Pharma giants blink, slash prices in half

Government should be as decisive in dealing with other sectors

THE P100-billion pharmaceutical market has been breached, and drug giants blinked.

For the first time, a well-entrenched industry has given up its formidable clout in getting a say on how much medicines should cost.

Any day now, President Gloria Arroyo will sign an executive order setting a maximum drug retail price (MDRP) on six to seven types of medicine most commonly prescribed.

Already, the Department of Health (DOH) announced on Friday that major pharmaceutical companies, dominated by foreign multinational companies, have “voluntarily” decided to slash prices.

Drugs subjected to a 50-percent voluntary price reduction includes 16 drug molecules (or 41 drug preparations) that were proposed by various multinational drug companies as an offshoot of the initial meeting and consultation with President Gloria Arroyo on July 8, 2009.

The drugs were selected on the basis of their impact in addressing diseases which are of great public health importance in the country, their high price differentials compared to drug prices internationally, lack of market access particularly for the poor and limited competition with their generic counterparts.

President Arroyo previously asked drug companies to submit their voluntary compliance to a reduction of the initial 21 drugs and medicines that were originally deemed for inclusion in the imposition of the MDRP.

“We are very pleased with the fast and encouraging response of the industry to the appeal of government to voluntarily reduce their drug prices by 50 percent.  In fact, we got more than what we bargained for because apart from the original list that we proposed, other drug companies offered voluntary price cuts in some of their leading products,” said Health Secretary Francisco Duque 3rd.

Eight pharmaceutical companies have agreed to also apply voluntary price reduction to 22 other molecules or 31 more products that were not in the MDRP list bringing the total number to 38 drug molecules (or 72 products).

These medicines are indicated against hypertension, diabetes, influenza, hypercholesterolemia, cancer, arthritis, goiter, allergies and infections.

Small- and medium-sized drug outlets with manual systems will be given until September 15 to comply with voluntary price reduction to enable them to reconcile and validate their inventories and adjust to the changes in drug prices.

Those that can already implement before this must already comply. After September 15, sanctions will be imposed on non-compliant retailers.

Alternative

An alternative to the MDRP is to comply voluntarily, with the Pharmaceutical and Healthcare Association of the Philippines (PHAP) wanting a formula it said benefits the bottom 70 percent of the population. The PHAP represents 50 multinational drug companies.

The MDRP “is not the best approach for patients to fully benefit since the initial MDRP list is limited to 22 products and may not include the commonly used medicines of the poor,” the PHAP said a statement.

According to the PHAP, the industry’s offer to voluntarily cut prices could reduce sales by as much as P7 billion to P10 billion a year, making it hard for smaller drug firms that produce and market three or four products to survive.

Sen. Manuel Roxas 2nd, co-chairman of the bicameral Quality and Affordable Medicines Oversight Committee, says lowering the price of Norvasc (5 mg), for instance, from the present P44.50 to P22.50 would give Filipinos extra money to buy half a kilo of rice, one can of sardines and three packs of instant noodles every day, or P7,920 a year.

The full and effective implementation is expected in two to three months and will slash, for example, the price of the anti-diabetic drug Diamicron from P14.75 to P7.35 and that of the antibiotic Zithromax from P298.75 to P149.37.

The price ceiling can be implemented if the government sees that public health is affected, if the prices of medicine in the Philippines are four to five times higher than those in other Asian countries, if the concerned products have only four generic counterparts and if the innovator or the original brand is the top-selling product.

The DOH is empowered to come up with a list of medicine that would be covered by the MDRP.

The prices of medicines will be reviewed quarterly to ensure the price cut.

The 21 medicines on the Health department list are the antihypertensive drugs amlopidine, telmi-sartan and irbesartan; antithrom-botic drug clopidogrel; anti-cholesterol drug atorvastatin; antidiabetic drug gliclazide; antibiotic drugs piperacillin + tazobactam, cipro-floxacin, azithromycin, metronidazole and co-amoxiclave; and the anticancer drugs bleomycin, car-boplatin, cisplatin, cyclophosphamide, cytarabine, doxorubicin, etoposide, mercaptopurine, methotrexate sodium and mesna. –PAUL M. ICAMINA Special Report Editor, Manila Times