High out-of-pocket expenses for medicines remain a major barrier to healthcare access, particularly in low- and middle-income countries (LMICs), and often lead to financial hardship. Out-of-pocket health spending refers to direct, non-reimbursable payments made by individuals at the point of care covering medicines, consultations, and hospital services that are not fully covered by insurance.
In many LMICs, 50% to 90% of medicine costs are paid out-of-pocket due to gaps in financial protection. In the Philippines, households shouldered 44.4% of total health spending in 2023, with medicines accounting for roughly 46% of out-of-pocket expenditures. These figures underscore a persistent structural challenge: access to treatment remains closely tied to a patient’s ability to pay.
For individuals living with non-communicable diseases (NCDs) such as cancer and diabetes, this burden is particularly acute. Managing chronic conditions often requires long-term and continuous treatment, making affordability a decisive factor in health outcomes. This reality reinforces the need for sustained investment in primary healthcare as a cornerstone of financial protection.
Primary healthcare plays a critical role in reducing overall health expenditures. By providing accessible, preventive, and cost-effective services at the community level, it minimizes the need for expensive hospitalizations and specialized care. Early detection, timely intervention, and coordinated management of chronic diseases not only improve patient outcomes but also generate significant savings for both households and the health system.
The Philippine government has taken important steps to improve affordability. The Tax Reform for Acceleration and Inclusion (TRAIN) Law and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act have exempted selected medicines, including those for cancer, hypertension, diabetes, mental health conditions, high cholesterol, kidney disease, and tuberculosis, from the 12% value-added tax (VAT). These measures provide immediate price relief for patients and represent a practical approach to easing financial barriers.
The Universal Health Care (UHC) Act further strengthens financial protection by institutionalizing access to essential health services, including medicines. Automatic enrollment in PhilHealth ensures that all Filipinos are eligible for benefit packages that reduce out-of-pocket costs.
A key development under UHC is the rollout of expanded outpatient benefit packages. In July 2025, PhilHealth launched the Yaman ng Kalusugan Program para Malayo sa Sakit (YAKAP), which consolidates primary care services into a more comprehensive and prevention-focused package. By emphasizing early detection and routine care, YAKAP aims to reduce reliance on hospital-based treatment.
Under the program, members can access preventive consultations, laboratory services, essential medicines, and selected cancer screenings through accredited primary care providers nationwide. By bringing services closer to communities, YAKAP helps bridge long-standing gaps in access while reducing the financial burden on patients.
At the same time, strengthening the Health Technology Assessment (HTA) process is critical to ensuring timely access to innovative medicines. The HTA Council plays a vital role in evaluating the value of health technologies and informing inclusion in the Philippine National Formulary (PNF), which enables government procurement. However, delays in HTA processes and limitations in local data can slow access to new, life-saving treatments.
Addressing these challenges requires a more agile and responsive system. Streamlining HTA processes, enhancing data availability, and exploring complementary procurement pathways, including mechanisms that allow access to medicines outside the PNF, can help ensure that patients benefit from medical innovation without unnecessary delay.
Equally important is the need to strengthen procurement systems. Fragmented and short-term purchasing practices often result in higher costs and inconsistent supply. In contrast, consolidated and strategic procurement enables the government to leverage economies of scale, secure better pricing, and ensure a more stable supply of medicines and vaccines. Investing in efficient procurement is not only fiscally prudent as it is essential to safeguarding public health.
The biopharmaceutical industry remains a committed partner in expanding access. Through global collaborations, capacity-building initiatives, and patient access programs, the industry supports health system strengthening in LMICs. Since 2000, substantial quantities of medicines have been donated to support underserved populations, reflecting a shared commitment to equitable healthcare.
Reducing out-of-pocket expenses for medicines lies at the very heart of public health and economic resilience. No individual should be forced to choose between life-saving treatment and basic necessities such as food or shelter. Achieving this goal requires sustained collaboration among government, the private sector, and the broader healthcare community to build a system where access to medicines is not determined by income, but guaranteed as a fundamental right.
Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines, which represents the biopharmaceutical medicines and vaccines industry in the country. Its members are at the forefront of developing, investing and delivering innovative medicines, vaccines, and diagnostics for Filipinos to live healthier and more productive lives.
