SALES of generic medicine will outperform the overall pharmaceutical market’s growth as the country applies price controls on medicines, Fitch Solutions Country Risk and Industry Research said.
Price controls on 133 drug formulas took effect this month following an executive order signed by President Rodrigo R. Duterte in February.
Fitch Solutions said in a report on Friday that this poses a threat to multinational drugmakers and local distributors of medicines for cancer, diabetes and cardiovascular conditions, adding that pharmaceutical companies may withdraw existing products.
But the report said the market may benefit in the longer term as patients attracted to the lower-priced medicines could increase demand and attract more suppliers to the Philippine market.
“Over the longer term, with higher volume sales and greater competition in the market, these price controls could be positive for the market.”
Fitch Solutions said more focus on cost-containment measures could trigger more generic substitution.
“An increasing focus on cost-effective expenditure will further promote generic substitution rhetoric. As such, generic medicine sales growth will outperform overall market growth over the long term,” the report said.
The maximum retail prices were introduced to increase access to medicines, including those that address hypertension, cardiovascular disease, and cancer, with the Health department saying that current prices are inaccessible to poor Filipinos.
Trade Secretary Ramon M. Lopez in May said the pandemic warranted a review of drug price controls to study if adjustments can be made to address the pandemic.
The Pharmaceutical and Healthcare Association of the Philippines (PHAP) had opposed the executive order, saying the government stands to lose P28 billion in revenue from lost taxes.
The group had urged the government to explore other approaches including price negotiations and patient access programs. — Jenina P. Ibañez
