MANILA, Philippines—Malacañang Tuesday warned private hospitals against imposing higher fees for their services to offset the effects of the cheaper medicines law, saying that to do so would invite tougher licensing and accreditation procedures against them.

Undersecretary Lorelei Fajardo said the government would be forced to tighten up on the renewal of licenses and accreditation if the private hospitals went ahead with their plan.

“We will be strict in renewing licenses, and remove their accreditation. But it doesn’t have to reach that point. We can resolve that by talking things out,” said Fajardo, the deputy presidential spokesperson, in a briefing.

The Department of Health (DoH) issues licenses to hospitals, while the Philippine Health Insurance Corp. (Philhealth) accredits them.

Some hospitals belonging to the Private Hospitals Association of the Philippines (PrHAP) had announced plans to increase fees purportedly to cover losses arising from implementation of Republic Act No. 9502 or an Act Providing for Cheaper and Quality Medicines.

The law, which cut by half the prices of 21 essential drugs, has forced them to sell the medicines at way below their purchase price, the hospitals claimed.

The DoH, for its part, said it was studying its “legal and regulatory” options against the hospitals should they hike their fees in response to the lower drug prices.

Health Undersecretary Alex Padilla said the fee hike by the hospitals would defeat the purpose of the government’s maximum drug retail price program.