Business analyst sees growth of PH pharma industry in 2020
MANILA, Philippines – The pharmaceutical industry and market in the Philippines are expected to be vibrant in 2020 even if the government intends to cut down prices of imported medicines, a business analytics group said on Thursday.
Fitch Solutions said in its industry trend analysis report that while President Rodrigo Duterte’s willingness to sign an executive order (EO) mandating a maximum drug retail price (MDRP) puts pressure on multi-national pharmaceutical companies, it would be good for the market in the long run.
Under the proposed EO that the Department of Health (DOH) has drafted, prices of 120 high-cost medicines used to treat hypertension, diabetes, heart disease, chronic lung diseases, and major cancers would be trimmed down to ease the burden on the public, especially the poor sectors.
The DOH is looking to cut prices by as much as 56 percent for some medicines.
“The Pharmaceutical Healthcare Association of the Philippines (PHAP) which represents the interests of R&D-based firms, objected to the scheme, warning that it could negatively impact small retailers and force manufacturers to reconsider plans to launch new medicine in the country,” Fitch Solutions said.
“It could also lead to pharmaceutical companies withdrawing existing products, which would harm the public. Over the longer term, with higher volume sales and greater competition in the market, these price controls could be positive for the market,” they added.
READ: DOH drafting order to lower prices of expensive medicines
READ: DOH eyes price reduction of 120 high-cost medicines
According to Fitch Solutions, the lower prices of medicines would mean that more patients can have them — therefore increasing demand, which is a condition that would attract more suppliers to the country.
“If patients and other payers are attracted to the new lower-priced pharmaceuticals, greater demand should attract more suppliers to the Philippine market, which is often overlooked by firms seeking opportunities in Asia Pacific,” the company said.
The ability to purchase medicines has been a problem for a lot of Filipinos, largely due to most families’ financial statuses. Recent studies from DOH said that 99 percent of Filipinos cannot purchase all the drugs prescribed to them because of their high costs.
A December 2019 report showed that only two out of three Filipinos are able to get the five different drugs prescribed to them. But of that figure, 33 percent said that they were only able to purchase medicines that would last for less than a week, while only four percent can get prescription drugs that would last within two weeks to a month.
This study was also cited by DOH as a pressing reason to push through with the MDRP, something that President Rodrigo Duterte also supported.
READ: 99 percent of Filipinos can’t afford prescription drugs, says survey
But aside from the lower drug costs, Fitch Solutions also said that another reason why the country’s pharmaceutical industry is vibrant is the implementation of generic medicine substitution policies.
“Health authorities have also begun to take steps towards employing generic substitution policies. Over the longer term, as is common throughout the Asia region, market growth will decelerate due to increasing cost-containment and initiatives to improve the cost-efficiency of pharmaceutical spending,” Fitch said.
“An increasing focus on cost-effective expenditure will further promote generic substitution rhetoric. As such, generic medicine sales growth will outperform overall market growth over the long term,” it added.
