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Drug makers warn vs price caps on meds

MANILA, Philippines — The Pharmaceutical and Healthcare Association of the Philippines (PHAP) on Monday said it would comply with President Rodrigo Duterte’s executive order imposing a price cap on over a hundred medicines, even as it warned that the regulation would just “result in higher prices.”

PHAP said that while it has not received the official copy of the order on the maximum retail price of medicines, the Department of Health’s (DOH) earlier proposal showed this would not benefit the public as much as intended.

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“[It] would cap prices at the manufacturers’ level but increase the margins of retailers, which would actually result in higher prices, a contradiction between the objective and the implementation,” PHAP said in a statement.

“PHAP shares the objective of lowering medicine prices but appeals to the government to consider bulk procurement and price negotiation as the more sustainable and beneficial approach,” it added.

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The DOH proposed a price cap for 122 medicines used for chronic ailments, such as hypertension, diabetes and cancer, given that it has been a decade since the list of drugs covered by the maximum drug retail price was updated.

‘Lack of supply’

PHAP argued that global experience showed that price caps only “result in market inefficiencies and lack of supply.”

Instead, it offered that manufacturers would reduce the price of 150 medicines used for 36 diseases by up to 75 percent. It also offered to provide a system where medicines will not be left expired and wasted in warehouses.

Due to this development, PHAP warned that companies might review the sustainability of their operations in the country, including possible layoffs, “if reasonable profits are not realized.” This is why it urged the government to “closely monitor its impact on the pharmaceutical industry and the general public.”

But Malacañang on Monday said the executive order imposing a price cap on certain medicines would make access to affordable and quality drugs a reality.

Executive Order No. 104 covers 133 drug formulas or 86 drug molecules.

“Access to affordable and quality drugs and medicines is now a reality under the Duterte administration,” said presidential spokesperson Salvador Panelo.

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The EO imposes a maximum retail price or maximum wholesale price on drugs that address the health priorities of the general public, especially those that account for the leading causes of morbidity and mortality; those that have high price differentials compared to international prices; those that have limited competition; and those where the innovator product is the most expensive yet most prescribed or dispensed.

Drug resistance

“The government acknowledges that expensive health care, including costly medicines, pushes a significant number of Filipinos to poverty, discourages them from seeking the appropriate medical treatment, leads to drug and medicine resistance, as well as endangers lives, thereby increasing the morbidity and mortality rates across the different socioeconomic classes,” it said.

The maximum retail price would be imposed on all public and private retail outlets, including drugstores, hospitals, hospital pharmacies, health maintenance organizations, convenience stores, supermarkets, and the like.

The maximum wholesale price would be imposed on all manufacturers, wholesalers, traders, distributors, and the like.

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TAGS: drug price caps, PHAP, Pharmaceutical and Healthcare Association of the Philippines, Rodrigo Duterte
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