Global Insight Perspective | |
Significance | The Quality Affordable Medicines Bill (commonly known as the Cheaper Medicines Bill) has finally been passed into law in the Philippines, after months of deliberation. As its name suggests, it introduces a number of measures aimed at making quality medicines available at affordable prices. |
Implications | Research-based multinational drug companies had campaigned vigorously against the new law, which allows parallel imports of patent drugs and allows generic manufacturers to test, register and produce drugs prior to a patent's expiry. |
Outlook | The new law will bring heavy pressure on research-based multinationals to reduce their prices in order to stay competitive in the face of increased low-priced competition. |
According to Agence France Presse (AFP), the new law—whose full name is the Quality Affordable Medicines Law—was warmly welcomed by President Gloria Macapagal-Arroyo, who referred to it as a "major milestone". The law introduces the following measures:
- Generics manufacturers will be permitted to test, register and produce drugs prior to the expiry of a patent (which normally lasts 20 years).
- Parallel imports of patent drugs will be permitted in cases where drugs are sold at lower prices in other countries than in the Philippines. All imports must be approved by the Bureau of Food and Drugs (BFD).
- A "non-discriminatory clause" requires drug stores to carry a range of competitive products, in order to prevent multinationals from pushing retailers into stocking only their own products.
- A new "price monitoring and control mechanism" will enable the Ministry of Health (MoH) to set maximum prices for medicines.
Following its approval, Senator Mar Roxas, who was one of the principal authors of the new law, confidently predicted that it would bring "increased competition that will lead towards a lowering of prices as well as assuring quality medicines". Roxas has also proposed to give immediate impetus to the new law by establishing a 1-billion-peso (US$23.7 million) special fund to purchase quality drugs from India.
Outlook and Implications
Proponents of the Quality Affordable Medicines Law had to overcome a long series of hurdles in order to get the law passed, even after it was approved by the Senate in October (see Philippines: 8 October 2007: Senate Approves Philippine Cheap Medicines Bill). Subsequently, it was also approved by the House of Representatives, but was then blocked by the Bicameral Conference Committee. The key sticking point was a debate over whether or not doctors should be required to issue prescriptions only using the generic name of a drug (see Philippines: 14 April 2008: Prescriptions Should Include Both Generic and Brand Name, Suggests Philippine President). Ultimately, a compromise was reached, whereby all sides agreed that the issue of generic prescribing could be addressed in a separate bill.
Approval of the new Law represents a big blow to research-based multinational drug companies, with U.S. companies in particular having lobbied strongly against it. With the notable exception of United Laboratories, the Philippines drug market is dominated by foreign manufacturers, including GlaxoSmithKline (U.K.; GSK), Pfizer (U.S.) and Wyeth (U.S.).
For the Philippine government, the new Law constitutes just one of series of measures currently being undertaken to combat rising prices in a number of sectors, notably food and fuel. The government had thrown its full weight into ensuring that the Law was passed before Labour Day, which takes place on 1 May.