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Drug firm hit for ‘bribe’

Pfizer offer to Arroyo rejected

By Michael Lim Ubac
Philippine Daily Inquirer
First Posted 00:54:00 07/14/2009

Filed Under: Graft & Corruption, Health, Politics, Laws, Medicines

MANILA, Philippines?Several lawmakers on Monday accused Pfizer Philippines, a multinational drug company, of attempting to ?bribe? President Gloria Macapagal-Arroyo through the Department of Health (DoH) with five million ?sulit (discount) cards? to be distributed to indigent patients around the country.

At Monday?s hearing of the affordable medicines oversight committee, the lawmakers said the bribery attempt was apparently aimed at convincing Ms Arroyo not to sign an executive order, drafted last month by the DoH, that will cut drug prices in half.

?The fact is the [cheaper medicines] law was passed by Congress. For somebody to offer (the cards that) is already an indication that the purpose of the offer is to stop ? impede the enforcement of the law. I will tell you as a lawyer ? that is as an offer of bribe,? said Senate President Juan Ponce Enrile.

Enrile was reacting to the statement of Reiner Gloor, executive director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), who said that Pfizer?s offer was not a bribe. PHAP is an umbrella organization of 50 multinational drug companies.

?Even if it was offered to the secretary of health, then the same thing. It?s still the same carabao, a bribe,? Enrile said.

Neither the President nor Health Secretary Francisco Duque III has accepted Pfizer?s offer.

Sen. Manuel ?Mar? Roxas II and Palawan Rep. Antonio Alvarez, co-chairs of the oversight committee, called the hearing following Roxas? revelations on Friday that Ms Arroyo met with officials of giant pharmaceutical companies on July 8 ostensibly to block the implementation of the maximum retail price (MRP) on 22 essential medicines.

The law, championed by Roxas, increases the people?s access to cheaper medicines by imposing an MRP, which will slash drug prices in half.

Section. 17, Chapter 3 of the law says that ?The President of the Philippines, upon recommendation of the Secretary of the Department of Health, shall have the power to impose maximum retail prices over any or all drugs and medicines as enumerated in Section 23.?

Huge savings

Roxas said Gloor and other representatives of pharmaceutical firms could not stop the government from implementing the MRP, which covers maintenance medicines for those suffering from hypertension (Norvasc), diabetes (Diamicron) and high cholesterol (Lipitor).

Roxas said 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 Payless instant noodles every day.

This will translate to a saving of P7,920 a year, he said.

Sen. Alan Peter Cayetano noted that Norvasc cost P7 in India. Pharex retails a generic version (5 mg) in the Philippines at P11.

For Lipitor (10 mg), a saving of P31.25 (from P62.50 to P31.25) will allow families to buy a kilo of rice, a can of sardines and four packs of noodles; Diamicron (80 mg) with a saving of P7.40 (from P14.75 to P7.35), diabetic patients can still buy a pack of noodles. [Ritemed?s generic version of Diamicron sells for only P5.85.]

Buying Ciprobay (500 mg), an antibiotic, from P79.15 to P39.57, will result in a saving of P39.58 that will allow patients to buy one and one-fourth kg of rice, three cans of sardines, six packs of noodles, one-third kg of fresh tilapia and one-fourth chicken.

?Even if we follow the draft MRP, which gives us 50 percent off the present price, the price will still give much profit to drug companies and is still too stiff,? Cayetano said, adding that the proposed MRP list did not contain other essential drugs like Bentolin inhaler for asthmatic.

10-day deadline

Akbayan party-list Rep. Risa Baraquel said Pfizer had offered five million discount cards to Ms Arroyo to ?block the implementation of the maximum retail price.?

Baraquel said the DoH drafted the executive order on MRP as early as June 10, but the President instead gave giant pharmaceutical firms 10 days to submit alternative proposals to lower drug prices.

?Gloor himself confirmed this (offer) not only during the July 8 meeting with GMA (President Arroyo), but possibly during the advisory council meeting on cheaper medicines law? with Executive Secretary Eduardo Ermita, according to Baraquel.

?That constitutes bribery because the offer was made during the period when the executive order is about to be signed, and the one who made the offer was a company to be affected by ? the MRP,? Baraquel said.

Discriminatory

The discount cards are already being distributed by Pfizer to select drugstores and clients but only cover Pfizer medicines, said the Akbayan lawmaker.

Baraquel said the practice was discriminatory. ?If they can absorb a profit cut through sulit cards, why can?t they implement an across the board decrease in drug prices so that everyone can avail [himself or herself] of it over the counter??

?If each of the five million (cardholders) buys one Norvasc at a 50-percent discount, Pfizer will lose P100 million (at P22 each per 5 mg) for this brand of drug alone,? she said.

Roxas said that the MRP did not violate agreements with the World Trade Organization and Intellectual Property Organization, and that price control was being practiced in 122 countries.

Ms Arroyo and her four Cabinet officials?Executive Secretary Eduardo Ermita, Health Secretary Francisco Duque, Trade Secretary Peter Favila and Budget Secretary Rolando Andaya Jr.?snubbed the summons of the committee.

When the hearing started, Roxas read a letter from Ermita saying the Palace officials could not attend the hearing because the Senate summon was only received on Friday. But Roxas pointed out that the presidential barcode showed that it was received on July 9.

Upon learning of the Ermita letter through a radio report, Duque and Favila later told a committee staff by phone that ?they have verbal instructions not to attend unless they have clearance to attend.?

?They (Duque and Favila) said they were en route ? but claimed they were stuck in traffic due to the rain. Suddenly, they (backed out),? Roxas said.

?Ballpen?

Summarizing the three-hour hearing, Roxas said what was established was the following?the unacted DoH recommendation to implement the MRP on June 10, the meeting of drug companies with Ermita on July 2 and with the President on July 8.

?The point is until now the President has not signed the executive order. When will she fulfill her promise to lower drug prices?? Roxas said.

?The lives of the people are at stake, not politics. You only need a ballpen, Mrs. President (to sign the EO),? he added.

Gloor insisted that price control would not work. He said the President, during the meeting, had given industry players 10 days to come up with an alternative to the MRP, otherwise she would sign the executive order.

Assistant Trade Secretary Lourdes Baua said the drug firms were proposing ?voluntary compliance,? but Roxas said the MRP was a ?provision in the law without limitations? and a ?complete tool kit ? to lower prices.?

Gloor said if industry players could voluntarily lower prices by 50 percent, then there would be no more need for price control.

Roxas told Gloor that the government was against gouging, price manipulation and monopolistic activities. With Inquirer Research



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