanitarian concern—even a basic human right; that the cost of medicines in the Philippines is the second highest in Asia; and that pharmaceutical companies have been selling “essential drugs”—for hypertension, diabetes, cancer, stroke, asthma and infection, 6 of the 10 leading causes of death in the country—at prices at least 70 percent higher than in other Asian countries.

If drug companies can afford to sell their medicines at cheaper prices in other countries, why not in the Philippines? Medicines are not luxury items. Every year, millions of people die from ravaging infectious diseases for lack of access to affordable life-saving drugs. As the United Kingdom’s trade secretary noted in a World Trade Organization gathering in December 2005, “The lack of access to essential medicines in developing countries is one of the biggest health issues—and one of the gravest injustices—in the world.” And one reason poor patients don’t have access to quality medicines is their prohibitive prices.

In other words, the moral imperative for the Philippine pharmaceutical firms to lower the prices of essential drugs has been staring them in the face all along. Olivar himself, who seems to share the free market and IPR concerns of the pharmaceutical industry, noted that drug companies could easily lower the prices of their products because of the industry’s low-cost operating expenses. But the fact is, they didn’t. Until Health Secretary Francisco Duque invoked mandatory price capping because he felt that seven months after the passage of RA 9502, competition was not working and the prices of expensive branded medicines had not gone down. It was only after the legal sword was raised that the industry offered to bring down the prices of essential medicines. In other words, it volunteered when it saw the MDRP order coming.

The President should proceed to sign the MDRP order, as a matter of policy, to include the “volunteered” 16. This won’t be to the liking of the industry, but for this, it has only itself to blame. –Philippine Daily Inquirer