Global Insight Perspective | |
Significance | The Quality Affordable Medicine Act—commonly known as the "Cheap Medicines Bill"—has been approved by the Senate, and is awaiting approval from the House of Representatives, which is likely to make its decision this week. |
Implications | The bill contains a number of measures that are aimed at lowering the price of drugs and promoting the country's local pharmaceuticals industry at the expense of multinationals. These include restricting originator companies' ability to apply for "new use" patents for previously patented drugs and removing restrictions on parallel imports. |
Outlook | If approved by the House of Representative, the bill is likely to lead to a fundamental shake-up of the Philippines' pharmaceutical market, which has long been dominated by multinationals. |
The Quality Affordable Medicine Act—commonly known as the "Cheap Medicines Bill"—was finally approved by the Senate last week, reports the Manila Standard. The bill contains a number of provisions that are geared towards lowering the price of drugs and giving domestic Philippine companies a larger stake in the country's pharmaceuticals market. Specific measures include allowing companies to manufacture a drug once its primary patent has expired, and amending the intellectual property code to allow parallel imports by the government (see Philippines: 25 July 2007: Fate of Cheap Medicines Bill in the Philippines Lies in the Balance). In order to prevent an increase in the number of fake or substandard imports, the bill also contains measures to strengthen the Bureau of Food and Drugs (BFAD). These include allowing the BFAD to retain the fees that it receives, which would be used to increase its resources.
The main author of the bill is Senator Mar Roxas, chairman of the Senate's Committee on Trade and Commerce, who has criticised the fact that multinational pharmaceutical companies file for new patents for each demonstrable "new use" of previously patented drugs. The new bill not only outlaws this practice, but also adopts the so-called "early working" principle, whereby generic companies will be allowed to conduct tests on generic versions of a medicine before its patent expires. This would enable generic manufacturers to launch their products immediately once the originator drug's patent has expired.
The Committee on Trade and Commerce also made a number of additional recommendations, as follows:
- The Generics Law should be modified to forbid brand names being included on doctor prescriptions.
- Drug outlets should be obliged to inform consumers of all drugs products that carry the same generic ingredient in order to provide consumers with a choice.
The existing version of the Generics Law, originally enacted in 1988, specifies that "the brand name may be included [on prescriptions] if so desired".
Outlook and Implications
As things stand, multinationals account for at least 60% the Philippine drug market, which is estimated to be worth around 85-100 billion pesos (US$1.9-2.2 billion) per year. According to figures from the Philippine Senate Committee on Trade and Commerce, although the leading player in 2002 was the local company United Laboratories with sales of 12.2 billion pesos, most other leading players were foreign. These include GlaxoSmithKline (U.K.; 6.6 billion pesos), Pfizer (U.S.; 4.3 billion pesos), and Wyeth (U.S.; 3.6 billion pesos). Meanwhile, the only other Philippine company in the top 20 is 19th-ranked Pascual Laboratories, with sales in 2002 of 1.05 billion pesos.
The Cheap Medicines Bill has polarised opinion in the Philippines, with supporters claiming that drugs are seriously overpriced and the drug industry claiming that the lowering of drug prices would lead to an influx of low-quality or fake drugs (see Philippines: 7 August 2007: Health Professionals Rally Support for Philippines' Cheap Medicines Bill). If approved by the House of Representatives, which is due to make its decision this week before going on a month-long recess, the bill is likely to lead to a deep-rooted shake-up of the country's pharmaceuticals market.