TRADE Secretary Ramon M. Lopez proposed a review of drug price controls to help the pharmaceutical industry better respond to coronavirus disease 2019 (COVID-19).

Mr. Lopez said at the online membership meeting of the Philippine Chamber of Commerce and Industry Tuesday that the industry should discuss with the government what adjustments can be made to help better address the pandemic.

Kailangan pag-usapan uli ‘yan kung makakatulong na ma-revise ulit ‘yung programa na ‘yan. (We need a new discussion on whether revising the policy will be helpful)”

“On the other hand, the industry is saying that we might not be able to enjoy the innovations (available),” particularly if price controls cover innovative products.

President Rodrigo R. Duterte in February issued Executive Order (EO) No. 104 setting maximum retail and wholesale prices on certain drugs. It will take effect in June.

The Pharmaceutical and Healthcare Association of the Philippines (PHAP) has said that the government stands to lose P28 billion in revenue from lost corporate tax, value-added tax, and customs duties. The industry group said its own sales will drop by P57 billion from P200 billion due to the price controls.

Mr. Lopez said in a mobile message to reporters that he will not yet comment on whether or not he supports the suspension or delay of the implementation of the order.

“I haven’t reviewed the impact of COVID-19 on the EO. I suggested that DoH (Department of Health) may need to review the pros and cons given different situations now under COVID.”

Executive Order 104 applies to drugs addressing the leading causes of mortality and drugs that have high price differences with those in the international market. It also applies to drugs that have limited competition in terms of generic counterparts or market access and drugs where the innovator product, the first drug containing the approved active ingredient, is the most expensive and most dispensed in the market.

The order applies to 133 drug formulas.

The pharmaceutical industry group has asked to withdraw the measure, “especially at this time when the government needs funds to fight COVID-19.”

PHAP President Beaver R. Tamesis said in a phone interview on Wednesday that price controls disincentivize international companies from entering the market, particularly if they produce drugs that address COVID-19.

He said that he is not certain if COVID-19 drugs are included in the current list of medicines subject to price controls.

He added that the policy environment created by the price control measures along with a lack of patent protection works against the Philippines.

“In an environment where there are price controls, where you cannot get your product registered (right away), what do you think will happen in terms of prioritization to get into the country? So it is a disincentive particularly when you have a crisis,” he said. — Jenina P. Ibañez