Victory

PINOY KASI

Victory
By Michael Tan
Inquirer

Last updated 02:54am (Mla time) 02/23/2007

MANILA, Philippines -- Congress’ special session has produced mixed results. On the dark side, the lawmakers rammed through an antiterrorism bill which threatens many of our civil liberties. On the bright side, the House of Representatives approved the Cheaper Medicine Act of 2007, which will now have to be reconciled with the Senate version passed earlier.

The bill faced strong opposition from the drug industry, all the way up to the last day of deliberation. Lobbyists from the Pharmaceutical and Health Care Association of the Philippines (PHAP) were asked to leave the plenary hall where Rep. Teodoro Locsin of Makati City and other legislators were deliberating on the bill. The lobbyists had slipped a note to Locsin asking him to question the quorum and to call PHAP’s chief executive officer, Leo Wassmer. Locsin and the legislators saw this as undue interference, as well as corporate arrogance. PHAP has responded by saying they were only appealing to Locsin as their representative (PHAP is based in Makati City).

But PHAP has not been known for its sense of good etiquette; on the contrary, it is notorious for bullying people. I still remember that when it was still the Drug Association of the Philippines, it threatened and cajoled officials of the Department of Health, including Dr. Alfredo Bengzon, when they tried to get the Generics Act passed. In recent months, it has fought with the DOH while trying to block new Implementing Rules and Regulations for the Breastfeeding Code.

Advocates will now have to keep a close watch as the bicameral committee puts together a final version of the Cheaper Medicines Act. Meanwhile, we should be educating ourselves on the new law’s two main provisions.

Provisions

First, they will allow the government to go into compulsory licensing of certain medicines when it is in the interest of public health. For example, if avian flu breaks out, the government may require the manufacturers of Tamiflu to allow other companies to begin producing it at lower cost, possibly under its generic name oseltamivir. Under the present system, the drug can only be produced by the patent holder, who can then dictate a high price.

This system of compulsory licensing is already being used in other countries. In January, the Thai government announced the compulsory licensing of two drugs: Kaletra for HIV/AIDS and Plavix for heart disease. Last November, the Thais also issued a compulsory license to import and produce generic versions of the anti-AIDS drug Efavirenz.

The Cheaper Medicines Act has a second important provision: It safeguards parallel imports. This means bringing in the same brand-name product from the same multinational company’s subsidiary in another country. Confused? The multinationals will charge different prices for the same product, depending on which country they’re in. Quite often, the Thai and Indian subsidiaries charge lower prices, for reasons I’m going to explain later. So, instead of buying from the local subsidiary of multinational X, they could go to its branch in India and bring in the same medicine at a lower cost.

The multinationals have tried to use the courts to block these parallel imports so legislation was intended to protect the government from further harassment. “Unfair!” the multinationals scream, but really, isn’t competition what capitalism is all about?

It is not a coincidence that India and, lately, Thailand are becoming sources of low-cost but good-quality medicines. The two countries wisely chose, many years ago, to forgo their accession to the international patent system because they felt it was unfair to developing countries. India was known for its system which recognized product patents but not process patents, meaning if a company found a way to manufacture the same medicine as a patent holder, but using a different process, it could go ahead and produce it. Through the years, India developed a national drug industry, mainly private companies, that put up stiff competition to the multinationals.

Thailand pursued a similar track, with both government and private drug companies turning out low-cost medicines. This forced multinationals to lower their drug prices. That is why the multinationals’ branded products are often cheaper than the same medicines sold here in the Philippines.

And the Philippines? Last time I checked, multinationals accounted for about 70 percent of drug sales in the country. The market is segmented, often with two or three multinationals cornering the sales for particular product lines, for example, contraceptives. The only serious local contender is the United Laboratories (Unilab) group of companies, which includes a number of subsidiaries such as Pediatrica, Medichem, Rite-Med. Together, these companies account for about 10 percent of total drug sales. Ironically, Unilab got its initial boost during the Marcos dictatorship as one of the crony companies. At one time, it had a 20-percent share of the market. But these days the Unilab group seems to be making up for its past “sins” by producing more affordable medicines.

Bluff

Let’s face it though: Many medicines, even those of Unilab, are still often unaffordable even for the middle class and for people who suffer from chronic ailments that require daily medication.

The problem now will be implementing the act. I am sure the multinationals will resort to the courts, as well as an intensive mass media campaign, to block the act. I can predict that they will talk about the dangers of “counterfeit medicine,” which is nonsense because parallel imports come from their own subsidiaries (unless they’re saying their own companies are producing fake medicines).

They’ll also threaten us, as they have before, about withdrawing from the Philippines. But they’ve gone through this bluff before and we have to realize they need us more than we do them. If they withdraw, there will be other sources for the medicines, often at much lower cost.

It’s time the multinationals learn to play by local rules. When Thailand announced its plans for compulsory licensing recently, the drug companies protested. But when it became clear that the Thai government was not about to budge, one company lowered the price of its medicine.

The Cheaper Medicines Act does not mean we’ve won the war for more affordable medicines. The government has to seriously think about stimulating the local drug industry so we need not be very dependent on the multinationals. It’s ridiculous that we now have two forms of medical tourism: on one hand, Westerners come to the Philippines to avail themselves of our cheaper medical services, yet Filipino tourists in Thailand or India now include drugstores in their shopping expeditions to get cheaper medicines.