Bill pits docs vs pharmacists

Time was when the medicine man and alchemist were rolled into one. It was practical in those days of yore: tools and tutors were hard to come by; the King needed but one Merlin to blame - and behead - for failing to cure his aching gout.

Today’s age of specialization, when each citizen and consumer is king, changed all that. There’s now the physician and the pharmacist. Yet they complement in the serious business of health. Physicians the world over are expected to diagnose, treat, operate or prescribe any remedy for human ill or ailment, injury or deformity. So says the Medical Act of 1959, or RA 2382. Pharmacists, on the other hand, are there to formulate and dispense the medication, and provide drug and health information. They have their own governing law, too, the Pharmacy Act or RA 5921.

Comes now Senate Bill 1900 that would roll the two specialists into one again – by pushing out the other. Proposed by Sen. Tessie Oreta to regulate physicians’ training and licensing, it would be the Physicians Act of 2002. But not if 36,000 registered pharmacists can help it. For they’re up in arms against a provision that redefines medical practice to "diagnose, treat, operate, or prescribe and dispense any remedy."

In lobbying for dispensing with "dispense," the pharmacists do not point to the obvious encroachment on their source of income. They instead raise the potential ill effects on patients and the government.

The bill contravenes the Constitution, the Philippine Pharmaceutical Association asserts in a position paper. Art. II, Sec. 15 requires the State to "protect and promote the right to health of the people and instill health consciousness among them." Art. XIII, Sec. 12 further states that "the State shall establish and maintain an effective drug regulatory system."

From these provisions stem at three laws:

• The Foods, Drugs and Cosmetics Act regulates the compounding and dispensing work of pharmacists. Under it, the Bureau of Food and Drugs requires them to get licenses to operate drugstores and hospital pharmacies. Doctors are not covered by it. Yet a good number of them mix their own drugs or freely sell to patients. SB 1900 would legalize the anomaly of unregulated drug sales.

• The Generic Drugs Act ensures the patient’s freedom to choose between branded or generic drug formulations of similar efficacy. The Consumer Code further protects the patient’s right to buy what is readily available and affordable. SB 1900 would take away the right and limit the patient’s choice to only what his doctor makes or sells. It could open to abuse the patient-physician trust relationship. Doctors might hide vital information on side effects and contraindications, if only to sell more. In a land where malpractice suits hardly prosper, patients would find no legal redress for overdose.

The pharmacists also point to two obvious violations of government policy and taxation. President Arroyo is in the thick of a campaign to bring down medicine costs. Price monitoring would be difficult if SB 1900 passes into law. The bill for drugs that doctors sell will be built into professional fees. That is, if they issue receipts at all. Government would lose more sales taxes from unregulated drug dispensing, in addition to income taxes it is losing from doctors who do not issue receipts.

A good number of doctors are themselves against the provision that would let them dispense remedies. They know their ethical responsibility. Times may be hard, and some doctors are taking up short nursing courses to land jobs as care givers. But that’s the route: if they must dispense drugs, they might as well take up pharmacy too.

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There’s a big mess in value-added tax monitoring. Insiders say the BIR is P35-billion short of collection target largely because of unplugged loopholes in VAT declarations. The cheating hits the government with a double whammy. An evader who underdeclares VAT by, say, P100 million in effect doubles it by availing of input credit of the same amount. Just ten tax cheats can thus set back the collection by P2 billion. And there are many of them out there.

With the projected yearlong budget deficit of P130 billion almost breached at P120 billion by mid-year alone, Malacañang is contemplating sanctions on the BIR. Budget Sec. Emilia Boncodin would not detail what the punishments are. But BIR chief Rene Bañez seems to be panicking - to the point of picking on the wrong guys.

The first "victim" is Honda Cars, which negotiated for eight long months with the BIR and Board of Investments for a permit to relaunch its CRV sports utility late April as a 10-seater and thus exempt from excise tax. With the exemption, Honda was able to cut its CRV unit price by almost P200,000, from P1,085,000 to P899,000. Buyers know a bargain when they see one. Orders for CRVs now take four months to fill.

Bañez took back the exemption, computing that government would lose P312 million in excise taxes from Honda’s usual sale of 1,200 CRVs per year. That may be so, Honda protested, but it would be able to sell at least 6,000 units because of the lower price. That would translate to P446 million in sales tax, or P134 million more in BIR take. Too, higher imports of parts and accessories to assemble more units would mean P82 million in Customs duties instead of the usual P27 million for CRVs, or another P55 million in government take.

There’s more. Lower-priced, faster-selling CRVs would mean P100 million in labor costs instead of only P20 million, and P438 million in local parts purchases instead of only P88 million. That’s a boost to the ailing car industry.

To top it all, with its business prospects buoyed by the earlier CRV respite from excise tax, Honda had decided to move its transmission plant in Japan to Manila by July for a P1-billion investment. Too, it had retooled its assembly line for another P64 million to meet the expected rise in orders in a five-year sales plan.

Honda’s protest got Bañez in a bind. To not appear as singling it out, he decided to hit all the other car makers as well with new tax guidelines on hot-selling Asian utility vehicles. Toyota, Mitsubishi, Nissan and Isuzu AUVs are exempt from excise taxes as they presently are configured. They won’t be for long under Bañez’s proposed rules. AUV prices will soon rise beyond the affordability tag of buyers who use them for small businesses like mega-taxis.

Consider: Ostensibly for passenger convenience and comfort, AUVs with floor shifts will henceforth be excise-taxed. Seats shall be 50 x 60 cms for drivers and 35 x 60 for passengers, measured on the narrowest portion of the back cushion.

No AUV at present will qualify for exemption under Banez’s new rules that Finance Sec. Jose Isidro Camacho will study this week. With less sales at higher prices, the car business will become slower than ever. That would mean less government revenues in the end, of course. Meanwhile, the VAT racket goes on uncorrected.

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Catch Linawin Natin, Mondays at 11:30 p.m., on IBC-13.

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