Pharmaceutical Goliaths

By Raul Pangalangan

Inquirer - February 23, 2007

MANILA, Philippines -- Medicines are sold at much higher prices in the Philippines than in other Third World countries -- that much I knew. But I was truly shocked when I finally saw the numbers.

According to government figures issued by the Philippine International Trading Corp. (PITC), Pfizer sells each Ponstan 500 mg tablet at P21 in the Philippines, compared with a mere P2.61 in India and P1.38 in Pakistan. Glaxo sells the asthma inhaler Ventolin 100 mcg at P315 to Filipinos, while Indians buy it at less than one-half that price, P123, and Pakistanis at less than one-fourth, P62. Indeed, rather more urgently, the diarrhea tablet Imodium is sold by Jansenn at P10 in Manila, while it sells at P3 in India and a mere P1.83 in Pakistan. (The figures may have slightly changed; I am relying on a May 2006 report by the PITC head, Roberto Pagdanganan. The peso has strengthened since then, and perhaps the pharmaceutical giants may have since acquired a conscience.)

Locally, the most controversial is the anti-hypertension drug Norvasc, manufactured by Pfizer, and properly so. It is, I understand, a maintenance drug that patients take over the long-term and not just episodically, and in a country where heart ailments are the leading cause of death.

In the Philippines, Norvasc is sold at P45 per 5 mg tablet and P75 per 10 mg tablet. Contrast that to the prices in India (P5 and P9, respectively) and Thailand (P26.65 and P45.65, respectively). At best, the Manila prices are twice what they are in neighboring Bangkok. In the Philippines alone, Pfizer generates approximately P1.2 billion ($60 million) in sales yearly on Norvasc.

That should be reason enough, don’t you think, for their lobbyists to pass a note to a congressman, saying “We desperately need someone to question the quorum now. Can you do it?”

I am not dismayed at the brazen lobbying and parliamentary maneuvering; that is par for the course, whatever the cause, whatever the banner, you carry. It is the unjustness of the cause that I question, the spotted banner that I decry.

First off, what is at issue is not solely a private claim of title to property, that is to say, the pharmaceuticals’ claim over their patents. Rather the issue is to what extent the Philippine legal system will protect those rights, given the countervailing needs of millions of Filipinos.

The pharmaceutical companies claim that drugs are expensive because they need to recover their investments in research and development. Indeed, this is the only moral ground by which they can claim protection for their patents. In 2001, the drug companies placed this at $802 million for each new drug they bring to the market. Yet the Pharmaceutical Research and Manufacturers of America (PhRMA) has placed the cost at $100 million after taxes, a fraction of the claimed amount. (The balance of $702 million, I suspect, goes to the med reps and the fancy doctors’ conventions!) Even given those built-in costs, the logic of the market says that if their R&D costs can bear their India pricing at P5 per 5 mg tablet, how can they price it at 9 times more in the Philippines?

Moreover, new legal approaches to property law teach us that property is not the “thing” itself, but rather the “bundle of rights” protected by law, that is to say, the rights that we as a nation decide to shelter under our communal protection, e.g., the right to possess, to use, to exclude others, to sell, or even to destroy.

The Senate and House bills will give Filipinos better access to affordable medicines by allowing Filipinos to purchase cheaper but patented versions of the same drugs from, say, India. The Indian and Philippine patents remain unimpaired. The bills deal only with the right to sell. Right now, the pharmaceuticals claim an exclusive right to sell their products in the Philippines, and at bloated prices.

What the bills propose is to allow “parallel importation” so that if Pfizer sells it nine times cheaper in India, we can buy it from India and re-sell it locally. That way, the pharmaceuticals continue to sell at whatever price they desire, in New Delhi and in Manila, except that if they themselves sell cheaply in Delhi and dearly in Manila, Filipinos should be free to shop for a better bargain.

Indeed, look at the “bundle of rights” notion the other way: Isn’t it foolish to use Philippine law to stop Filipinos from buying the same patented drug at lower prices elsewhere?

The reform bills before the Senate and the House are the indispensable first step in promoting the human right to health. The Philippine pharmaceutical market is placed at P100 billion per year, with Metro Manila alone accounting for a whopping 46 percent. Government estimates show that we have probably the highest drug prices in the world in relation to per capita income (in normal-people-speak, we pay more of our little income than richer folk).

The next steps, however, will have to be taken by the mass of Filipinos themselves, patients and doctors alike, who have to wean themselves away from brand names. We have had a Generics Law since the late 1980s, and yet generics account for a mere 3 percent of drugs in the Philippines, compared to over 50 percent in the United States. Filipinos go for branded drugs 97 percent of the time, and 70 percent of all purchases are with transnationals.

Without meaning to take the wind out of the sails of anti-pharmaceutical Davids, I write this as a true believer in traditional medicine, who swears by "pito-pito" tea, who brought his kids to "hilot" [traditional physical therapists] when they had "pilay" [injury], and who sent his driver to find therapeutic leaves in some Quezon City swamps.