Cartels fight generics

EDITORIAL

Manila Times – February 14, 2007

In 2006 the Philippines had a P92-billion (US$1.8 billion) pharmaceutical market. In 2005 the size of the market was bigger—P100 billion.

But 8 out of 10 sick Filipinos died without having access to medicines that could have saved them or at least prolonged their lives.

Is this because more than 50 percent of our population—or more than 42 million Filipinos—are dirt poor, “experience hunger” and usually don’t know where their next meal is to come from? Not quite. The reason is the prices of drugs are so high. Perhaps we have the most expensive medicines on the planet, in terms of the price we have to pay compared with our per capita income.

Medicine prices are so high here because cartels rule our pharmaceutical market.

There is a cartel of drug sources—the international pharmaceutical corporations and their local subsidiaries and licensees.

There is also an almost- monopoly of drug-retail-marketing. One gigantic pharmacy chain has no real competitor to speak of. It accounts for about 60 percent of the country’s total drugstore sales and 50 percent of all pharmaceutical and medicine sales. Fortunately, this chain also carries generic drugs in obedience to the law.

The cartels’ price policy

The drug-sourcing and -manufacturing cartels have been pursuing what businessmen call a “price policy” to ensure their steady, unhindered growth and profitability.

They do not follow a “sales policy”—which would have made them seek to sell to more and more customers (even among the poor) and count their profits from ever-increasing value of products moved. Following this policy, they limit their market to the 10 percent or so of the population who can afford medicines no matter the cost. They raise the prices of their medicines every year and make huge profits just as or even more than before. Proof of this is that their sales volume and profits have been going up and up but the quantity of medicines sold has been declining.

So what happens to the poor or the fix-income folk who become ill? They have to take a deep breath and console themselves with the thought that there are at least 60 million fellow Filipinos like them who are in the same boat.

Only 8 million Filipinos can afford branded heart and blood-pressure maintenance pills for P44.75 each. How can a mere daily-wage earner buy his prescribed thrice-a-day capsule for his heart or diabetic condition, when each branded capsule costs more than a P100? And how about branded antibiotics (1 to be taken every 6 hours) that cost P60 a capsule?

Life-saving generics

There is a way for everyone sick to have access to these life-saving medicines. Give them the generic versions of the drug. A law exists to make generics available. And some generics are now being sold in drug stores.

For only P17.50 you can have the generic version of a popular, branded heart and blood-pressure drug that costs P44.75 a pill in most drug stores. The price difference is more than 200 percent. For some drugs the price difference between a branded and generic drug is much more than double.

Despite the existence of the generics-drug law and government efforts to make generics available, 96 percent of all drugs sold in the Philippines are still the expensive branded variety.

Generics sales would have been much less—if the government did not have the Botika ng Bayan and the Botika ng Barangay. More generics will be sold when the Philippine International Trading Corporation’s BNB Express project gains ground.

The drug-source cartels hate generics. They have mounted campaigns to make the public stay away from the cheaper version by funding broadcast and print ad campaigns warning people to be wary of generics that are fake and deadly. One such print ad even used the name of the Department of Trade and Industry as a co-signatory of the anti-generic ad.

The PITC—which is the agency taking the lead in testing and having the Bureau of Food and Drug examine generics and then importing and distributing these to individual outlets—ordered 40 samples of a generic drug from India for the purpose of examining it so that Filipinos could manufacture that drug when the patent eventually expires. The patent-owner pharmaceutical company sued the PITC.

India, like Pakistan, has a law that allows the manufacture as generics of past-patent drugs. A Swiss pharmaceutical company has petitioned the court for a review of the law. Its aim appears to be to weaken the law and make it more difficult to manufacture generics.

But some big pharmaceutical companies have cooperated with PITC—like Zuellig-Interphil and United Laboratory, which are manufacturing generic drugs.

We laud the PITC for its success in increasing the number of generic drugs now in the market. Thanks also to the PITC—and the President’s zealousness in following through her program of halving the cost of medicine so that the poor can afford them—there are now 1,283 Botika ng Bayan in the country. PITC also sources generics for the 7,389 Botika ng Barangay.

Before long PITC will have a network of BnB Express. These will widen the sale of generics—which are as good as the branded medicines that cost twice more.