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 Health is Wealth
 
Philippines: One year after drug price control
Manila Times, Philippines Thursday, August 19, 2010


On August 15th 2010 the drug price control or price regulation policy will turn exactly 1-year-old. The policy has not achieved its goal of making essential, popular and branded drugs become more accessible to the poor. Price control was not a success in making more popular, previously expensive drugs by multinational pharma companies become more affordable to the poor, writes BIENVENIDO OPLAS JR. in the Manila Times.

The drug price control or price regulation policy will turn exactly 1-year-old on August 15, 2010. A year after its implementation began, has the policy achieved its goal of making essential, popular and branded drugs become more accessible to the poor?

...

MedExpress’ sales data for the price-controlled drugs showed the following: From August to December 2009 vs. same months in 2008, sales volume fell by 3.4 percent and sales value tumbled 34.3 percent.From January to May 2010 vs. same months in 2009,sales volume has managed a 7.3-percent increase but the value plummeted by 65.4 percent, whacking the retailers’ margins.

The sales value decline is now bigger than the mandatory 50-percent price reduction because there are additional government-imposed discounts, such as the mandatory 20-percent off for senior citizens and people with disabilities (PWDs).

...

What are the implications of these numbers?

At first glance, one may conclude that price control was a success in making more popular, previously expensive drugs by multinational pharma companies become more affordable to the poor. Wrong.

...

This result is a clear setback to the government’s 22-years old campaign to promote generics through the Generics Law of 1988.

Did the government, the DOH officials in particular, foresee this huge and glaring contradiction between its old policy of generics promotion and its new branded drugs promotion?

What about the poorer consumers and patients, those who are in the rural areas and do not frequent the malls, did they also join the bandwagon shift to the branded drugs?

... ...

Meanwhile, a number of small and independent drugstores, those which do not belong to any drugstore chains, have been forced to drastically shrink their operating costs including laying off some staff. Some also have had to stop selling some of the price-controlled drugs altogether as they encountered problems in getting rebates from the manufacturers, and they could no longer make useful profits. The situation of “cheap but not available” drugs in some rural areas has become more pronounced.

...

It is time to move on, abandon politicized pricing of certain drugs, and focus our energy on the bigger issue of healthcare coverage for many Filipinos.

This article was published in the Manila Times on Thursday, August 19, 2010. Please read the original article here.
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