Still no drug price cut executive order

MANILA, Philippines - President Arroyo has not yet signed the executive order mandating a 50 percent price cut on certain types of medicine.

However, Health Secretary Francisco Duque III said the reduction in the price of essential medicine will definitely take effect on Aug. 15. The Department of Health and pharmaceutical companies have agreed to implement the voluntary price cut in big drug stores on Aug. 15, he added.

Duque said six small and medium-sized drug outlets with manual systems are given until Sept. 15 to comply with the voluntary price reduction to enable them to reconcile and validate their inventories and adjust to the changes in prices.

Drug companies found violating the price cut will face a fine of not less than P1,000 to as high as P5,000, as well as suspension of their license to operate and product marketing authorization, he added.

The revocation of license and product marketing authorization will cost drug companies millions of pesos, according to Bureau of Food and Drugs (BFAD) director Nazarita Tacandong.

Duque said drug outlets will not be allowed to increase prices, except for justifiable reasons like devaluation of peso against the dollar.

Duque said 72 essential drugs are now in the list for voluntary 50 percent price reduction.

“We got more than we bargained for because apart from the original that we proposed, other drug companies offered voluntary cuts in their leading products,” he said.

Duque said eight pharmaceutical companies have agreed to voluntarily reduce the price of 22 preparations or 31 more products not in the Maximum Drug Retail Price (MDRP) list.

The 31 new drugs added on the list are for the treatment of hypertension, diabetes, influenza, hypercholesterolemia, cancer, arthritis, goiter, allergies and infection, he added.

The DOH has initially listed 21 branded essential pharmaceutical products under the MDRP.

But drug companies agreed to extend the 50 percent price reduction initially to 23 then 31 more products.

Reduction on the retail price of the 31 products ranges from 10 to 15 percent.

Dr. Robert So, DOH Pharmaceutical Management Unit (PMU) program manager, said although the cut price will be imposed to only 72 essential medicine, the reduction covers about P10 billion or one-tenth of the entire P100 billion drug industry.

“If we will look at the medicines under the MDRP list they are the most expensive and those that are really needed,” he said.

The MDRP list does not also include anti-TB drugs and other medication being distributed for free under the different DOH programs, So said in reaction to criticisms that the MDRP would provide a minimal impact.

Edward Isaac, Philippine Chamber of Pharmaceutical Industry (PCPI), president said member companies will be severely affected because they will be also forced to cut down the price of generic drugs.

“We have to lower our already affordable generic products to be competitive with branded ones that would cost 50 percent cheaper,” he said.

Reiner Gloor, Pharmaceutical Healthcare Association of the Philippines (PHAP) president, said it is too early to assess the impact of the MDRP on the financial condition of drug companies.

However, small drug companies that carry only one or two preparations would suffer from the price cut, he added.

However, Duque said the negative impact on pharmaceutical companies would only be temporary since people would be buying more products as a result of the price cut.

“It’s just a transition stage,” he said.

“What is important is that more people will benefit by making affordable drugs accessible to the marginalized sector who need it more.”

The price cut was not a unilateral decision of the DOH, but a broad consensus of the pharmaceutical industry, Duque said.