CHEAP SHOTS
Medicine prices have become a new battleground at Congress as the Senate approved in January a "bill to lower prices" and the House moved to do the same
By Dong delos Reyes, Contributing Editor
There are excuses and excuses-some are limping, some in cast, some are lame outright they can hardly walk. But they can be trotted out.
Chew this sample: For decades, well-entrenched smugglers in cahoots with government powers-that-be have trotted out excuses to procure thousands of tons of rice from Pakistan, India, Vietnam, or Thailand in a bid to bolster so-called national food security and keep rice price at levels within reach of poor people. The scheme wreaks havoc on palay farm-gate prices while local palay producers hardly turn up decent returns for their produce, as local markets are awash with cheap imports.
The same get-rich-quick scheme appears to be similarly applicable to pharmaceuticals-the excuses trotted out have a familiar ring, to foster sharper competition that can rein price of the commodity within reach of the poor. In all probability, the road to perdition can be paved with the loftiest of intentions for the suffering poor.
In January, the Senate voting 20-0 approved on third and final reading Senate Bill 2263 which alters certain provisions of the Intellectual Property Code (IPC) to make medicines cheaper. Once signed into law, the proposal is envisioned to pave the way to an era in which Filipinos would be able to buy medicines at lesser costs similar to medicine prices in Thailand, India, Japan, and other countries.
The approved measure points to three major blockades to Filipinos' access to cheaper drugs:
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The pharmaceutical industry operating in the country has become an exclusive
warren of a handful of players that have established a stranglehold on the
local market-and in such an uncontested market whatever these players tab on
their products, the market has to bear the price burden.
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A mental rut of sorts afflicts behavior of consumers, doctors and public
health institutions-"consumers have yet to fully appreciate the value for
money offered by generic substitutes; doctors and public-health institutions
have to live up to their duty to inform their patients, particularly the
poor, about generic substitutes."
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IPC has built-in protectionist provisions that have been misused. Due to the highly technical and abstruse nature of the intellectual-property system, multinational pharmaceutical companies have dominated the application of the intellectual-property law to the detriment of public welfare.
The approved bill would amend Section 72.3 of the IPC, freeing generic manufacturers to start production and sale of a generic drug as soon as its patent expires. This change known internationally as the Bolar amendment has been entered into United States law. Canada, Argentina, Thailand, Malaysia, and Indonesia have reportedly adopted a similar principle.
Also, the measure amends Section 72.1 of the IPC to push for the Philippine entry under the so-called "international exhaustion regime." In such a regime, once a patent owner introduces the product anywhere in the world, anyone may buy and import such a product for resale in the local market sans risk of patent infringement. The amendment allows parallel importation of medicines so that any Tom, Dick, or Pedro can seek out overseas for better prices.
However, parallel importers-akin to rice smugglers proffering excuse to stabilize grain supply-have little or no incentive to maintain the goodwill of the product trademark and its ability to attract customers in the future. A parallel importer spends less time and effort to ensure the quality of the product and may provide little, if any, warranty or service.
In line with that amendment, the Senate measure also amends Section 47 of the IPC for an exception to the application of trademarks and trade-name restrictions when applied to such parallel imports.
Section 22.1 of the IPC would also be refurbished to disallow issuance of another patent for new uses of an existing substance that has already been patented. Such amendment patterned after the Indian Patent Act would enable generic companies to "aggressively market their own versions of the product without threats of lawsuits arising from newly discovered uses for patented products."
The legal tack beggars comparison. The Downstream Oil Industry Deregulation Law enacted in 1996 was outfitted with similar provisions allowing procurement of oil products overseas by enterprising traders, transport cooperative groups, or any firm out to cash in oodles or even corner the market via resale of cheap refined fuels. Despite such legal go-ahead, no such entity has ever attempted to buy oil products from Singapore refineries that are supposedly three to five times cheaper than those refined locally. And no outfit has cornered the domestic market with fuel products that are reportedly dirt-cheap elsewhere.
Meanwhile, the proposed statute-Senate Bill 2263 and its counterpart House Bill 6035-that seeks to hack at steep prices of medicines is up for review by a bicameral conference committee to iron out kinks and reconcile conflicting provisions. Once okayed, the measure will be sent to the plenary of both Senate and House of Representatives before it is sent to the President for her signature.
Despite the purported intention to give poor patients better access to medicines, the measure has drawn flak from local drug manufacturers, including the Pharmaceutical and Healthcare Association of the Philippines (PHAP).
Argued PHAP: "Price alone is not a consumer's only concern when buying a product. The consumer relies on the trademark to identify specific goods or services that will meet certain expectations about the quality and characteristics of the product and the level of after-sales services."
Also, drug patents need not be blamed for cost of drugs. A recent study reported in Health Affairs found that "in 65 low- and middle-income countries where four billion people live, patenting is rare for 319 products on the World Health Organization's Model List of Essential Medicines. Only 17 essential medicines are patentable, although usually not actually patented."
If such a large number of life-saving medicines is either off-patent-the exclusive claim has expired-or not patented, patents cannot be the problem in making medicines affordable and accessible to people, PHAP pointed out.
"In the Philippines, about 10 to 15 percent of drugs are patented while the remaining 85 percent are already off-patent. The Essential Drugs List of the Department of Health also attests to the fact that most, if not all, of the drugs considered as essential have generic equivalents-which means that these drugs are already off-patent," the pharmaceutical companies explained.
And that can be construed to mean that about 85 percent of essential drugs hereabouts can be bought at more pocket-friendly prices.
In effecting drastic changes on the intellectual-property system to haul down cost of medicines, lawmakers may be likened to eager beavers out to chop down an entire tree just to be able to lay their hands on a few fruits.
A lawmaker has warned in his interpellation on the House measure that the proposed law may mislead or may have actually misled Filipinos into believing that the bill will actually lower the prices of drugs. In fact, it may only affect a very minute portion of the drugs now in the market.
"A thorough discussion with various stakeholders in the pharmaceutical industry is called for before proposals are summarily passed that may be detrimental to public health and safety, and threaten the viability of the research and development-based pharmaceutical industry in the Philippines," PHAP stressed.
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