Headway, hitches in drive for cheap drugs - Gotcha

Public clamor for cheap medicine is bearing fruit. United Lab, the biggest Filipino drug maker, has cut prices of its hottest-selling items by 10 to 40 percent. The products are essential or life-saving drugs in health officials' lists, mainly for respiratory tract infection and tuberculosis.

Health workers hailed Unilab's move as crucial in influencing other Filipino drug makers to cut prices. Poor Filipinos with respiratory ills no longer buy prescribed medicines because of prohibitive costs. They spend meager wages on food instead, but in the process infect their families and communities. That's why entire barrios suffer from ailments ranging from whooping cough to TB, the country's top killer-disease.

The headway among Filipino drug makers has yet to be matched by multinational manufacturers and distributors who outnumber them five to one. Foreign companies are lobbying against government's importation in June of the 10 most-prescribed drugs from India, where these are seven to 17 times cheaper. Oblivious of effects of high medicine costs on public health, they argue that the imports would violate patent rules.

The trade and health departments have withstood pressures so far. But they have blocked off only P500 million for the imports, a mere one percent of RP's annual drug consumption. With that miniscule amount, foreign drug makers will hardly feel the dent on their market control. Advocates of Indian imports are wondering why they're carping at all.

In a related front, minority owners of another giant manufacturer are demanding that Swiss majority owners pay them P300 million for salting away company profits through sweetheart deals. Necisto Sytengco and small investors in publicly-listed Interphil Laboratories are asking the Securities & Exchange Commission to resolve once and for all three related suits they filed last year against Zuellig Group. Interphil is set to hold its annual stockholders meeting in June. Sytengco and partners, including Government Service Insurance System, want SEC decisions before that time. The cases have dragged far too long because of technical delays and frequent reshuffling of SEC hearing officers.

The cases have to do with minority rights against Zuellig's 70-percent stranglehold. But they have a bearing on drug pricing, and the way GSIS members' money is being invested in supposedly blue-chip but dismal companies.

One suit alleges that Zuellig-appointed Interphil managers signed away huge management, insurance and warehousing contracts to their mother-Group. Sytengco and GSIS maintain that because of the contracts worth P300 million, Interphil hardly posts yearend profits. Yet Interphil is RP's biggest toll manufacturer; it mixes and packages 90 percent of all drugs sold by foreign and local firms. And its toll-manufacturing rates are among the highest in Asia, one reason for high medicine costs.

Another suit concerns the board seat that GSIS lost last year. GSIS had borrowed enough proxies from Sytengco to command a seat, but the Zuellig-controlled stockholders meeting did not nominate its nominee. Zuellig instead put in its own man. GSIS managers say they'd been had because their nominee never received a notice of the stockholders meeting. But 1.5 million members aligned with Philippine Government Employees Association are not taking any chances this year. Some PGEA officers will monitor the proceedings to ensure that GSIS managers dutifully fight for the seat which can put them in a position to influence drug pricing for the benefit of GSIS members and 7.5 million dependents. They also want GSIS to put up a kitty with Social Security System, AFP-Retirement & Separation Benefit System, and other state-run provident mutual funds to buy out Zuellig Group. That way, they can run Interphil at a modest profit for members yet at the same time pull down medicine prices.

The third suit concerns the right of minority owners to inspect and audit their company's book of accounts. SEC ironically had ruled that Sytengco and partners pay for the audit themselves, which they did despite being owners. But on the day the came armed with a SEC order to open Interphil's books, Zuellig managers stopped them at the door. SEC has yet to declare Zuellig in contempt of its order. Sytengco and fellow-minority owners see in the case a test of the new SEC leadership's resolve to compel publicly-listed firms to disclose their financial dealings. But health workers have taken interest in the case. Militants among them see in it a test of government's resolve to look at how foreigners put price tags on drug making and distribution, with the aim of reforms.

Agriculture Sec. Ed Angara reportedly aims for fish self-sufficiency by the end of Joseph Estrada's term. It's easier said than done, he knows. As Angara's department attempts to feed the multitude by multiplying fish yield, he is also tempering his efforts through judicious use of aquatic resources with conservation in mind. That's why he has a Fisheries Resource Management Project, an oversight team of sorts that monitors depletion of marine life.

Angara has convinced the Development Bank of the Philippines to block off P1 billion for loans to refleet commercial fishing firms. This is in addition to a $100-million grant from Spain for the same purpose.

But agriculture officials know that refleeting must not lead to illegal and wasteful fishing methods. FRMP managers are wary of what can happen. Over 95 percent of coral reefs have been destroyed. Over 4,000 hectares of mangrove -- natural fish nurseries -- are cut down each year. The number of commercial fishing boats increased by 3,416 in 1998. They invade shallow waters despite a law that bars them from entering the 15-km municipal zone for subsistent fishermen.

Angara's dilemma is akin to the problem of huge dams. Europe and the US went into a dam-building binge in the early 1900s to transform deserts into cities and farms. Los Angeles and Las Vegas and the huge food bowls around them would not have sprouted if not for Hoover Dam's taming of the Colorado River. Uzbekistan will not be producing cotton today by the millions of hectares if not for dam diversion of Amu Darya (River) and Syr Darya.

Water experts are finding out, however, that such great irrigation and electrification projects destroyed marine life in the rivers, and the lakes and seas to and from which they flow. Without advocating nuclear plants, they point out that great dams had ruined more flora and fauna than disasters like Chernobyl and Three-Mile Island.

It was a faustian bargain between civilization and nature in those years. For Angara, it's a new faustian dilemma between food on the poor family's dinner table today and no food at all ten years from now.

INTERACTION. Barry Saglit, Malabon: Part of Mindanao's history (Gotcha, 15 May 2000) are ARMM and SPCPD, which Muslim warlords have controlled to the detriment of Muslims and Christians alike.

Mary Rampas, QC: I doubt if our mayor and police chief read the papers. The day you wrote about illegal sidewalk vendors along Commonwealth Ave. (Gotcha, 10 May 2000), there were more of them than ever on both sides of the national road. Groan.

Jejomar Binay, MMDA chairman: Sincerest gratitude for mentioning me as one of the possible professional negotiators to deal with the hostage crisis involving Abu Sayyaf (Gotcha, 8 May 2000). Still, I don't agree that the wave of clashes between government troops and insurgents is an attempt to deflect public attention from problems confronting the government.

Vivencio Fajardo, Baras, Rizal: A rocket fired into Camp Crame, they say? Martial Law, here we come.

Thank you, Goldy Macam, Sid Jose, Martin Kanapa, Jimmy Canta, Gil Palomino, Regina Jamora, Junie Garces, Warlito de Ramos, Nice Jimenez, Lemuel Sanchez, Ermin Quito, Waldy Tagle.

OUR WORLD. Three skulls dug from under a medieval Georgian town are more than 1.7 million years old, researchers announced. The find may represent the first pre-humans to migrate out of Africa into Europe. More on this in cnn.com/nature.

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