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hilippines’ President Gloria Macapagal-Arroyo has been summoned to a Senate committee today to face charges that she has agreed a secret deal with multinational drugmakers which overturns plans to curb the prices of the country’s most widely-prescribed drugs.

Senator Manuel Roxas, who chairs the Senate Oversight Committee on Affordable Medicines, has called for the President and a number of her Cabinet colleagues to explain to the panel what went on during “her confidential meeting with representatives of multinational drug companies on July 8.”

That meeting was attended by representatives of Pfizer, Roche, the Philippine Chamber of the Pharmaceutical Industry and the Pharmaceutical and Healthcare Association of the Philippines (PHAP), among others. According to Sen Roxas, they had asked to meet the President in order to stop her from signing an executive order which would authorize the setting of Maximum Retail Prices (MRPs) on 22 widely-prescribed, essential drugs.

The Cheaper Medicines Law, which Pres Arroyo signed last year, requires her to issue a list of MRPs for essential drugs, based on recommendations by the Department of Health. On June 10, the Department issued its recommendations, calling for the prices of the 22 most-prescribed drugs to be reduced by 50%.

Sen Roxas claims that, at the July 8 meeting, the President agreed to drop this provision if the companies could devise their own way of lowering prices before her State of the Nation Address, scheduled for July 27.

Two Cabinet officials who have also been summoned before the Senate panel, Health Secretary Francisco Duque and Trade Secretary Peter Favila, agree that the meeting with the industry leaders did take place but deny that it was held in secret or that there was any “conspiracy.”

Pres Arroyo had told the companies to come up with a proposal to bring down the prices of the most widely-prescribed medicines by July 18, said Mr Duque. Mr Favila added that, after the requirements of the Cheaper Medicines Law and the companies’ position were discussed, government officials did ask the drugmakers if they were willing to accept a “voluntary compliance” solution, under which they should issue a letter of undertaking (LOU) by July 18, committing them to cutting prices by 50% or more.

As the companies agreed to do so, the executive order authorising the MRPs will no longer be required unless the firms’ price-cutting proposals prove unsatisfactory, in which case the President will sign the order, said the ministers. Mr Duque, who said he will be attending the Senate hearing on Monday, added that the government would “appreciate” it if the list of 50% price cuts produced by the companies included more than the 22 drugs currently on the list, and he denied claims by both government critics that these actions were being taken to delay implementation of the law and also those by some drugmakers that they had not been consulted while it was being drawn up.

In a statement on the meeting, the PHAP said that the sector representatives have given assurances “that the industry is committed to cooperate in the implementation of measures that would create greater impact and bring more benefits to Filipino patients."

The meeting was reportedly brokered by the presidential adviser on international competitiveness, Roberto Romulo, who is also chairman of the Zuellig Family Foundation. Zuellig Pharma controls around 80% of the Philippines’ wholesale pharmaceutical market.

In a statement, Mr Romulo said that the setting of drug price ceilings “sends the wrong message to the international business community regarding the commitment of our nation to a free-market economy and intellectual property rights and will discourage job-producing foreign direct investment.”

The right way to cut the cost of all medicines is through encouraging “increased manufacture and sale of generic drugs and working with pharmaceutical companies to get them to voluntarily reduce the price of drugs to manufacture generics in the Philippines,” he added.