lans by the Philippines to curb the prices of at least 22 widely-used prescription drugs will harm the country’s investment prospects, multinational drugmakers have warned President Gloria Macapagal Arroyo.
She is due to sign an executive order following a decision by the Health Department that Maximum Retail Prices (MRPs) should be set for the drugs, under the Universally Accessible Cheaper and Quality Medicines Act of 2008. However, in a letter to the President, leaders of overseas industries operating in the Philippines warn her that “the use of price controls in any industry can become counterproductive, discourage existing and future investors in all industries, and potentially lead to price controls over other industries or products which will no doubt send the wrong signals to potential investors outside of the Philippines.”
The business leaders assure Pres Arroyo that they support her government’s efforts to make medicines more affordable and they acknowledge that MRPs can be imposed under the 2008 law. “However, we believe that imposing a MRP may no longer be needed to achieve the goal of lowering prices of medicines in the Philippines. Market forces have already achieved a significant reduction in medicine prices. There is also a growing proliferation of cheaper generic alternatives in the market, and selected companies have voluntarily reduced prices, either through patient care programmes or outright price reductions,” says the letter, which was signed by the heads of the US, European, Japanese, Korean, Australian and New Zealand Chambers of Commerce in the country, plus the Philippine Association of Multinational Companies.
The Pharmaceutical and Healthcare Association of the Philippines (PHAP), which represents the local industry, agrees that MRPs are unnecessary, given the current and growing levels of market competition, and warns that they will discourage firms from introducing new products into the country. PHAP has recently raised its expectations for growth by local drugmakers this year from 7% to 12%, driven by the market entry of increasing numbers of generics due to patent expiries, and says that, in contrast, the multinationals will see their revenues for 2009 grow by no more than 4%.
In their letter to the president, the foreign chambers of commerce also point out that, according to IMS data, the revenues of local drugmakers rose 15% last year while those of the multinationals were up only 7%.
Discount schemes slammed
Meantime, the patient care programmes to which the joint business chambers refer in their letter are proving controversial, with critics claiming that Pfizer’s Sulit (“worth the money”) discount cards, for example, are “usually” only given out to patients being treated in “expensive” hospitals and are therefore inaccessible to the vast majority of people.
Moreover, people who use Pfizer’s 50% discount card must forfeit their rights to other assistance programmes, according to the publication Business Monitor, which notes that “in very, very fine print” on the packet containing the Pfizer card it is stated that “the card shall not be used with any other discount privileges, eg, Senior Citizen Card.”