Manila Times – May 8, 2007

By Tony Lopez

Roberto Pagdanganan is again running for governor of Bulacan. I am writing about him for what he did before that, as CEO of the state Philippine International Trading Corp. (PITC) from November 2004 until he filed his certificate of candidacy.

Obet was a longtime governor of Bulacan, from January 1988 to February 1998, making it one of the best-managed and business-oriented provinces and the country’s coops capital. He had come from a multinational company where selling was a religion. He has three degrees—chemical engineering (top-notcher), MBA and law.

President Arroyo told him to cut the prices of basic medicines by half by 2010, based on 2001 prices. The job was not a walk in the park.

“The Philippine drug industry is a cartel,” he winces now. “Mercury Drug was selling at 60 percent on drug retail and Zuellig Pharma 80 percent of wholesale. Zuellig had a sister company, Interphil which controlled 80 percent of manufacturing. The multinational companies controlled 70 percent of the drug market. And 23 percent of the remaining 30 percent was controlled by Unilab. The top 20 companies controlled 93 percent of the market.”

Until he came into the picture, the basic strategy of the government was to import medicines from India and sell them thru government hospitals and outlets. PITC sold only P500 million after five years. The drug market is worth at least P92 billion.

Obet adopted a three-point strategy—develop more outlets, develop more products, and intensify advocacy and information campaign.

The number of private Botika ng Bayan outlets increased to 1,300, all owned by private entrepreneurs franchised by the PITC. The government’s Botika sa Barangay increased to 8,000.

“We gave the barangays P25,000 to put up their Botika sa Barangay. We are thinking of making gas stations as drug outlets, on a 24-hour basis. We have organized the small drug stores into a consortium, called Pinoy Quality Med,” Pagdanganan says.

The number of medicines doubled from 50 to 100 of the basics. The PITC is organizing the small drug manufacturers to produce generics. The PITC itself puts up PITC Pharma to manufacture drugs.

Obet wants the law on intellectual property amended so more generics could be made locally.

A Senate bill seeks to clarify nonpatentable inventions, allowing the importation and early development of patented medicines, and modifying government use of provisions for drugs or medicines, to lower prices and increase access to and supply of quality drugs or medicines. It will amend the Intellectual Property Code of the Philippines (R.A. 8293).

The bill says there is no inventive step “if the invention results from the mere discovery of a new form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance, or, the mere discovery of any new use for a known substance or a known process unless such known process results in a new product that employs at least one new reactant.”

A US Supreme Court ruling last week basically revised the attitude towards patents. An invention must really be an invention, not a modification, to enjoy patent rights.

Meanwhile, launched in December 2004, Botika ng Bayan imports mainly from India and Pakistan but also carries local branded generic drugs. Most of the medicines being imported are for asthma, hypertension and diabetes.

Through the Botika project, a network of privately run—drug stores would be set up to provide products guaranteed by the Department of Health and the Bureau of Food and Drugs.

A percentage point is equivalent to P1 billion of the P100-billion local drugs market.

Obet had hoped the share of generics—both branded and “true”—would increase eventually to 50 percent by 2010.