Loren's gripes on the Cheaper Medicine Law: 100% politics

 When diplomacy is set aside and the politicians’ verbal weapons’ trajectories are pointing below the belt, we should know election season has finally arrived. This is a season where, probably, TV outfits’ own produced reality shows must take a backseat as politicians wash their opponents’ dirty linens in full view of the general public.

Taking a different approach, Vice President wannabe Sen. Loren Legarda is pouncing on her double-digit leading nemesis Sen. Mar Roxas on his allegedly deplorable role in watering down a bill he proudly call his milestone achievement, the Universally Accessible Cheaper and Quality Medicines Act of 2008 (UACQMA) or concisely, the Cheaper Medicine Law.   Allegedly, had it not been for Sen. Roxas’ sinister efforts of tearing down the original version, prices of all medicines (not just about 20) right now should have been lowered across the board.      

Indeed, it is common knowledge that a bill goes through the proverbial “eye of the needle” before it becomes a law. Some bills are not even fortunate as some lawmakers tie them before the drafts accelerate through the runway. Terribly, to those bills that luckily went through, the implementation had always been lackadaisical.

As basic as medicine and as hot an issue for Sen. Legarda (on his gripes against Sen. Roxas), let us take a look at the two laws, the Generic Drugs Act (GDA), and the UACQMA that are purposely passed to make this commodity more affordable. On the surface, the GDA would seem to be the panacea of our medicine-related woes. Rightly so, because branded medicines are expensive, not necessarily for its intrinsic value but due to excessive spending on promotions, advertising and marketing activities. These cost components account for more than half the price of the drugs. Apart from avoiding these costs, the administrative expenses of the manufacturers of generic drugs (generics for brevity) will also pale in comparison to the salaries of the executives of the multinational companies. These avoidable costs set aside, prices of generics should be just a small fraction of the branded ones.

True enough, prices of generics are low.  Despite its affordability, however, patronage remained surprisingly low too. Some took the prices as suspiciously low and saw generics as poorly manufactured. Others felt that brand names represent responsibility or ownership. Therefore, when something untoward happens, there is a prestigious company to run after for claims. Unfortunately, generics are widely viewed as substandard. 

However, before conclusions can be drawn out of these countless perceptions, the cheaper medicine bill was passed. It was never easy for this bill to pass. It can be remembered that the doctors were up in arms against the House of Representatives’ version’s “generic only” provision. Lest we must forget that during the deliberation of this bill, doctors threatened to go on a “hospital holiday” if the cheaper medicine bill, which only requires drugs’ generic names in the prescription pad, will pass congress and be signed into law. The main complaint they advanced was the prohibition in indicating the drugs’ brand in the prescription pad. They strongly asserted that patients might vent their ire on them if the generics or the brands the patients bought didn’t work well for them. 

Apart from the much doctor-maligned “generic only” provision, the House of Representatives also insisted on the creation of an independent price regulation board composed of government and private sector representatives. 

When the bill was approved on June 6, 2008 (now known as Republic Act 9502, “Universally Accessible Cheaper and Quality Medicines Act of 2008”), we saw the law acceding to the doctors’ demand with the insertion that the doctors may indicate brand names in the prescription pads. 

On the other hand, the House of Representatives’ proposal to create an independent price regulation board was dropped. Instead, under Section 18 of the aforementioned law, the Secretary of the Department of Health (DOH) is given the authority to monitor prices of drugs and medicines. Same act mandated that the DOH Secretary should “establish and initiate a price monitoring and regulation system for drugs and medicines within one hundred twenty (120) days after the enactment of this Act”. However, Executive Order No. 821, the order that prescribes the Maximum Retail Price of Drugs (MRPD) for selected drugs and medicines was only issued on July 27, 2009 and took effect on August 15, 2009.

In determining the MRDP, the DOH Secretary, considered, among others, the following: “ (a) Retail prices of drugs and medicines that are subject to regulation in the Philippines and in other countries; (b) The supply available in the market; (c) The cost to the manufacturer, importer, trader, distributor, wholesaler or retailer of the following, but not limited to: (i) The exchange rate of the peso to the foreign currency with which the drug or any of its component, ingredient or raw material was paid for; (ii) Any change in the amortization cost of machinery brought about by any change in the exchange rate of the peso to the foreign currency with which the machinery was bought through credit facilities; (iii) Any change in the cost of labor brought about by a change in minimum wage; or (iv) Any change in the cost of transporting or distributing the medicines to the area of destination”.

With these factors considered, the DOH Secretary enthusiastically announced that prices of the leading brands maybe reduced by about 50%. As expected, hospitals were taking the announcement impolitely. Though long overdue, hospitals were again asking for an extension or postponement of such reduction. In fact, they threatened again to go on a ‘hospital holiday”. Despite the assurances that they will be reimbursed by the drug companies, they tried to condition the minds of their employees that salaries may not be paid because of the losses they may suffer from the price cut.   Worst, through the Private Hospitals Association of the Philippines (PHAP), they asserted that they “will increase their administrative fees to recoup the losses incurred from the medicine price cuts”.   They further claimed to resort to it because they need “to cover the rebates that drug companies have not yet given” them. For all intents and purposes, they were trying to impress upon us that their hospitals’ sustenance largely depends on pharmacy sales.

First and foremost, PHAP’s claims were either wrongly raised or baseless. On one hand, the reimbursements concerns from the drug companies were issues that they should settle among themselves. It is entirely farcical for the consumers to be burdened of the costs resulting from their disagreements. On the other hand, it is entirely baseless that they will go bankrupt because of the price cut. It is highly preposterous to impress upon us that their hospitals’ future entirely rest on pharmacy sales. It is of common knowledge that most patients do not buy medicines from hospitals because theirs are usuriously priced. They really make money from hospital services, like room accommodations, laboratory fees, etc.

With these facts on hand, it is very palpable that whatever laws passed, affected major players (in this law, drug companies and hospitals) will always make their ways rule. So that, if it is snagged in its implementation, the authors crafting it shouldn’t be faulted, the implementing agencies should.

Frankly, therefore, whatever rants Sen. Legarda may have now on issues she could have raised in the senate (where she is very much part of) during deliberations, are no “honest-to-goodness” concerns. These are purely and straightforwardly political.

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