P28-B loss seen in drug price control
THE Pharmaceutical and Healthcare Association of the Philippines (PHAP) called on the government to recall the policy on price control on medicines that could lead to foregone revenues of P28 billion.
In a statement, PHAP said the industry estimates a P57-billion drop in sales from P200 billion once price control is fully implemented.
Projected government revenue losses would be P4 billion in foregone customs duties; P7 billion in lost value-added tax; and P17 billion in corporate taxes, according to the association.
“The EO does not benefit the public in the end because of the formula used to compute the price adjustments. We appeal that the measure be withdrawn until further studies especially at this time when the government needs funds to fight COVID-19,” it said.
President Rodrigo R. Duterte in February issued Executive Order No. 104 or “Improving the access to healthcare through the regulation of prices in the retail of drugs and medicines,” which controls maximum retail price (MRP) and/or maximum wholesale price (MWP) of medicines of 133 drug formulas.
The EO, which will take effect in June, will slash prices of medicines from the manufacturer’s level but not all prices will be reduced at the patient level, according to PHAP.
The association also said that price control had not been effective “based on global experience.”
“It is a populist proposition but discourages production, creating scarcity that will likely hurt those in need of the medicines the most, and shrinks an industry. We continue to appeal for a thorough review on the impact of this policy,” the group said.
It urged the government to continue the practice of bulk buying and price negotiation “to assure both supply and price stability.”
According to the EO, price cap is applicable to drugs that address the health of the public, particularly those that account for leading causes of morbidity and mortality, have high price differentials to international prices, have limited competition in terms of lack of generic counterparts, and medicines where the innovator product is the “most expensive yet most prescribed and/or dispensed in the market.”
The MRP will be imposed on all retail outlets, including drugstores, hospitals, pharmacies, health maintenance organizations, convenience stores, and supermarkets, while MWP will be imposed on all manufacturers, wholesalers, and distributors.
“No public or private entity shall be allowed to sell, reimburse or demand from the public or patients payment in an amount higher than the MRP or MWP, as the case may be,” the EO read. — Vann Marlo M. Villegas
